Chennai: While the devil may be hiding in the details, the response from various industry officials to the FY24 Union Budget presented by Finance Minister Nirmala Sitharaman Wednesday was largely positive.
Here are the various reactions to the last full Budget before next year’s Lok Sabha elections.
* Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company
This is a ‘Bahubali’ Budget. With one arrow, multiple targets have been shot. Fiscal prudence is achieved with lower deficit and the path has been set till FY26. Consumption is supported through tax cuts. Investment outlay is enhanced. The Budget could have focussed more on asset monetization, but that can be pursued otherwise also depending upon market conditions. To sum up, it is a Bahubali budget.
* Yagnesh Dosshi, Co-Founder & Director, Raghnall Insurance Broking, and Risk Management Pvt Ltd.
We are disappointed with the Budget announcement regarding the taxation of insurance premiums, as it will impact the high-value savings products that have been relied on by many customers. This, combined with the lack of increase in tax exemptions for premiums paid under health insurance, will negatively impact the growth of both savings and health insurance in India.
* Vinod Aggarwal, President, SIAM, and MD & CEO, VECV
The 33 percent increase in capital outlay with an effective provision of Rs 13.7 lakh crore will spur growth in the economy, resulting in a positive impact on the automobile sector. The auto industry is fully aligned with the initiatives on sustainability and decarbonisation and increased focus on hydrogen, ethanol blending, bio-gas, electric vehicles and battery storage.
The announcement for funding various government departments for the replacement of old vehicles is also commended.
Another appreciable feature of the Budget is putting more money in the hands of individuals by lowering of effective personal income tax rates which should increase consumption and consequently lead to more demand.
All in all, this is a growth-oriented Budget with a positive impact on the auto sector.
* Murali Malayappan, CMD, Shriram Properties Ltd
The Budget strikes a balance between supporting growth via augmentation of productive spending while sticking to the path of fiscal consolidation. The Budget provides a lot of impetus for job creation, employment, and growth. Truly an ‘AMRIT KAAL’ Budget.
* Manish Raj Sinhania, President, FADA
The Modi Government’s last full budget has been populist in all aspects as it will help boost auto sales all around. While the capital outlay of Rs 10 lakh crore for infra spending will definitely aid commercial vehicle sales, the aim to scrap all old government vehicles by aiding the state governments will boost all segment sales.
Apart from this, the reduction in individual tax slabs will benefit the ailing entry-level two-wheeler and passenger vehicle segments.
The reduction in the highest tax surcharge from 37 percent to 25 percent will also benefit luxury vehicle sales. With a focus on electrification, relaxation of import duties on lithium-ion batteries will help in the price reduction of EVs, thus making them affordable for the masses.
* Motilal Oswal, MD & CEO, Motilal Oswal Financial Services
The Budget remains focused on long-term economic growth through capex and sops to boost consumption for the middle-income group. This would support strong corporate earnings with positive bias for sectors like infra, housing, cement, capital goods, auto and tourism. Despite the upcoming state elections, the government did not deliver a populist Budget and tried to maintain fiscal prudence.
* Christian de Guzman, Senior Vice President, Moody’s Investors Service
The narrower deficit forecast in the Union Budget 2023-24 underscores the government’s commitment to longer-term fiscal sustainability and supports the economy amid high inflation and a challenging global environment. Although changes to the tax regime will forego some tax revenue, the Budget predicts largely buoyant revenue on the back of strong nominal GDP growth and gains from the tax administration. This will help mitigate pressures on debt affordability from increasing debt servicing costs associated with rising interest rates.
At the same time, the Budget’s continued emphasis on capital expenditure suggests an ongoing improvement in the quality of spending. Although the gradual fiscal consolidation trend remains intact and will help stabilise the government’s debt burden relative to nominal GDP, the high debt burden and weak debt affordability remain key constraints that offset India’s fundamental strengths, including its high growth potential and deep domestic capital markets.
* S. Durgaprasad, Co-Founder, Director and Group CEO, Bahwan CyberTek Group
The political will to invest in people and research for technology-driven growth is clear. The announcement of three centres of Artificial Intelligence and 100 labs for 5G apps to nurture R&D in India with the vision to ‘Make AI in India’ and ‘Make AI work for India’ will further strengthen India’s position vis-a-vis its global counterparts.
The 30 Skill India international centres focused on emerging technologies, with a strong focus on on-the-job training, will contribute to the country’s expanding knowledge capital, positioning India as a strong digital contender.
The reduction of compliances to improve ease of doing business, the 33 percent hike in capital expenditure, along with the continuation of interest-free loans to the state government will catalyse economic growth providing job opportunities.
* Lalit Kumar, Partner, JSA Law Firm
The financial sector was among the seven priority sectors in Budget 2023-24. Year after year, the government has given impetus to the financial sector; and continuing with that commitment, big announcements were made in this year’s Budget as well. Financial inclusion is again the focus this year. Big boost to MSMEs with credit guarantee revamp scheme from April 1, 2023, with the allocation of Rs 9,000 crore. Resulting in the cost of the credit to reduce by 1 percent, a big relief for the current inflationary conditions.
Another key update is ‘public consultation’, for all financial sector regulations. need of the hour with various divergent regulations of several different regulators. This will ensure ease of compliance and business.
Derivative instruments will now become valid. Currently, under the Securities Contract Regulation Act, a contract in the derivative is a void contract. A big relief for mergers and acquisition transactions going forward. More powers to SEBI to award degrees, and diplomas for courses in securities market law.
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