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Budget 2020 Reactions Highlights: Budget has ‘vision and action’, says PM Modi

Union Budget 2020 Reactions Highlights: Facing the challenge of reversing India's sharp economic slowdown, Finance Minister Nirmala Sitharaman presented her second Union Budget on Saturday and we bring to you all the reactions surrounding the budget from politicians to experts to common masses.

By: Express Web Desk | New Delhi |
Updated: February 2, 2020 11:04:49 am
Budget 2020 Reactions LIVE Updates: Here's how politicians and analysts reacted to the Budget Union Budget 2020 India Reactions Highlights: Here’s how politicians and analysts reacted to the Budget

Union Budget 2020 India Reactions Highlights: As Finance Minister Nirmala Sitharaman began presenting the Union Budget 2020 Saturday, reactions from several quarters started pouring in. Congress leader Rahul Gandhi took a jab at Nirmala Sitharaman over the duration of the budget speech and said it was probably “the longest but it was hollow”. Meanwhile, CPI(M) chief Sitaram Yechury describing the budget as ‘just platitudes and slogans’, shared a cartoon of the Jamia shooting on Twitter. Meanwhile, Defence Minister Rajnath Singh hailed Budget and said, strategic allocations have been made in this Budget, welcoming policy intervention in new tech economy.

Facing the challenge of reversing India’s sharp economic slowdown, Finance Minister Nirmala Sitharaman presented her second Union Budget on Saturday. As it happened, we bring to you all the reactions surrounding the budget from politicians to experts to common masses. On Friday, the Economic Survey pegged economic growth at 6-6.5% in the fiscal year, starting April 1.

Follow Union Budget 2020 LIVE UPDATES

India Inc.’s reactions last year to Sitharaman’s maiden budget was a mixed bag as they said no incremental changes were made since Interim budget. However, the Finance Minister needs to ensure relief to ailing sectors this fiscal year, analysts believe.

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Here’s how political and financial analysts and economists reacted to the Union Budget announcements. Follow this space for latest updates:

11:04 (IST)02 Feb 2020
'Sub-urban rail will boost multi-modal connectivity'


Ola Mobility Institute: The budget’s focus on the development of transportation infrastructure, specifically on urban transportation through allocation of funds for metro-rail projects will help achieve Ease of Living through Ease of Moving. The transportation infrastructure development should also focus on accessibility to all including senior citizens and persons with disabilities. Sub-urban rail will boost multi-modal connectivity and open up new economic opportunities for areas in and around cities like Bengaluru.

The clean-air fund of Rs 4,400 crores to be provided in the form of incentives to be notified by MoEFCC should consider measures to link the incentives to the electrification of vehicles and associated infrastructure such as battery-swapping and charging.

The government’s recognition of the role of New Economy in the form of aggregator platforms and sharing economy is a significant step towards encouraging innovation and entrepreneurship. The universal pension coverage with auto-enrolment realises the long-felt need of mobile social security for workers will boost the platform economy.

11:03 (IST)02 Feb 2020
'Taxation related to ESOPs and removal of DDT are significant moves'

 Mitesh Shah, Head - Finance, BookMyShow said “At the onset, we would like to laud the Government for a growth-driven budget. We welcome the progressive policies aimed at encouraging rural demand, changes in personal taxes to spur consumption, impetus to infrastructure development, measures aimed at bolstering growth and reversing slowdown. Additionally, taxation related to ESOPs as a perquisite and removal of DDT are significant moves. However, it would have been beneficial to have the benefits of taxation relief on ESOPs expanded to companies and industries at various stage of growth and not be limited to startups alone.

 

Compliance on e-commerce has been increased by mandating them to deduct a TDS of 1% on all goods and services sold on e-commerce platforms. This would be in addition to TCS under GST and this amendment might further increase the cost of compliance for e-commerce companies. The government’s vision to build data centre parks, allocation towards quantum computing and its focus on using artificial intelligence in statistical and other government departments will take India’s growth story to the next level and help further the 'Digital India dream."

20:44 (IST)01 Feb 2020
'Utterly disappointed': KTR slams Union Budget

TRS party leader K T Rama Rao slammed the Union Budget and said reducing the state's share in central taxes will impact the implementation of various developmental projects. "Utterly disappointed with the #UnionBudget2020 While economic survey showcases Telangana as a performer & a progressive state, Reducing Telangana’s share in Central taxes is bound to impact the implementation of various development & welfare initiatives of the state government. The fact that the States' share in Central taxes has gone down by an unprecedented 18.9% in FY 2019-20 proves how poorly the Union Govt is managing the economic affairs of the country. This is going to severely impact Telangana state’s planning. Though NITI Ayog had recommended Union government to extend financial assistance of Rs 24,000 Crores to Telangana’s flagship initiatives #MissionKakatiya and #MissionBhagiratha, unfortunately Union Govt did not allocate even a single rupee in #UnionBudget2020," he tweeted.

19:47 (IST)01 Feb 2020
Karnataka CM Yediyurappa calls Union budget ‘pro-farmer’, Cong calls it ‘anti-people’

Karnataka Chief Minister B S Yediyurappa Saturday described the Union budget presented by Finance Minister Nirmala Sitharaman as pro-people, pro-farmer and pro-poor. “For the first time in the history of the country, priority has been given to farmers, poor and rural areas. This is a boon to the farmers. The programmes announced for the farming sector compliment the Prime Minister’s vision to double the income of farmers,” Yediyurappa said in a statement. Read more here

19:44 (IST)01 Feb 2020
Here are some more reactions of India Inc. leaders

Indroneel Dutt, CFO, Cleartrip: The government has backed its vision to turn India into one of the world’s top tourism hubs by allocating INR 2,500 crore for promoting tourism in general and setting aside a sum of INR 3100 crore for the Culture Ministry to boost regional tourism. What would be wonderful is to have an empowered nodal body comprising of the Govt / OTA / airline, hotel and other industry representatives with the objective of promoting discoverability, ease of booking and fulfilment of our cultural, natural and heritage sites.

Sunil Gupta, MD & CEO, Avis India: The Union budget takes a calibrated approach to boost the country’s growth by investing in new infrastructure and ensuring clean air and environment for the people. Avis is a strong believer in making available transportation and infrastructure of the future, to build an environment-friendly economy. The allocation of Rs 1.7 lakh crore for transport infrastructure and the announcement of setting up 100 new airports under UDAN, is a big booster for travel and tourism in the country. At the same time, allotment of Rs 4,400 crore for clean air policies is a step in the pursuit of sustainable development. The scheme to boost electronic manufacturing in the country will also support the electric vehicle ecosystem in the country. Setting up of on-site museums at five archaeological sites will help promote tourism and on road-transport in the country. The vision of the current government is to promote the domestic industry, tourism, and entrepreneurs, and the budget lays down its foundation through focused policies in the same direction.

Anurag Avula, Co-founder & CEO, Shopmatic: At Shopmatic, we are happy that aspiring entrepreneurs and small businesses will benefit from the many initiatives that the finance minister has announced in today’s union budget.We believe that the announcement caters to the rising aspirations of India and is aimed at giving the startup economy a boost!. Setting up an Investment clearance cell to offer end-to-end facilitation and support to start-ups, will give a strong lift to the country’s aspiring entrepreneurs. Start-ups have more than one reason to celebrate, as entrepreneurial ventures with turnover up to 100Cr, as opposed to the previous threshold of 25Cr, can now avail 100% profit deduction in 3 out of 10 years instead of the previous limit of 7 years. This will surely allow entrepreneurs to take more risks and innovate while pursuing their aspirations. Deferring ESOP taxation in the hands of employees is another welcomed move, offering them a window of 5 years or whenever they exit the organisation, whichever is earlier. This will continue to help more startups hire the best candidates and retain them, for longer periods of time.

Jasmeet Thind, Co-founder, Coutloot: With technologies like AI, IoT and Data Analytics transforming the world, and cutting across streams, the Union Budget 2020 has introduced some ample changes that will certainly benefit the start-up community. The finance minister announcing that entrepreneurs from rural areas will be offered additional opportunities to learn and develop their skill sets is definitely a moment to rejoice. Stressing on digital connectivity throughout the country the INR 6000 crore allocated for the same under the BharatNet program, we are happy that aspiring entrepreneurs and small businesses from suburban and rural areas will be able to scale their business outside of their towns. We will continue to offer our support to enable them to achieve their goal and own successful businesses.

19:21 (IST)01 Feb 2020
Tripura CM congratulates Finance Minister on Union Budget

Tripura Chief Minister Biplab Deb congratulated Finance Minister Nimala Sitharaman on the Union Budget and said the budget proposal has stress on agriculture, rural development, health and education sectors. “I congratulate @FinMinIndia Smt. @nsitharaman ji for presenting the pro-people #Budget2020 which will fulfill @PMOIndia Shri @narendramodi ji’s vision of #NewIndia. The budget laid special focus on the Agricultural, rural dev, Health and Education sectors for the overall development”, the Chief Minister wrote on his official Twitter handle.

Deputy Chief Minister Jishnu Devvarma lauded the budget proposal later this evening saying it is ‘pro-poor, pro-village, pro-development. He said the agricultural sector and rural people would benefit from the budget.

However, veteran Congress leader Tapas Dey criticized the Budget and said it was rudderless about providing employment, development of tribals. "This budget reflects the BJP-led central government's policy of financial mismanagement and indiscipline", Dey said.

19:04 (IST)01 Feb 2020
MP CM Kamal Nath slams the Budget

"From five years, Modiji is presenting budget and in five years, they have taken economy at a level where GDP is decreasing and unemployment is increasing. Every year they praise themselves through the media.There was need to make incentive better and increase consumption," says Madhya Pradesh Chief Minister Kamal Nath.

17:53 (IST)01 Feb 2020
India Inc. leaders react to Union Budget 2020

Abheek Barua, Chief Economist, HDFC Bank: The Budget provides credible numbers in terms of the fiscal math, recognising the revenue shortfall faced this year. It uses up the 50bps point leeway that the FRBM act provides for both this and the next year which is a welcome step.

Mr. Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani: While the budget overall had measures directed towards boosting the income of people and enhance their purchasing power through tax relief, it has some specific measures for the real estate sector too. The budget announced the initiative to develop five new smart cities in collaboration with States in PPP mode. This is a welcome move and will enhance the real estate prospects. It strengthened the commitment to affordable housing, which is the government’s focal point for real estate. The previous tax exemptions for both homebuyers and developers have been extended for another one year. Personal tax relief across various income slabs will invariably increase disposable income at the hands of the middle class, and boost their consumption capabilities. Alternative segments have got a boost. While not giving direct benefits to residential real estate as a whole, the budget has laid more focus on alternative segments within real estate – such as warehousing, data centres, schools, hospitals and hospitality. Plans to build Data Centre Parks across the country will boost demand for more real estate spaces. Simultaneously, plans to develop 5 archaeological sites will open new avenues for employment and also indirectly push real estate development. Infrastructure development has been a top priority for economic growth and will have a major multiplier effect on not just the overall economy but on the real estate market as well.

Harshil Mathur, CEO and Co-founder, Razorpay: The budget does meet some of the expectations from the FinTech industry and startups. The introduction of some sort of a tax relief on ESOPs was one of the biggest asks from the startup industry - this deferment of tax payment by five years, to me, is one of the biggest welcome moves by the government in this budget. This is a good start and I hope we see more focus on this going forward. Secondly, the reduction on corporate tax to 22% is an encouraging step. This is the lowest in the world and will be encouraging for Indian businesses. Lastly, the changed income tax slabs and rates is not only a huge income tax relief for individuals but will also lead to an increase in disposable income, thereby giving a boost to consumer spending.

Prakash Mallya, VP, and MD – Sales and Marketing Group, Intel India: The Union Budget highlights the role technology-enabled innovation can play in leapfrogging the nation. From integration in priority sectors like agriculture and healthcare to a continued focus on smart cities, the first budget of the new decade clearly outlines the significance of a digital-first India in realizing the country’s potential. I am especially encouraged by the efforts to use artificial intelligence (AI) and machine learning (ML) to improve disease detection and pre-emption as part of the PM Jan Arogya Yojana. Such applications of emerging technologies combined with the focus on increasing the penetration of fibre connectivity in the nation have the potential to fundamentally impact the lives of millions in the coming years.

Mahesh Balasubramanian, MD & CEO, Kotak Mahindra General Insurance Co. Ltd.: This is a “ Laghe Raho” Budget as there were no quick fixes or grandiose plans but lots and lots of initiatives which will all help keep the economy on course for the 10% realistic Nominal GDP growth planned. Big spend push through National Infra Pipeline, Transport sector and 16 initiatives on Farm growth should help rural economy and growth. Fiscal deficit at 3.5% for Fy 21 is a relief as we stay the course and yet spend extra within limits. Disinvestments target of 2.1 L cr will have to be met through LIC, IDBI etc. Overall, time to switch of TV Channels and go back to the hard grind of execution to get the economy on track. So, as we chase the 5 tn GDP target, its ‘Lage Raho’ for now.

Sanjay Jalona CEO&MD, LTI (L&T Infotech): Acknowledging the influence of technology in shaping new age economy is a distinct aspect of the Union budget. Focus on artificial intelligence and targets set for quantum computing is a step in the right direction to strengthen India’s position as a frontrunner in exponential technologies. From IT services perspective, it will be interesting to see if setting up more export hubs is encouraged by incentives for the industry that has been at the forefront of exports for the country.

17:10 (IST)01 Feb 2020
Removal of DDT will hand companies their further investment: PM Modi on Union Budget 2020

Union Budget 2020: "Investment is the biggest driver for employment. Steps have been taken to strengthen the bond market and finance for infrastructure. The removal of DDT will hand companies Rs 25,000 crore that will be further invested by them," says PM Modi

17:09 (IST)01 Feb 2020
Target to build 100 airports will embolden will of general Indian: PM Modi

"National Logistic Policy will benefit trade, business, and employment. The target to build 100 airports in India will embolden the will of a general Indian. This infrastructure is very important for Indian tourism": PM Modi

17:07 (IST)01 Feb 2020
'Focus on new India in the Budget': PM Modi

"India will now move to become a key member of the global value chain. The skill development of the youth has also been stressed upon. Skill sets needed for the development of a modern and New India have been focussed," says PM Modi.

17:02 (IST)01 Feb 2020
Prime Minister Narendra Modi hails the Budget, congratulates FM Sitharaman

'I congratulate Finance Minister Nirmala Sitharaman and her team for presenting the first Budget of the decade that has vision as well as action. Several new reforms have been announced in the Budget that will give a push to the economy,' says Prime Minister Narendra Modi.

16:37 (IST)01 Feb 2020
Here are some more reactions by India Inc. companies

Atul Rai, Co-Founder & CEO of Staqu: "We appreciate the government’s emphasis on promoting cutting-edge technologies in India. In her Union Budget 2020 announcement, the FM observed that technologies like machine learning, robotics, AI, along with number of productive age group (15-65 years) are cross-cutting streams in India, which is a special attribute for our country".

Mr. Nikhil Kamath, Co-founder, Zerodha & True Beacon: "Nothing substantial seems to have changed, for the government to expect a 10 percent nominal GDP growth rate continues to sound like hubris, the situation on the ground is a lot worse, the need of the hour might be to recognize the issues at hand and transparently deal with them. Personal income taxes being cut do not make a substantial difference to consumption, the rich tax which has essentially with surcharges brought the effective tax rates to 42 percent for the highest bracket continues to be a big deterrent to consumption. This is not yielding substantial revenue gains for the government, and it might have been prudent to do away with this.

Mr. Harsh Jain, Co-founder and COO, Groww: "Making policy for data center parks for digital resources like fintech, AI, aggregator platforms along with the connection of 1 lakh villages via optical fiber internet is great news for digital India. This will definitely increase digital penetration into India that was unthinkable before. Startup ESOPs taxation on vesting will be deferred for five years or till exit - whichever is earlier! This is great news as the current system collects taxes too early. This will encourage more startups to get incorporated and create jobs. It will make it easier for startups to incentivize good talent and attract more skilled talent towards working in startups".

Mr. Pathik Shah, CEO of DB Digital: "Promoting and building data center parks across India and improving connectivity through BharatNet seems like a great move forward - it would be great to leverage both to enable seamless interchange of data across local government bodies and also enabling access to it to private companies to build innovative applications leveraging that data - just like the data.gov initiative by the US government; and that could also help drive data localization forward - depending on the specifics. The way they should be structured should be very similar to UPI - making technology entrepreneurs from across India lead the strategy, architecture and execution of the network and making it open so anyone can plug in - from existing tech giants to startups."

Manit Jain, Chairman, FICCI ARISE: "In order to reach the target of average spend of USD 173 billion a year to achieve the SDG 4 by 2030, it would be an unrealistic expectation to see that coming solely from government and pure philanthropic initiatives. In this context, we welcome the Government’s steps towards encouraging sourcing External Commercial Borrowings and FDI to boost quality education. We hope this would pave the way for opening up and formalising the sector and ensuring long term responsible and patient capital, giving the much needed confidence to potential investors to invest in the sector and expect legitimate RoI as spoken about several times in the past".

Anuradha Singh, CEO and founder at Indi Collage: "Nirmala Sitharaman in her Budget 2020-2021 acknowledged the startup ecosystem as the "strength of India," and proposed a bunch of measures to ensure ease of doing business for Indian startups. Proposal of National Technical Textile Mission with an outlay of Rs 1,480 crore over four years to cut down imports has been a great move to boost the the textile industry. However, with regards to tax exemptions we were expecting some major moves to encourage women entrepreneurship in India."

16:33 (IST)01 Feb 2020
'Claim of 6 to 6.5 per cent growth next year is astonishing': Chidambaram

'The government is in complete denial that the economy faces a grave macro challenge and the growth rate hs declined in six successive quarters. But nothing in the Budget leads us to believe that growth will revive. The claim of 6 to 6.5 per cent growth next year is astonishing and even irresponsible,' says former finance minister P Chidambaram

16:30 (IST)01 Feb 2020
Dhiraj Relli, HDFC Securities MD and CEO, hails the Budget

Mr. Dhiraj Relli, MD & CEO, HDFC Securities: "The FM has done well in abiding by the fiscal prudence principles for FY21 and the targets set by her look achievable. But it will be crucial for her to stick to it for FY21, else the international rating agencies may have adverse views. The markets have reacted negatively to the Budget, mainly due to some disappointments on account of non-abolition of LTCG, confusion about the impact of DDT removal and taxing dividends in the hands of recipients. Also the alternative provided to individuals for lower rate of tax, provided they do not claim exemptions/deductions, did not seem too attractive. The alternative tax system discourages investments which market participants do not seem to be comfortable with. The overhang of coronavirus outbreak on our markets also got magnified in the later half of the session. Foreign investors will look for signs of revival of growth before they commit funds."

16:24 (IST)01 Feb 2020
'Indian economy is demand-constrained and investment-starved': P Chidambaram

"The Indian economy is demand-constrained and investment-starved. The FM has not acknowledged these two challenges, and that is a pity. Consequently, she has proposed no measures or solutions to those two challenges. If the twin challenges remain, the economy will not turn around and there will be no relief to the millions of poor and the middle class," says Congress leader P Chidambaram.

16:14 (IST)01 Feb 2020
Budget ensures we continue to remain economic powerhouse: Piyush Goyal

Union Minister Piyush Goyal hailed the Budget and said it is a welcoming step towards 5 trillion dollar economy. "It is a balanced Budget which prepares India for the decade ahead of us and prepares it to be a 5 trillion dollar economy. It also covers a vast canvas both on the social side, on economic development and ensures that we continue to remain an economic powerhouse," Goyal told news agency ANI.

16:10 (IST)01 Feb 2020
Govt has given up reviving economy: P Chidambaram slams Budget

Congress leader P Chidambaram on Saturday slammed the Budget and said that the government had given up on reviving the economy. 'I am at a loss to understand what was the message intended to be conveyed by Budget 2020-21. I am also not able to recall any memorable idea or statement in the speech. The government has given up on reviving the economy or accelerating the growth rate or promoting private investment or increasing efficiency or creating jobs or winning a greater share of world trade,' he said. "You did not ask for such a Budget and you did not deserve such a Budget for voting the BJP to power. But you have to live with it until the government is forced to revisit it as it did in 2019," Chidambaram added.

15:52 (IST)01 Feb 2020
India Inc reacts to Budget 2020, says good step in direction of 5 trillion-dollar economy

Mr. Vikas Garg, Deputy CFO, Paytm: 'We see this budget as a good step in direction to become a $5 trillion dollars economy. As a technology player embedded in India’s technology ecosystem, we welcome the government’s vision to build Data Centre Parks in the country. The government’s focus on enhanced digital connectivity, and focus on emerging technologies such as machine learning and artificial intelligence, along with the allocation towards quantum computing are sure to provide a fillip to India’s economy'

Jaideep Hansraj- MD & CEO Of Kotak Securities: “The Union Budget has tried to balance higher expenditure and still maintain a prudent Fiscal Deficit target of 3.5% for FY21. Removal of Dividend Distribution Tax (DDT) will lead to higher cash flows in the hands of cash-starved India Inc. If individual tax payers opt for the new tax regime then it will result in higher cash in the hands of the individuals. This in turn would lead to increased spending or higher investments, both being good for the country. Nominal GDP growth estimates of 10% for FY21 looks realistic on the back of lower base of FY20. Listing of LIC would help bridge a gap in the Fiscal Deficit for FY21. Market expectations were high on capital market reforms which have not materialised and to that extent there could be some near term disappointment. As earnings recover in the course of next fiscal year, markets will also follow a similar path.”

Sunny Kataria, VP, OLX Auto India: 'The focus on the rural economy will be an integral factor for the auto industry as more income in the rural areas will translate to a spurt in demand for two-wheelers, Agri related auto products like tractors, cars such as entry-level cars and utility vehicles. I was glad that the government addressed the liquidity crisis of the NBFCs which would mean more inflow of capital for the auto segment. The government allocating over 1.7 lakh cr for infrastructural development is a positive step towards ensuring more connectivity between key industrial corridors which should augur well for the automobile industry'

Neeraj Roy, Founder & CEO, Hungama Digital Media: "The government’s plans to promote entrepreneurship through Investment Clearance Cell is an interesting move that should be brought into effect at the earliest in order to boost employment and self-reliance. Easy accessibility along with a fair and transparent implementation will decide its success. Likewise, the proposal to provide early life funding including a seed fund, should help in promoting ideation and creativity. I also look forward to the new education policy and hope that it includes special initiatives to increase digital literacy. Digital education needs to start at the grassroots level in order to ensure that the youth of tomorrow are well-equipped to secure better prospects."

15:46 (IST)01 Feb 2020
PM, FM looked like they have no clue what to do next: Rahul Gandhi slams Budget

Former Congress president Rahul Gandhi on Saturday slammed the Union Budget and said that it looked like both the Prime Minister and the finance minister had no clue on what to do next. He said the youth needed jobs, but instead got the longest budget speech. "Our youth want jobs. Instead they got the longest budget speech in parliamentary history that said absolutely nothing of consequence. PM & FM both looked like they have absolutely no clue what to do next," he tweeted.

Finance Minister Nirmala Sitharaman presented the first Union Budget of Modi 2.0 earlier today as she is tasked with growth revival of the declining Indian economy. President Ram Nath Kovind addressed a joint sitting of the Parliament on Friday on the opening day of the Budget session 2020. The session which began on January 31, 2020 will continue until April 3, 2020 with the first phase concluding on February 11. The session will resume after recess from March 2, 2020.

Presenting the Budget for 2019-2020 in July, Finance Minister Nirmala Sitharaman had proposed several reforms in various sectors including public sector banks, corporate tax, and railways. The Centre had hiked taxes on petrol and diesel, raised import duty on gold, levied an additional surcharge on the income of super-rich and brought a tax on high-value cash withdrawals. The Finance Minister had sought to spur growth with a reduction in corporate tax and sops to affordable housing, startups and electric vehicles.

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