Kumar Mangalam Birla, Chairman, Aditya Birla Group
Kumar Mangalam Birla
The two signal areas of this Budget are agriculture and health. One key announcement that promises to be a game changer is the increase in minimum support prices (MSP) for agricultural products to 150 per cent of the cost of cultivation. The other significant announcement that will have large scale ramifications is the National Health Protection Scheme, that aims to provide medical insurance coverage to 100 million households, nearly 40 per cent of India’s population. This was a felt need and in many ways a life-changing initiative. Overall, the Budget manages to drive the government’s growth and social agenda. The theme of inclusive growth is unmissable.
Adi Godrej, Chairman, Godrej Group
I was a little disappointed. The Finance Minister has not reduced the corporate tax rate for large companies. It is only the small and medium enterprises, who will benefit. This will make India uncompetitive especially at a time when countries such as the US and the UK are reducing corporate taxes. I am also disappointed with the long-term capital gains tax. There is already a securities transaction tax, which hasn’t been removed, implying that we are seeing an incidence of double taxation. Then, there is a dividend distribution tax on equity mutual funds. There is nothing to my mind in this Budget, though some measures in agriculture and health care are good.
Chanda Kochhar, MD and CEO, ICICI Bank
The Budget has done a commendable job in holistically addressing the various priorities of the Indian economy. The measures announced for various segments of the rural economy will boost income levels and create gainful and sustainable employment. The National Health Protection Scheme will be the largest of its kind in the world. Allocations for roads and railways are at all-time highs, and all these measures have been undertaken with continued fiscal prudence. The adoption of a maximum level for public debt to GDP will instil even more confidence in the fiscal framework. Overall, the Budget has laid out a vision for higher economic growth along with social empowerment.
Sanjiv Puri, CEO, ITC
I congratulate the Finance Minister for a “Jai Kisan, Jai Swasthya, Jai Bharat” Budget. It will foster inclusive growth and strengthen India’s competitiveness. The landmark announcement to create the world’s largest government-funded health care programme is path-breaking and the sharp focus on agri and food sectors will promote efficiency, increase productivity, enable efficient market linkages and raise farmer incomes. The thrust on rural development will create a virtuous circle of demand-consumption-investment led GDP growth. The larger allocation to food processing will add value to agriculture and help in creating large-scale livelihoods.
N Chandrasekaran, Chairman, Tata Sons
The key highlight of this Budget is that it reflects a timely and appropriate focus on rural India. While overall economic growth is recovering and running at 7 per cent, on the ground the most rapidly growing numbers are related to urban activity. As we enter a stage where rural demand is slowing, the focus on rural support will help sustain India’s long-term growth trajectory. Similarly, provisions to enhance farm price support, expand food processing, and liberalise agricultural exports are encouraging. On a different note, I am delighted to see the share of the Budget dedicated to health care increasing, with the National Health Protection Scheme, the world’s largest public health insurance initiative.
Pawan Munjal, CMD, Hero MotoCorp
It is a positive and progressive Budget. Finance Minister has paved the way for inclusive growth, with special focus on empowering farmers and boosting the rural economy. He has outlined significantly higher investment behind infrastructure, roads, railways, power connectivity and low cost affordable housing. The National Health Protection Scheme is a laudable step and the Budget is consistent with the recent landmark developments such as demonetisation and goods and services tax. The projected fiscal deficit of 3.3 per cent in 2018-19 is also a positive indicator. The plan to control stubble burning is a welcome move and will go a long way in controlling pollution in the National Capital Region.
Sanjay Nayar, CEO, KKR INDIA
The Budget gives a massive impetus to the farm and rural sectors. There is a continued focus on infrastructure financing, which comes on the back of a good performance in execution last year. The estimate for next year’s fiscal deficit is marginally higher at 3.3 per cent, which means the government is banking on growth. It would have been good to see more PPP (public-private partnership) as well as more structural reforms both in banking and the divestment strategy which could have contributed to the reduction of the fiscal deficit in the coming years. This is a good Budget in the context of an election year and attempts to address the farm sector, which hopefully could drive up consumption.
Kiran Mazumdar-Shaw, CMD, Biocon
The Finance Minister has looked at agricultural stress, rural infrastructure and covered most sectors. The biggest takeaway is that 500 million people will receive health cover. He has talked of 100 million families who will get an insurance cover of Rs 500,000. I am happy with the effort in revitalising our scientific institutions, Rs 30 billion for cyber research, artificial intelligence, cryptography and 5G technologies. Reducing the corporate tax to 25 per cent for micro small and medium enterprises is excellent. I wish larger corporates got similar benefits. Promoting cooperatives clustering for agriculture and looking at a vertically integrated approach will help firms in food processing.
Mihir Doshi, CEO, Credit Suisse India
Mihir Doshi, CEO, Credit Suisse India
Overall this is a balanced Budget, which is a positive sign, given that we are heading into an election year. With the deficit moving from 3.5 per cent for 2017-18 to 3.3 per cent for 2018-19, it’s a strong signal of the government’s continued focus on fiscal prudence. The long term capital gains tax is somewhat of a dampener as it will likely lead to near term outflow from equities, but we expect the impact to even out. The increase in the disinvestment target is a big positive and will help the government meet its fiscal deficit target. Meanwhile, investments in technology should continue to boost entrepreneurship. Whether the measures will drive growth will, as always, depend on the implementation and execution.
SN Subrahmanyan, CEO & MD, Larsen & Toubro
The fiscal deficit targets look realistic while fund flows into sectors like infrastructure remain supportive. Downside risks are mainly external, including among others, any sharp rise in crude oil prices above $60 per barrel, the attendant rise in current account deficit and pressure on exchange rates. An abrupt rise in developed countries’ interest rates is also a tail risk which would lead to capital outflow from bond and stock markets. Strong emphasis on job creation, better targeted rural development and poverty alleviation schemes, credible support to affordable housing and the continuing stress on infrastructure development constitute the core of the Budget exercise.