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Budget reactions: What business leaders have to say about Arun Jaitley’s speech

Finance Minister’s Jaitley’s Budget allocated massive funds for rural infrastructure and unveiled a health insurance programme for around 500 million poor. Here’s what business leaders had to say

india Updated: Feb 01, 2018 18:40 IST
Union Budget 2018,Budget 2018 Reactions,budget 2018 agriculture
A man walks past a digital screen showing finance minister Arun Jaitley delivering the budget speech at Parliament, at the Bombay Stock Exchange in Mumbai on February 1, 2018. (AFP Photo)

Business leaders and companies are reacting after Finance Minister Arun Jaitley presented the 2018/19 Union Budget that focused on funds for rural infrastructure and unveiled a health insurance programme for around 500 million poor. Here are reactions to the budget.

Abheek Barua, chief economist, HDFC Bank

“Under normal circumstances, a modest slippage in the fiscal deficit this year and the deviation from earlier outlined target of 3.0% would seem fair and sensible. But given the current nervousness in the bond market perhaps a more aggressive fiscal consolidation was required.

While more extensive and higher insurance coverage for poorer families is welcome, its funding remains an open question. One has to see whether the targets set for receipts are credible. Prima facie at least the GST collection target seems reasonable.”

Chanda Kochhar, MD and CEO, ICICI Bank

“The Union Budget 2018-19 has done a commendable job in holistically addressing the various priorities of the Indian economy. It has addressed social sector priorities and charted out a clear plan to boost infrastructure, while maintaining fiscal discipline.”

Vivek Gambhir, MD and CEO, Godrej Consumer Products Limited.

“This aam aadmi rural focused budget to build ‘New India’, reinforces the Government’s pro-inclusivity, pro-growth, pro-reform agenda. It is largely positive for FMCG; proactive efforts to drive demand and increase consumption should revive growth. Over the last couple of months, as GST implementation is settling down, we are seeing FMCG growth come back on track and these initiatives will provide an additional fillip, especially to rural. However, the need of the hour is to ensure that these initiatives get translated into tangible results through faster implementation and better on-ground execution.”

Ajay S Shriram, CMD, DCM Shriram Ltd

“Budget 2018 presents an encouraging outlook for a wide cross section of stakeholders. The FM [finance minister] has taken a long term view by focusing on agriculture, health care, education and infrastructure. It addresses specific pain points of the farmer by undertaking three major initiatives.”

Shyamal Mukherjee, Chairman, PwC India

“This year’s budget clearly illustrates the Government’s intent to look at development holistically. The thrust on fueling the rural economy through measures around agriculture and creating an enabling eco-system through investments in infrastructure is commendable. These, in addition to incentives planned for MSMEs, will help create additional jobs. The healthcare sector was in dire need for attention and it is good to see the Government address some of its concerns with bold and aspirational initiatives. The efforts towards strengthening India’s position as a digital economy through investments around new age technologies like AI and Fintech is a timely and welcome move.”

Pierre de Bausset, president and MD, Airbus India.

“The budget has sought to strike a balance between India’s need for economic growth and the wellbeing of its citizens. Investments to improve people’s health, education and skill development are vital for long-term growth prospects of a country, and the budget has rightly focused on them. It addresses the aspirations of a modernising nation through initiatives to expand air connectivity under the UDAN scheme. ”

Shilpa Divekar Nirula, CEO, Monsanto India Region

“The Union Budget 2018 has reiterated the government’s rural focus and its commitment towards India’s agriculture sector. Announcements through measures regarding farm output seem to be the key highlight. These include MSPs, improved market linkages and increased allocation towards the food processing sector.

“The continued emphasis on irrigation and farm insurance will provide further impetus to help farmers manage risks associated with cultivation.”

Sanjiv Puri, CEO, ITC Limited

“I would like to congratulate the Finance Minister for presenting a “Jai Kisan, Jai Swasthya, Jai Bharat” Budget. The holistic approach to address critical sectors including agriculture, food processing, infrastructure, healthcare and human capital, which follows a slew of transformative reforms like GST undertaken earlier, will go a long way in fostering inclusive growth and strengthening the competitiveness of the Indian economy. The landmark announcement to create the world’s largest Government funded healthcare programme is also path-breaking and will benefit millions of households.

Dr Niranjan Hiranandani, president, NAREDCO

“When he started his Budget Speech, Finance Minister Arun Jaitley said what has been largely expected that the budget will focus on agriculture and rural economy. He did not disappoint this expectation, with what is largely a ‘Socialist’ budget. The Finance Minister has managed to balance populist demands, the need to support economic growth and Prime Minister Narendra Modi’s focus on fiscal discipline and reforms.”

Adhil Shetty, CEO and co-founder BankBazaar

“Rs 5 lakh is a great mediclaim amount and 50 Cr individuals is a great target. This will create tremendous awareness for medical insurance in the same way as Jan Dhan which ensured every Indian to have a bank account. This will push for every Indian to have medical insurance.

On life insurance the PM Jeevan Jyoti Bima Yogana including Rs 2Lac Life cover is being pushed across a larger base which is a great sign. Rs 2 Lac critical cover is also being extended to a larger base.”

Amar Ambani - Partner & Head of Research, IIFL Wealth

“The worst fear for stock market investors came true in Budget 2018-19 with reintroduction of long term capital gains tax @ 10%. The Finance Minister should have at least done away with securities transaction tax (STT) on listed shares and withdrawn dividend distribution tax.

“On the fiscal deficit front, although the slippage for FY18 and FY19E is higher than anticipated, it will still be among the lowest levels of deficit seen in the last three decades. Therefore, the move should be viewed as a pause, and not a deviation from the path of fiscal consolidation. At this point of time, focus on economic growth is desirable.”

Rana Kapoor, MD & CEO, Yes Bank

“The admirable ‘All-in’ Budget has delivered beyond expectations in a bid to reinvigorate growth that is sustainable and equitable, leveraging fully on the available fiscal space. In the backdrop of past reforms culminating into early green shoots for investments, a credible rise in allocation for infrastructure by 21,% accompanied by broadening of corporate tax relaxation for MSMEs, a chiseled focus on generating livelihood creation in agriculture and rural sectors via new Operation Green and National Health Protection schemes, incentives to enhance employment in labor intensive sectors of textile, leather and footwear will ensure a stronger consumption and investment impetus in FY19.”

Anand Ramanathan, partner, Deloitte India

“An effort has been made to address the impact of changing dietary patterns and the increased consumption of proteins through the announcements made in animal husbandry and fisheries. This will also help India from an exports standpoint in the marine sector. However, would have also liked to see a similar focus on promoting investments in horticulture which is another high impact area from a changing food pyramid perspective.”

Shilan Shah, India Economist, Capital Economics, Singapore

“It was no surprise to us that they relaxed the deficit targets. It looks like the BJP is aiming to shore up support among rural voters, there have been plenty of measures announced to boost the rural economy. These are quite trademark things ahead of an election.

“In cumulative terms, the deficit has already overshot the previous target, it had to be revised up, but it does need to demonstrate some kind of fiscal prudence. The deficit this year will be same as last year, I don’t think that comes as a surprise.”

Radhika Rao, group economist, DBS, Singapore

“Overall measures have very strong social sector emphasis, which covers agricultural and rural sectors all the way to health and education sectors. Simultaneously, there is focus on infrastructure as well.”

“As early as Aug-Sept last year, as the fiscal numbers were coming in, we were expecting a slippage in this target. But it has panned out. The bond market had expected fiscal slippage, I think it has not been as wide as feared.”

“Divestment is expected to be much better than targeted for the first time in many years.”

Sujan Hajra, chief economist, Anand Rathi Securities, Mumbai

“We were expecting (fiscal deficit of) 3.4 percent for the current year and 3.2 percent for the next year, and these announcements are slightly higher than expected. This is slightly negative for bond markets. The long term capital gain is a singular negative thing for the stock markets.

“With the agrarian crisis and unemployment situation, these kind of policies are expected with or without elections.”

Harish Doraiswamy, VP, qualifications, schools & vocational, Pearson India

“The government has presented a well-balanced budget with a focus on addressing the fundamental needs of education in India. The budget rightly focuses on movement from traditional blackboards to digital boards which offer enhanced learning experience to students.”

First Published: Feb 01, 2018 13:27 IST