The Firm

Show Timings:

Friday: 10.30 pm, Saturday: 11.30 am

Sunday: 9:30am & 11.00pm

CNBC TV18
Network18

Budget 2015: CEO Point Of View

Published on Sat, Feb 28,2015 | 22:17, Updated at Mon, Mar 02 at 17:48Source : Moneycontrol.com 

N Chandrasekaran, CEO & MD, TCS

The FM has delivered a bold, far sighted budget that will help raise the country's profile as an investment destination. It aims to make structural changes that will help drive higher corporate investment on a sustainable basis. These include the commitment to simplification and rationalization of the taxation structure and setting a clear roadmap of reform for the next four years. However, the short term impact arising out of increase in surcharge and service tax are matter of concern. The move to encourage use of financial products and services among a larger proportion of the population as well as the efforts towards monetization of gold are great building block to build a vibrant and deep financial services sector. The government's moves to encourage fund managers to relocate to India will also drive greater integration of the India into the global financial services economy.

The focus on education through greater investment in institutions of higher learning as well as in skill development and the financial support for students will also help India capture its demographic dividend. Another important signal is the ongoing commitment to Digital India which will result in important opportunities for the IT sector. Extending the digital financial infrastructure through its support for greater use of payment systems like Rupay as well as the creation of a widespread broadband infrastructure will spur India's aspiration to become a "Smart Nation".

Arundhati Bhattacharya, Chairman, State Bank of India   

The Budget has laid out a clear and tangible roadmap for the future. The decision to incentivise credit and debit card transactions coupled with the proposed new law on black money will bring down the social cost of unaccounted money, apart from adding to the bank bottom-line. The move to frame a Public Contract Bill will kick start activities in the construction sector plagued by disputes. The move to bring NBFCs at par with financial institutions will help banks to clean up their balance sheets by selling stressed assets at an early stage to ARCs. This apart, framing of Bankruptcy Law, sprucing up public investment to channelize private investment and monetisation of gold assets are positive steps.

Y C Deveshwar, Chairman, ITC

The FM has taken comprehensive steps in the budget to address the core issues of fostering growth with equity, boosting investments and creating jobs over the medium to long term.  The focus on agriculture, infrastructure, health and education will enhance the social fabric and contribute to equitable growth. Targetted subsidies will meet the twin objectives of benefiting the poor as well as arresting the systemic leakages.  Steps taken to improve the ease of doing business, particularly for the MSME sector, will give a fillip to job-creating investments. The strong measures to eliminate black money and to impose exemplary punishment is a bold step to curb the parallel economy and mainstream resources for productive growth.

Chanda Kochhar, MD & CEO, ICICI Bank

The Union Budget for fiscal 2016 is the Finance Minister’s GIFT to the nation. There is a clear and sharp focus on the four key areas of Growth, Inclusion, Fiscal Prudence and Tax Rationalisation. The budget promotes Growth through its focus on infrastructure and ease of doing business. The theme of Inclusion is reflected in the measures taken to empower all stakeholders – there is greater devolution of resources to States and there are a number of measures for the poor, youth and senior citizens. The Fiscal target of 3.0% by fiscal 2018 articulated by the Finance Minister is prudent while at the same time balances the current growth needs of the economy. The clarity given on the Tax regime will go a long way in making India an attractive destination for investments, and encouraging domestic savings. The budget reflects the vision of the Government and takes India forward on a path of growth and inclusive prosperity.  

Onkar S Kanwar, Chairman, Apollo Tyres

This is a truly reformist budget and I’m most heartened to see that the Finance Minister has set a solid roadmap for the Indian economy. There are big changes for business as expected and the most awaited reform – that of GST, has been finally announced. This is bound to reinvigorate industry and will make definitely make manufacturing more competitive. The GST, by subsuming a large number of central and state taxes into a single tax will help establish what we need - a common national market.

The additional focus on roads and rail infrastructure along with an increased spend of Rs 70,000 crore will also prove to be beneficial for the economy as well as the tyre industry. The announcement of the commissioning of five "ultra-mega" generation projects to end India’s chronic power shortages is another commendable step to ending our infrastructure woes. The further reduction in Corporate Tax from 30% to 25% in four years is also a huge positive for us, as it will provide yet another fillip to the ‘Make in India’ story.

However, I continue to be hopeful that the Finance Minister will also address the anomalies of the inverted duty structure in the immediate future and give a fillip for tyre manufacturers to 'make in India'

Banmali Agrawala, President & CEO, GE South Asia

The Finance Minister has presented a highly pragmatic budget that provides a good balance between increasing capital outlay and restricting fiscal deficit. By reiterating its resolve to stay on the path of fiscal prudence and taking steps to plug leakages of subsidies by direct transfers, the government has given the right message. The budget is a roadmap for demand generation which in turn will attract investment, create jobs through manufacturing and entrepreneurship, all of which play a vital role in the success of the ‘Make in India’ campaign.

The focus on building infrastructure through innovative financing models, better balance of risks between private sector and government and initiatives such as pre-approved clearances, are welcome steps. We appreciate the “green focus” on Energy by encouraging renewable energy and levying a cess on coal which will reinforce India’s commitment to the environment within the international community.

Going forward, with a much higher share of revenue now being given to the States, there is a need to ensure that the States spend the money judiciously and there is better coordination between various States and between the States and the Center. The overall direction of the budget is appropriate and will further inspire confidence of the global business community in India.

Vinod K.Dasari, MD, Ashok Leyland

The main budget feels like solid middle order batting that follows an explosive opening knock by the Honorable Railway Minister.  Three themes in this budget are critical to industry.

The first theme is infrastructure. Over 100,000 km of roads have been targeted over and above the massive push in the rail sector, in addition to the discontinuous investments in public amenities through the Swacch Bharat Abhiyaan. The massive boost in infrastructure spend (Rs 70,000 crores), as well as the mechanisms announced to fund it, will kick-start a virtuous cycle, resulting in significant primary demand for commercial vehicles.

The second theme is grassroots entrepreneurship. MUDRA bank, formed to refinance MFIs, as well as the Jan Dhan – Aadhaar- Mobile program are both directed towards creating grassroots entrepreneurs. By entering the formal banking system, the poor get access to lower cost finance, especially once the overdraft facilities kick in in Jan Dhan accounts.  Grassroots entrepreneurs require low cost transport, and this will drive demand for SCVs.

The third theme is reform. Introducing a new bankruptcy law, announcing a roadmap to lower corporate taxes and other such actions are clearly directed towards making India more competitive to do business. Continued push in this direction will encourage more players to enter India, bringing investments as well as boosting economic activity.

While there has been no excise duty modification in the automotive sector, I believe that long term demand creation is more sustainable than short term sops to boost consumption. The government has moved in exactly this direction with this budget.
The Government has also correctly decided to drive small, incremental improvements rather than big bang reforms. In our own experience, the centerpiece of any turnaround is not a big, innovative idea but Mission Mode execution. This Government has demonstrated its ability to execute in Mission Mode, for example, during the rollout of Jan Dhan Yojana. I believe that this will continue.?

R Mukundan, Managing Director, Tata Chemicals

The Finance Minister has set the direction for a balanced and inclusive growth emphasising on increasing agricultural productivity, farm income, increasing investment in infrastructure, manufacturing maintaining fiscal discipline as well as raising social spend. There is nothing specific announced for any particular industry including Chemicals & fertilizer  Industry, however, rationalizing subsidies is a welcome step and we look forward to its implementation. Reduction in customs duty on certain raw materials will help the manufacturers going forward. The proposal to reduce corporate tax from 30% to 25% over the next four years is a welcome step for the industry and is expected to boost investment as the tax structures simplify. Proposals underlined by Shri Jaitley under ease of doing business and the focus to support the startups will also go a long way in encouraging domestic manufacturing. Further, we also look forward to the implementation of GST,  further simplification of tax structures and  clarity on PPP opportunities in various sectors which will give a boost to the ‘Make in India’ campaign.

Gautam S Adani, Chairman, Adani Group

This budget is focused on ease of doing business “make in India”, infrastructure, social sectors. Introduction of GST from 1 April 2016, will definitely rejuvenate the industry and make manufacturing more competitive. This, coupled with clarity on GAAR deferment for two years and no retrospective applicability, comprehensive bankruptcy code, abolishing wealth tax act, merger of FMC with SEBI, rationalization of corporate tax from 30% to 25% coupled with review of deductions, etc. supports "make in India" Campaign.

Creation of National infrastructure fund, tax free bonds for infrastructure projects like road, rail and irrigation projects; plug and play for 5 UMPPS, corporatization of major ports, similar actions in  rail and road projects, , development of manufacturing zones along DMIC,  “Public Contract Resolution of Dispute Bill” etc. will speed up creation of infrastructure projects.

In the social sector, Direct Transfer of Benefits, (DBT), soil health card, prudent water management for irrigation, social security for poor (Atal Pension Yojana, accident related death benefit etc.), increase in deduction for health related costs, support for self employment activities in IT sector, support for SMEs managed by SC/ST deduction of Rs. 50,000  from taxable income for NPS contribution, 100% tax deduction  on contribution to Swatch Bharat initiative, etc are aimed at improved social security, promoting cleanliness and entrepreneurial activities for employment generation.

Overall, prudent fiscal consolidation with growth bias; tax structure rationalization; social sector upliftment and focus on infra spending would serve the Nation well.

Arvind Saxena, President& MD, General Motors India

The budget looks to be a pragmatic one as it focuses on infrastructural development, education, skill development, agriculture, irrigation,  health care and social security schemes .  Given the condition of the economy, the direction given in the budget is a positive one and the call for fiscal prudence looks good.  The government’s intention to introduce GST, reduce the corporate tax from 30 to 25 per cent over a 4 year period, simplification of the tax regime, financial sector reforms, GAAR deferral are encouraging news. The steps outlined for the manufacturing, power, coal and mining sectors should spur economic activity  going forward. Having said this, a monitoring mechanism should have been in place to  ensure  timely implementation of the projects in these sectors. As far as the automotive industry is concerned, we were expecting excise duty cut on all categories of vehicles as the auto industry continues to bleed due to high interest rates, economic slowdown etc. There are some changes in CST and also on customs duty which need to be clarified from the fine print. Having  said this, the  focus on rural roads, highways, expressways, incentives for electric vehicles are welcome decisions.  Some of the other announcements made by the finance minister on the direct taxation front are also positive steps.  Overall, the budget lays down a blue print for a stable tax regime that can lead to growth in the economy.  These proposals and announcements made in the budget, if implemented effectively, should have a positive impact on industry and the economy as a whole going forward.    The challenge now is the implementation of the proposals.  Our hope is that the market will respond favorably.

Tulsi Tanti, Chairman, Suzlon Group

We welcome this budget as it is positive, growth oriented and puts forth realistic roadmap to attain sustainable economic growth.

The government’s thrust on renewable energy is clearly visible in the target of achieving 175 GW by 2022.

India in the last 25 years India has done 34 GW and in the next 7 years we now have a target of 175 GW, comprising of 60GW wind energy which is an ambitious target for the industry and we welcome the move since it is in the right direction. The budget reiterates mission and vision of the government to achieve the following:

·         Affordable sustainable energy for all

·         Low carbon economy

·         Achieve energy security

·         Long term sustainable economy & sustainable jobs

The government’s commitment to green India manifests in some of the additional measures such as increasing the coal cess from Rs. 100 to Rs 200 thereby providing impetus to clean energy

We appreciate the focus on providing impetus to the Make in India vision by giving clarity on taxes, definitive measures to ease of doing business in India and encouraging domestic and foreign direct investment. However, in our view to provide further stimulus for investment in captive renewable power by the manufacturing units, interest rebate should be given, which will also ensure success of Make In India.    Further, innovative financing measures such as infrastructure bond, creation of mudra bank for MSME sector also augurs well for Make in India. So overall we see the budget has provided several initiatives to boost manufacturing in India.  

We are confident that the renewable energy in India will take off from here and witness exponential growth in the next few years and will power a greener tomorrow.

C. Sasidhar, MD, Krishnapatnam Port Company Ltd (KPCL)

The Union Budget – High On Potential, Will Make India
The Union Budget 2015-16 presented by the Hon’ble Union Finance Minister could have a high and long lasting impact on society with its emphasis on rural and infrastructure development.

The Government’s strong intent to boost infrastructure development in India with the National Investment and Infrastructure Fund along with the introduction of tax- free infrastructure bonds for projects in railways and roads are commendable. The clarity provided to foreign investors on the tax regime as also the potential ease of making investments will only encourage infusion of much needed funds in Indian infrastructure industry.

The performance of any Government is often based on the impact on the lower denominators of society. The Union Budget is inclusive in every sense of the word with proposals for the urban middle class, agricultural sector, minority youth, women empowerment, rural India, physically challenged and senior citizens of the country. It is a budget which lays emphasis on developing thecore and soft infrastructure in the country to truly Make India.

M Murali, MD, Shriram Properties

I would say the budget is positive and balanced – a kind of visionary and reformist budget. In India, not much ago, the overall sentiments, particularly the investment sentiment was  so doom and gloom. Fortunately we have come out of it .Thanks to the stable Government and reforms envisaged.  Investors are seeing India with renewed interest and hope now. There has been dramatic restoration of confidence   in macro economic stability. In a situation like this, this is a good budget.

The Economic Survey has projected a growth of 8.1% – 8.4% in FY16 .To accomplish this, the survey has advocated higher Government spends for infrastructure followed by higher private sector participation. Finance Minister in his budget speech has said   that Investment in infrastructure will go up by 700 billion rupees in 2015-16 over last year .This is laudable and the move indicates  that we are on the proper growth path.

While the Fiscal deficit is seen at 3.9 per cent of GDP in 2015-16  , I would also appreciate the approach of   keeping  fiscal discipline in mind despite need for higher investment  .

Bringing in   a new bankruptcy code is a good move.  As also , creation of a universal social security system for   all Indians. Announcement of   insurance scheme with Rs 2 lakh cover for accidental death at a premium of just Rs 12 a year, a pension scheme where the government will contribute half the premium for five years are real sops for the poor and less privileged.

Measures   towards unearthing  and eradication of black money is most welcome in Economy like India.  

GST plays a transformative role in the whole of   our economic activities .It is heart warming   that we can expect implementation of   Goods and Services Tax by April 2016.I am sure this will definitely rejuvenate the industry.

As to Real Estate, the industry was keenly waiting to see kind of subsidies, measures or growth stimuli for making   the –“ house for all by 2022 “-a reality  and was looking for various incentives and initiatives at policy levels. I am sure FM will revisit  the submissions of the real estate industry.

Ravi Uppal, MD & Group CEO, Jindal Steel and Power Ltd

The government needs to be commended for staying its strategic course. The budget is consistent with its policy stance and stands for continuity. It creates a predictable policy environment, which should go a long way in soothing the nerves of investors. This along with its stress on creating a transparent and ethical context for business will boost the confidence of both doth domestic and foreign investors. Also, commendable is its commitment to enhancing ease of doing business in India through measures like single-window clearance.

Rathin Basu, Country President, Alstom India and South Asia

The Union Budget for Financial Year 2015-16 evenly balanced budget between industry and common people. Given the limited fiscal space, Finance Minister Arun Jaitley has taken several small but positive steps instead of any Big Bang reform announcements. While there are positive initiatives towards power sector including UMPPs and Renewable projects, one needs to see the execution speed, particularly in view of huge NPAs stuck with IPPs and State Discoms.

The budget proposal to set up five ultra mega 5 new Ultra Mega Power Projects of 4000 MW each is a welcome move. The budget has also proposed tax free infrastructure bonds for projects in the rail, road and irrigation sectors.  I am of the view that the ambit of such instruments must be expanded to include power as well, given that power sector also needs sizeable investments in line with the government’s commitment of power to all by 2022

T.S.Kalyanaraman, Chairman & MD, Kalyan Jewellers

The India Union Budget 2015-16 presented by the Hon’ble Finance Minister in the backdrop of high expectations has the distinct touch of the new regime. It has steadily continued the process of building the platform for long- term growth without falling to the temptation of populism.

The budget is positive on several counts and a step in the right direction. The commitment to meet India’s fiscal gap target of 3% by FY 18 is a redeemable aspect of the budget. It is a commitment to fiscal consolidation and should be well received by global investors and domestic savers. The resolve to implement GST from FY16 will augur well for industry. Gradual reduction of corporate tax rate to 25% over the next 4 years will spur domestic investment and accelerate growth.

The acknowledgment of gold consumption in the country with the introduction of the Gold Monetisation Scheme is an encouraging initiative which will help convert the physical asset to a liquid financial asset. The proposed Gold coins with the Ashoka Chakra will also encourage recycling of gold among domestic consumers and give a fillip to ‘’Make in India’’. The resolve of the Government to discourage cash-based transactions augurs well. However, the implementation will have to be in a phased manner considering the fact that a significant class of consumers of gold and gold jewellery, especially in rural India, may not have a PAN card and are yet to be integrated into the nationalised banking network. This move may trigger more purchase from the unorganised sector leading to a loss to the exchequer. Therefore, it is imperative that the Government introduces a stringent implementation framework which ensures compliance.

The Budget has also emphasized on the need to provide housing and healthcare in the real India and continues to encourage infrastructure in the country. It is heartening to see the attention given to the often neglected sections of the society, especially the senior citizens and the physically challenged. In this context, the move to upgrade National Institute of Speech and Hearing (NISH) in Thiruvanthapuram to the University of Disabilities Studies and Rehabilitation is commendable.

The Union Budget has provided clarity on the some of the issues which will help boost investor sentiments. The platform has been laid with the Budget and it is for the industry to seize this golden opportunity.  

Rana Kapoor, MD & CEO, YES Bank

The FY16 Union Budget is a brilliant example of ‘actions meeting intent’. The Finance Minister has taken abundant steps to meet the high expectations by adopting a holistic approach towards ensuring a takeoff of investment-led economic growth, embossing ‘Ease of Doing Business’ in administrative and institutional architecture, furthering financial markets development and penetration, and enhancing social inclusion, amongst others.

It is heartening to note that these exemplary objectives have been codified into actionables for the forthcoming year, within the ambit of incremental fiscal consolidation, with focus on quality of adjustment.

.  Headline fiscal deficit at 3.9% of GDP for FY16 will be at its lowest level in the post-global financial crisis period

.  With subsidy expenditure getting reined in at 1.7% of GDP (from 2.1% in FY15), the Government’s capital expenditure will increase to 1.7% of GDP (from 1.5% in FY15) thereby help crowd in private investments.

.  The Budget has committed to an increase in capex by public sector enterprises by INR 800 bn, a growth of 24% over FY15 RE

For me, key innovative and transformational outcomes from the FY16 Union Budget are:

.  Efforts to monetize existing unproductive gold holdings in the country through Gold Monetization Scheme and Sovereign Gold Bond. In addition, incentives for producing gold coins domestically will leverage the ‘Make in India’ platform and dissuade existing imports. These steps will tap the inherent appetite for gold and channelize it into productive financial savings and domestic manufacturing.  

1)     Liberalization of foreign investments, including fungibilty between FII, FDI and other sources for all sectors including Banking will enable companies to raise long term capital at competitive prices, which will help immensely in boosting the ‘Invest In India’ agenda. This is a key big and bold reform.

2)     Making Rs 20,000 Cr budgetary provision for the newly conceived National Infrastructure Investment Fund

·         The budget has created the right enablers for an infrastructure-led revival via tax free bonds for rail, roads and irrigation; higher budgetary support to roads and railways, replicating ‘plug-and-play’ model for UMPP to other sectors.

·         The PPP model of Infrastructure to be revitalized and realigned.

3)     Setting up of a Bank Holding Company as a core investment company to hold equity shares in public sector banks with features of enhanced governance and administrative quality.

4)     Phased reduction in corporate tax by 5% i.e. from 30% to 25% over the next four years, along with postponement of GAAR by 2 years to boost investor interest and sentiment and further the vision of ‘Make in India’. Hardwiring GST implementation by 2016 clears the protracted uncertainty on its final timing.

5)     Implementation of a 10% increase in devolution of divisible pool of resources to States accompanied by a compositional shift in the Centre-State allocations of various programs. The states will enjoy a high level of economic empowerment in true spirit of cooperative federalism.

6)     MSMEs: Linking growth and socio-economic transformation to Actualize ‘Make in India’ - Recognizing the importance of entrepreneurship, the Budget FY16 has provided a strong thrust on MSMEs with a synchronized effort to a) encourage innovation and b) improve access to finance.

Conclusion: The reaffirmation of the commitment of the Government to induce investments, create jobs and uplift the quality of life and public health of individuals in a bid to ‘regenerate India’, has been the overarching theme of this year’s Budget. In my opinion, this is a Budget which can be branded as the most defining Budget of recent times. With credible fiscal arithmetic and pronouncements resonating the right ‘economic signals’; it is bound to find favour among all economic stakeholders.

C Shekar Reddy, National President, CREDAI

The Budget quite disappointing for the real estate sector as Budget has not given any impetus to the sector. The sector provides much needed employment, which is the need of the hour, yet, the only provisions in the Budget for the real estate sector is the pass through tax for investments in the Real Estate Investment Trusts (REIT’s) and rationalization of the capital gains for the sponsors exiting at the time of listing of the units of REITs and InvITs. The Government has allocated Rs. 22,407 Crores in the budget for Housing & Urban Development. The government envisages a plan to construct 2 Crore houses in rural India, 4 Crore houses in the urban areas towards achieving housing for all by 2022. It is not clear how these targets will be achieved.

Moreover our demand for infrastructure status to the affordable housing, home loan interest rate subvention schemes to enable affordability for housing and propel the demand for affordable housing (houses below 80 sqm) has not been heeded to. These along with the adoption of liberal FSI norms were critical to drive the affordable housing demand and supply to achieve ‘Housing for all by 2022’. To top it all, contrary to our demand for removal of service tax on affordable housing, the service tax has been increased from 12.36% to 14% adding to the cost of houses. Their was a requirement of a special package for the affordable housing segment. ”

 Now we look forward for initiatives from RBI to reduce the overall rates to stimulate the demand for housing. We strongly recommend the government to come out with a special stimulus package to boost the affordable housing segment to meet the existing housing shortfall and achieve the objective of ‘Housing for all by 2022’. We are also looking forward for the government to streamline the approval process which will enable the ease of doing business.

Nitin Jain, CEO – Retail Capital Markets & Global Asset Mgt, Edelweiss

I would rate the budget a 7 and a half on a scale of 10! Though it is a fairly well balance budget, the market expectations were really sky rocketing before this day. So I would not be surprised to see a market correction of maybe 5-6%. It is not close to the ‘Visionary document’ that people have been talking about. Overall, I would still say it is well balanced one. The levy on corporate taxation, rationalization of wealth tax, incentives by more expenditure towards infrastructure are all positives. But no where close to what markets were expecting.

For NBFC’s the SARFAESI law is a huge positive, for some infrastructure companies, especially in roads, the EPC companies should do very well. But that is where I would stop. There were much more expectations on infrastructure spending and more than all of this, the expectation on announcements for Banks as banks are in massive need for recapitalization and the budget fell short on those expectations but maybe those may follow soon.

 
Twitter


 
Copyright © e-Eighteen.com Ltd. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of moneycontrol.com is prohibited.