Union Finance Minister Arun Jaitley on Monday rose to the occasion to meet the raising expectation from industry leaders and the aam aadmi as he presented his third general budget. Corporate tax was slashed by five per cent and service tax remained unchanged.
Jaitley once again relaxed the FDI policy in several sectors, including insurance and pension and asset reconstruction companies, to attract more overseas investments.
He also adhered to the fiscal consolidation roadmap by proposing to keep the deficit at 3.5 per cent of GDP in 2016-17.
BUDGET 2016 REACTIONS:
Arvind Kejriwal: The budget has nothing for farmers in distress who are are committing suicides. Farmers are reeling under huge debt. Loans of industrialists have been waived but not that of farmers. Nothing for middle class in this budget. Modi govt cheated middle class which votes for them.
Dinesh Trivedi, TMC: Its not a budget which will boost growth, neither one which will have ease of doing business
Virbhadra Singh: Few points in Budget 2016 are good like more money allocated under MNREGA, Swach Bharat and roads. Except that I think it’s a very simple budget. Had expected revolutionary budget
Nitish Kumar: They have been talking about development of agriculture, farmers but nothing concrete seen in Budget 2016
Mallikarjun Kharge Leader of Opposition LS: There is nothing in this budget for anybody other than corporates close to them
Shatrughan Sinha: Am not a budget expert, but do agree its a good budget. Haven’t seen a focus on education, defense so far
D Raja, CPI: Outside budget they promised a lot to corporate sector. Not evident now. Nothing spectacular in budget
Kamal Nath, Congress: Unfortunately, what needed to be done has not been done
Shashi Tharoor, Congress: Govt has painted a very general picture, have adopted many old policies of UPA
Manish Tewari, Congress: FM presented a piece of rhetoric which will contribute to shrinking of economy
Harshavardhan Neotia, President, FICCI said “Overall the budget proposals are in line with the development priorities of the nation. The Finance Minister has made a strong attempt to pump prime the rural economy and the infrastructure sector. This would yield dividends and we foresee a multiplier effect in the form of demand generation and employment creation over time. The state of the agriculture sector on account of two consecutive years of monsoon failure was precarious and it deserved the attention that was needed”.
“Additionally, we see a lot of emphasis on affordable housing segment which will also result in forward and backward linkages and thus propel growth. Sticking to the fiscal framework is another major plus and should offer comfort to the international community. Attempts towards tax simplification and improving the tax litigation framework are also noteworthy”, added Mr. Neotia.
Radhika Rao, Economist, DBS, Singapore
“It is encouraging to see that fiscal discipline has been given priority at today’s budget, though we await the fine-print. Budgetary assumptions, especially nominal GDP growth will be key. Implementation of the pay commission proposals is also unclear in the speech, so more details are also sought here. Focus on rural/ social sector spending and roads/ highways are along expected lines and positive. But less-than-expected support for banks’ recapitalisation has disappointed. Services tax was left unchanged and long-term capital gains tax fears were left misplaced.”
Ashtosh Raina, Head-FX, HDFC BANK, Mumbai
“Really excellent budget. The adherence to fiscal discipline, with emphasis on growth and development, increasing infrastructure spending… are key elements of this year’s budget.”
Kamlesh Rao, CEO, Kotak Securities
“Union Budget 2016 has struck a fine balance between fiscal prudence and providing growth boosters to the economy. The Budget is leaning more towards rural consumption, which in light of consecutive bad monsoons steps will bolster the India consumption story which is reliant on rural consumption. As expected, the Budget has laid emphasis on infrastructure especially roads, it is also about higher taxation for the elite class and effective utilization of the same proceeds towards the growth and development story of India.
Sanjaya Gupta, MD, PNB Housing Finance Limited
“The FM presented a very finely balanced budget. So far, as the housing sector is concerned, the Union Budget for the FY 16-17 is in line with Prime Minister’s vision of ‘Housing for all’ by 2022. Tax reforms made by the government are indicative of centre’s seriousness towards giving a much required fillip to the housing sector. The industry has been expecting initiatives that can directly translate into benefits for the end consumer, thus increasing the velocity of transaction and improving the market sentiment. The additional tax exemption of Rs 50,000 for the first time home buyers is certainly a welcome move. With this we expect a spur in sales and far greater traction of growth in the affordable housing segment.”
Milind Kothari, Managing Partner And Head – Direct Tax, Bdo India, Mumbai By Email
“The allocation for bank capitalisation of 25,000 crore rupees (250 billion rupees) is only a patch on the 1,80,000 crores that the Economic Survey has identified as the need of this vital sector. The banking sector has a major role to play in spurring private investment which is lacking and without which the all-round economic revival is not a possibility.”
Yoginder K Alagh, Farm Expert and Former Member Planning Commission
“These steps will help our millions of farmers recover from the rough patch they have been going through but the government will have to raise its allocation for the crop insurance scheme, as the gap between farmers’ cost on farming and their loss, if any, is huge.
“Although I welcome higher allocation for irrigation, we need to see its implementation. The government has been raising its irrigation spending every year, but we’ve failed to bring any extra area under irrigation facility. How does higher allocation help then?”
R.C. Bhargava, Chairman, Maruti Suzuki, New Delhi
“The vehicle manufacturers are being directed to get to Euro 6 by 2020 and vehicles contribute so little to pollution. Main pollutant in Delhi for example is PM 2.5, which is dust. Cars only contribute 2 percent to that according to IIT Kanpur study. So why only cars are being targeted for pollution, especially when they are being pushed to incur the higher cost for Euro 6 is something which is difficult to understand and accept as being fair and reasonable.”
Vrinda Mathur, Partner, Grant Thornton India Llp, Noida
“The comments on (health) insurance are quite welcome. While the spending on healthcare has gone up, we’ll have to wait and see how many of the initiatives announced actually see the light of the day … that’s a question mark right now.”
Deepak Mehrotra, Managing Director, Pearson India
The Government has presented a well-balanced budget with right emphasis on the rural economy, education, agriculture, infrastructure and social security among others. We welcome the budgetary allocation towards development of multi-skill development centres in the Union budget that reinforces government’s commitment to Skill India mission. The focus on skill training among Indian youth has further been strengthened with the plan to skill one crore youth in the next three years under the PM Kaushal Vikas Yojana. The budget rightly focuses on ensuring the digital literacy in rural India through the National digital literacy mission that aims to cover six crore rural households in the next three years.
Mr. Manish Sharma, President CEAMA and Managing Director Panasonic India and South Asia.
“The Indian economy is growing at a rapid pace despite the global slowdown. The Finance Minister has clearly highlighted the growth pillars of the Indian economy in Agriculture, Rural, Social sector, Skills, Ease of Doing Business and Tax and Compliance reforms. We are happy with the government impetus on Make In India by providing tax and duty benefits and these will go a long way in strengthening the manufacturing capabilities of India. Another important milestone has been the use of technology to increase accountability of the government, authorities, and courts is a welcome step and will provide the right fillip to fast track procedures and will become the growth engine of the country. Skilling of youth of India by way of multi-skilled training institute and MOOCS will go a long way in tying the India growth story with the demographic advantage of India. Like always, we will continue supporting the government in its endeavour to fast track growth.”
Rajeev Dimri, Leader, Indirect Tax, BMR & Associates LLP
Budget announcements seem well directed with focus on rural economy, infrastructure spending, social welfare schemes and ‘digital’ initiatives. Rationalization of indirect tax and duty structures for various sectors such as IT hardware, defence, mineral and petrochemical, aviation to name a few, with a view to encouraging Make in India initiative is a welcome move. Overall, coverage of various sectors of the economy was comprehensive with focus on keeping the Government spending within acceptable limits of fiscal prudence.
Mr. Manish Godha, Chief Executive Officer, Advaiya.
“The initial reaction would be that of a slight disappointment—a prudent budget and would have an impact in quite a few areas, but I believe overall impact would be limited. There were quite a few good ideas, but then in many areas it looked to be more of a tinkering with the status-quo. The focus on rural economy is important, especially in light of global economic situation, as unleashing rural economy has the potential of adding consumption and growth in a significant way. Infrastructure spending—roads and railways—should have some positive impact on overall economy and sentiment. Though there seems to be a reliance on off-budget resources, contribution by state governments, etc., this might mean that execution lags or fiscal targets are compromised. The tax proposals would not make much of a difference to businesses in general, but there were signs that the fine print could spring nasty surprises.” said Mr. Manish Godha, Chief Executive Officer, Advaiya.
PwC India on Auto sector by Abdul Majeed – Partner Price Waterhouse
“There are slew of measures in the budget to kick start the investment activity in the economy, creation of demand in the rural economy and capitalisation of nationalised banks should help in easing liquidity. Budget also has few incentives to put more money in the hands of small tax payers. Increased investments in the infrastructure, incentive to promote environment-friendly vehicles (EFV) and investment in the rural economy should help few segments of automotive industry such as tractors, two-wheelers and EFV. However increase in tax on luxury vehicles, increase in infrastructure cess from 1 to 4% will have negative impact on passenger vehicles.”
Dr Shivendra Bajaj, Executive Director, Association of Biotechnology Led Enterprises, Agriculture Group
“The Finance Minister’s focus on agriculture in the Budget 2016-17 was keenly awaited and will enhance expenditure on the rural and agriculture sectors. Although the soil health card scheme, Fasal Bima Yojana and common e-market platform will help in improving the agriculture sector in the country. However it is disappointing to see no encouragement for agri-biotech research by public or private institutions for augmenting the agriculture sector. We further believe that for transforming the Indian agriculture, counter the ill-effects of climate change, improve livelihoods and address food requirements of the nation technological intervention is of utmost importance.”
Vikash Kumar Sharda, Director- Capital Projects & Infrastructure (CP&I), PwC India on ROADS
Enhanced allocation in road and highways sector by around 22% is definitely a positive for this sector. However, role of private sector investment would be key to achieve the target of 10,000 km of National Highways construction during FY 2016-17. Therefore, two initiatives such as Public Dispute Resolution Body and Guidelines for renegotiation of PPP contract are important to provide necessary impetus to the PPP model of procurement in roads and highways sector which has suffered due to disputes and litigations.
India shows its commitment to reduce carbon footprint; budget doubles Cess in coal
— soma banerjee (@somaet) February 29, 2016
The big idea of budget is the definition of Middle class. Now, we have much clearer definitions of middle class, upper class & super rich.
— Shyam Sekhar (@shyamsek) February 29, 2016
Dear Govt, If this is your budget proposal, stop calling anyone else a leftist..
— Rakesh Vajpai (@rakeshvajpai) February 29, 2016
As predicted Markets Unhappy. That implies a very very good Budget!
— MRV (@MRVChennai) February 29, 2016
Budget is only for the English Speaking and understanding Indians. #UnionBudget2016
— T. A. G. (@TusharG) February 29, 2016
— Rahul Pandey (@Rahul_Pandey_1) February 29, 2016
#Budget2016 turning out to be a budget for jobs, rural development, and structural transformation – prudence and ambition well balanced.
— Manoj Ladwa (@manojladwa) February 29, 2016
— seemi pasha (@seemi_pasha) February 29, 2016
‘9’ is the lucky number in Budget 2017-18 speech! Nine pillars, nine aims for tax reform #Budget2016
— Aanchal Magazine (@AanchalMagazine) February 29, 2016
— Anil Padmanabhan (@capitalcalculus) February 29, 2016
Markets react negatively to lower than expected bank recapitalisation fund at Rs 25000 cr. All bank stocks in red #Budget2016
— Maneesh Chhibber (@maneeshchhibber) February 29, 2016
So far, markets not too enthused with #Budget2016 . Sensex down 120 points, Nfty below 7000
— Maneesh Chhibber (@maneeshchhibber) February 29, 2016
#budget2016 Jaitley’s budget is growth, investment and jobs oriented. The sting may come on his fiscal targets unless revenue overestimated
— R Jagannathan (@TheJaggi) February 29, 2016
Is this biggest reform of #Budget2016? Hard copies of Budget not to be distributed as part of Green Effort. Inconvenience Regretted: Govt
— Maneesh Chhibber (@maneeshchhibber) February 29, 2016
Seems a budget without a big theme… my 2 bit ….
— arun giri (@arungiri) February 29, 2016
This does not look like a budget for the markets. Yet. #Budget2016
— Madhavan Narayanan (@madversity) February 29, 2016
Rs 1 lakh countrywide health cover n 2000 medicine shops to control medicine prices – good step in budget
— Satish K Singh (@SatkSingh) February 29, 2016
Sensex down some 30 points after some 30 minutes into Budget speech #ExpressBudget
— P Vaidyanathan Iyer (@iyervaidy) February 29, 2016
This the most political budget speech in yrs yet. Tone echoes a hard Agro-povertarian swing. The govt seems losing nerve early #Budget2016
— Shekhar Gupta (@ShekharGupta) February 29, 2016
@ShekharGupta I call it India’s first Agriculture Budget (long overdue) though nine sutras should have enough fodder for non agri economy
— Rakesh Khar (@rakeshkhar) February 29, 2016
Shouldn’t the budget speech have a report of achievements vis-a-vis plans n allocations made in earlier years? Like Nirbhaya fund?
— Anirban Dasgupta (@Anirban1202) February 29, 2016
We shift to the other red carpet:the one leading to parliament&the budget.We’re looking for an Oscar for the best production, not acting..
— anand mahindra (@anandmahindra) February 29, 2016