The Union Minister for Finance, Corporate Affairs, Railways & Coal, Shri Piyush Goyal presented the Interim Budget 2019-20 in Parliament today, 01-02-2019. Here are highlights of the budget, followed by views and comments of various experts and representative voices of different stakeholders:
- Individual taxpayers with annual income of up to Rs 5 lakh will get full tax rebate
- Individuals with gross income up to Rs 6.5 lakh will not need to pay any tax if they make investments in provident funds and prescribed equities
- Standard deduction has been increased to Rs 50,000 from Rs 40,000
- TDS Limit Hiked From Rs 10,000 To Rs 40,000 On Post Office Savings
- No Tax On Notional Rent On Second Self-Occupied House
- Income Tax Relief On Notional Rent From Unsold Houses Extended To 2 years
- Capital expenditure – Rs 3.36,292 lakh crore
- Govt to focus on building physical & social infra for ease of living
- We are poised to become $5 trillion economy in the next 5 years
- FM announces all tax scrutiny to be done via Anonymous Digital Interface
- SMEs with earnings below INR 5 crore will soon file GST only once in 3 months
- Within next 2 yrs, all assessment of returns to be done electronically
- Direct tax: Tax collection up from Rs 6,38 lakh cr to Rs 12 lakh cr
- Railways to get ₹64,587 crore in FY20
- Defence budget crosses ₹3 trillion mark
- 2% interest subvention on MSME loans with ticket size of Rs 1 cr
- Govt projects now have to source 25% of their requirements from SMEs
- Government will set up a welfare development board to help implement development programmes for nomadic and semi-nomadic communities
- Pradhan Mantri Shram Yogi Mandhan, will provide assured monthly pension of Rs 3,000 with contribution of Rs 100 per month for workers in unorganized sector after 60 years of age
- Government proposes to launch a mega pension yojna, Beneficiaries will be provided assured pension of Rs 3,000 per month
- Increased tax-free gratuity from Rs 10 lakh to Rs 20 lakh
- Increased EPFO membership by 2 crore in last two years
- 2% interest subvention for farmers affected by severe natural calamities
- 2% interest subvention to farmers pursuing animal husbandry and fisheries
- Increased allocation for Rashtriya Gokul Mission to 750 crore in current year
- Rs 6,000 per annum to farmers holding land of up to 2 hectares
- 545000 villages open defecation free
- Government earmarked Rs 1.7 lakh crore in 2018-19 to ensure food for all
- Ayushman Bharat to provide medical treatment to nearly 50 crore people
IAMAI: Budget Will Promote Emerging Tech & Empower Startups
Dr. Subho Ray, President, The Internet & Mobile Association of India [IAMAI]: The announcement of National Artificial Intelligence portal is expected to propel India on the path of leveraging advanced and disruptive technologies for growth and economic prosperity and growth.The budget acknowledges the innovation taking place in the country, saying India was now the second-largest hub for startups in the world.
The Government’s vision to make 1 lakh villages into Digital Villages over next five years with the help of Common Service Centres (CSCs) is ambitious and will usher in the much needed digital revolution under the Digital India initiative, and will help in the last mile connectivity. This will also bridge the rural-urban digital divide, and will open avenues to jobs and employment creation. IAMAI has also welcomed the focus on clean energy and electric vehicles. IAMAI congratulates the government for this forward-looking budget.
—————-
Aegon Life Insurance: A fair budget for the market
Saibal Ghosh, Chief Investment Officer: Under the circumstances it appears to be a fair budget for the market. The bond market is bit circumspect on the underlying revenue assumptions to maintain the current fiscal deficit 3.4 % of GDP in next year as well. However equity market should be encouraged as there has been more than INR 1 lakh crore of direct and indirect benefits from the budget that will flow through to the consumers as increment to their disposable income which in turn should boost consumption. This is important as we are a consumer driven economy and consumption sector has been witnessing some weakness in demand last few months . On the housing sector some firm and sustainable incentives have been provided in this budget. This is the need of the hour as housing sector which has been reeling under tremendous stress for last few years has now reached to a point where it has started threatening to contagion in NBFC sector. There is no quick fix solution to this, but the steps taken in the budget to boost the housing sector is in the right direction for sure.
Overall, in this vote on account the market was looking forward to hear a statement on the strategy to be adopted by the current government if there were to come back to power , and it has been reassuring from that perspective.
———————
Angel Broking: Big boost to urban incomes and rural incomes
Amarjeet Maurya (AVP- Mid Caps, Angel Broking): “The budget has given a big boost to the urban incomes and rural incomes. For example, the increase in the taxable limit from Rs2.50 lakhs to Rs5 lakhs will be a boost for urban and semi-urban purchasing power. This is likely to be positive in terms of additional spending for sectors like FMCG, consumer durable goods and for automobiles.
The government decision to allocate Rs75,000 crore to 12 crore farmers for a minimum assured income of Rs6000 per year. This is likely to give a big boost to rural consumption again with positive implications for sectors like tractors, hybrid seeds, agri inputs, two wheelers, consumer goods etc.
There is a positive takeaway for the real estate sector. The abolition of tax on notional rent on second homes will incentivize people to now invest in second homes at a much aggressive rate. That is good for realty companies. Also the budget offers a special rebate to realty developers by allowing them to maintain 2 years inventory without showing notional rent as against 1 year inventory today.”
———————-
Kotak Mahindra Asset Management: How revenue side estimates will pan out
Lakshmi Iyer, Chief Investment Officer (Debt) & Head Products: The key focus among other things for bond markets was the fiscal math. While the fiscal deficit as % of GDP has been pegged at 3.4%, the gross borrowing program of INR7.10 lakh cr has spooked market sentiments. Market is also worried about how the revenue side estimates will actually pan out. Additionally, key to note is that 60% of net government supply in FY19 was cushioned by RBI OMO bond purchases. Uncertainty on how much would be the quantum of OMOs and will they actually be needed will be a uncertain sword hanging in the market.
For now we expect bond yields to remain at current elevated levels with sideways movement till MPC meeting slated for next week offers some clarity. Short duration funds are a better suited option for investors to participate in fixed income.’
—————–
CII: Budget all encompassing, has something for every class of the society
Piruz Khambatta, Chairman CII (Western Region): The interim budget has been presented with a positive outlook. The Budget announcements have largely taken care of the agriculture sector, middle income class and unorganized sector. The additional income for this population will lead to enhanced spending and higher economic growth. Fiscal deficit of 3.3% forecasted for 2018-19 has been revised upwards by 10 basis points. However, I think this is well managed given the incentives provided to the rural sector. On the agri front, direct income transfers to farmers having holdings of less than 2 hectares is a welcome move and help reduce risk to farmers. Social security contribution for workers in the unorganized sector is game changing. Last but not the least, full rebate for individuals earning income upto Rs.5 lakhs will boost purchasing power significantly. Overall, this budget is all encompassing and has something for every class of the society.
—————–
Turtlemint : Health insurance industry is going to get the much-needed push
Dhirendra Mahyavanshi, Co-Founder : We are glad to see one more forward-looking budget that has addressed quite a few concerns of the industry in general. The government’s sustained focus on healthcare initiatives, evidenced through more push to the Ayushman Bharat scheme, is going to create more awareness on the criticality of health insurance in the country and boost the industry. Together with the Pradhan Mantri Jan Aushadhi Kendra which has facilitated essential medicines, cardiac stents and knee implants at affordable prices to the poor and middle income groups, the scheme is set to change the direction of healthcare in India. Increased tax benefits and loan incentives for individual tax-payers is a highly welcome move, and we are hopeful that with an increase in the disposable income and increased awareness about health insurance, the industry is going to get the much-needed push that it has been waiting for.
——————
MalkansView: Tough time for traders to make money in short range movement
Vishal B Malkan, Founder, (MalkansView) and Technical Analyst: Nifty found it difficult to cross the psychological level of 11,000 on closing basis in today’s (01/02/19) trading session. This is in spite of the Vote on Account event, which saw Nifty back into the range of 11000-10600. Indeed a tough time for traders to make money in this short range movement. Clear view can only be given once markets move beyond this range, which is 11000 on the upside and 10600 on the downside. Even though Nifty is sideways, one can spot plenty of trading opportunities in individual stocks – especially those from the auto sector such as Tata Motors, Hero Moto Corp and Maruti.
—————–
AGS Transact Technologies: Penetration deeper into semi-urban & rural India
Ravi B. Goyal, Chairman & MD: Digital India being mentioned as one of the 10 pillars of the Government’s Vision 2030 is a welcome step for our industry. With urban India already adopting the Digital Inclusion, now the Government is penetrating deeper into semi-urban and rural India. The Government’s target to reach 1 lakh digital villages in the next 5 years is indeed encouraging and this will help in increasing the penetration levels of channels such as PoS, QR code and UPI and augur well for acquirers like us. The Government’s new initiatives for farmers namely PM Kisaan Samman Nidhi will result in more Direct Benefit Transfers for the banking system. The Government’s intent to deploy AI (Artificial Intelligence) in various priority areas will also help if leveraged in end-to-end cash and digital payment solutions and automation technology.
——————————
BSE: Growth-oriented budget benefitting various sections of the society
Ashishkumar Chauhan, MD & CEO: I congratulate the Finance Minister for delivering a growth-oriented budget benefitting various sections of the society and stating out the vision to make India a US$ 10 trillion economy, a daring and laudable move. Adherence to fiscal prudence despite providing benefits to the middle-class, farmers, and the unorganized sector will boost consumption, improve social security and ultimately revitalize the Indian economy, which bodes well for the capital markets as well.”
———————-
LTI (L&T Infotech): Vision for 2030 emphasizes digital technologies in transformations
Sanjay Jalona, CEO & MD: The continued support by the government on new age concepts such as AI that has the power to emerge as not only national assets but global disruptors is a huge trigger to further advancements in these fields. The role of such exponential technologies in driving the nation’s development is immense and provides a much-needed avenue to address and overcome pertinent age-old issues. Furthermore government’s vision for 2030 to place India as a modern, technology-driven, high growth and transparent society including leading the world in transport through electric vehicles and energy storage devices further emphasizes the role of digital technologies in transforming not only businesses but overall living standards.
———————
Razorpay: Focus is on digital inclusion for the rural economy
Harhil Mathur, Co-founder & CEO: We are glad to see the Government’s focus on digital inclusion for the rural economy. Commitments such as setting up 1 lakh digital villages in the next 5 years will go a long way in improving financial infrastructure and inclusion for these under-served geographies – we’re already witnessing the impact of few of the efforts taken. This is specially beneficial for companies which are focused on MSMEs and individuals.
One of the key highlights in this budget was the tax rebate for individuals. With reduced tax and higher disposable incomes, we see them spending more online as compared to the generation before. However, the Indian millennial is also concerned about wealth management and investments. And so, with a rise in disposable incomes, the adoption of mutual funds will rise in 2019, it will be interesting to watch how the Mutual Funds industry will influence the digital payment ecosystem this year.
——————–
FIS: Huge boost to middle class will increase digital banking
Ramaswamy Venkatachalam, Managing Director, India: The Union Budget 2019-20 has given a huge boost to middle class population of the country by providing tax rebate to individuals earning up to Rs5
lakh per annum. This will indeed persuade people to purchase more goods and services, which in turn will boost overall digital banking transactions. The government’s proposal to connect 1 lakh villages with digital services in
the next five years will definitely drive financial inclusion in the country and boost digital banking in the economy. The JAM (short for JanDhan-Aadhaar-Mobile) trinity is already making good progress, and with this move we are at the cusp of a digital revolution that will createopportunities for Fintech companies. We are already witnessing a surge in digital payments in urban areas, the trend is likely to expand in remote parts of the country through easy availability of data services. The government has also envisaged to create a Digital India reaching every
sector of the economy, every corner of the country and impacting the life of all Indians. We believe this budget has laid the foundation for the next digital uprising in the country.
—————————–
