FICCI: focus on long term financing option for healthcare

 

With roughly 5.8 million Indians succumbing to heart and lung diseases, stroke, cancer and diabetes every year, the central government should focus on long term financing option for healthcare sector in the Union Budget 2019, Ficci has said in its pre-Budget memorandum 2019-20.

“The insurance industry has a long gestation period and it takes a long time to achieve a break-even. Accordingly, the limit of eight years for carry forward and set-off of business losses is not sufficient,” Ficci has said in its memorandum.

Also, a level-playing field is required for pension plans of life insurance companies vis-a-vis National Pension Scheme, it said. “It is recommended that pension plans of life insurance companies should also be given a level-playing tax treatment as compared to the pension schemes of central government.”

The Industry chamber has suggested that 30 per cent Income tax rates should be applied to individual earning over Rs 20 lakh per annum. Income tax exemption should be raised to Rs 200 per meal from the existing limit of Rs50. FICCI has also suggested that the central government slash the corporate tax rate to 25 per cent without the turnover condition citing that this will encourage economic growth and increase overall tax collections.

CII:

CII has recommended raising the income tax limit. The CII has also urged the government to raise the limit of deduction under section 80C from Rs. 150,000 to Rs. 250,000, to provide saving opportunities to the public at large. “Better demand conditions, settled GST implementation, capacity expansion from growing investments in infrastructure, continuing positive effects of reform policies and improved credit offtake especially in the services sector at 24 per cent will sustain the robust GDP growth in the range of 7.5 per cent in 2019,” CII Director General Chandrajit Banerjee said.

Financial Conditions Index for 3rd Quarter’ Economic Activity Index, External Financial Linkages and Cost  of  Funds  index  have shown an improvement in Q3FY2018-19 quarter vis-à-vis the last quarter while there has  been  a dramatic fall in  the  Funding  Liquidity  Index.  Overall, the CII-IBA Financial Conditions Index for Q3FY  2018-19 has registered 37.1which is below the optimism level. “Third quarter of CII-IBA Financial Condition Index expectations shows improvement in cost of funds index over the last quarter. Considering the challenges faced by the banking industry, the reading is giving a sense that things are improving for the banks. With economic indicators improving and credit growth in double-digits, going forward the FCI   reading   shows   significant   improvement” observed Mr.   V   G   Kannan, Chief Executive, IBA.

YES Bank’s Research: Fiscal consolidation to take a breather

Led by shortfall in GST collections, we expect fiscal slippage risks to materialize in FY19. However, the fiscal situation is unlike to deteriorate over FY18 as we expect the government to anchor headline deficit at 3.5% of GDP, the same as in FY18. We expect the path of fiscal consolidation to be reiterated with the government targeting a headline deficit of 3.3% of GDP in the upcoming FY20 Union Budget (Interim) on Feb 1.

We revise lower our FY19 GDP growth estimate to 7.2% from 7.3% earlier, and vis-à-vis 6.7% in FY18. While the recovery in FY19 growth is expected to be investment led, consumption could also find some support from the recent reduction in GST rates, correction in fuel prices, and focus on rural expenditure by the government ahead of the upcoming general election

While ongoing liquidity infusion by the RBI via scaled up OMO purchases has helped bonds, risk of fiscal slippage has weighed on sentiment. Taking comfort from the recent inflation trajectory, we expect the RBI’s MPC to revert to its ‘neutral’ policy stance in Feb-19 from ‘calibrated tightening’ currently. Possibility of MPC mulling over a 25 bps rate cut to partly address high level of prevailing real interest rates, cannot be ruled out. Anticipating fiscal slippage risks, we revise our Mar-19 10Y g-sec yield forecast to 7.5% from 7.1-7.2% earlier.

Despite the oil led reduction in trade deficit, INR has underperformed its EM peers in 2019 so far. Going forward, we continue to expect INR to trade in the 68-73 range until Dec-19.

BankBazaar: Encourage more investment in financial assets

Adhil Shetty, CEO: It is widely hoped that the government introduces changes that could help people save more and save better.

An increase in tax exemption limit under Section 80C to Rs2-2.5Lakh would be very welcome and encourage more investment in financial assets. The government should consider increasing the tax deduction limit for housing loans, especially for buyers in metropolitan cities. A doubling of the current limit of Rs2L to Rs4L will be favourable to many borrowers. Increase the tax exemption limit from Rs2.5 lakh. There is a steep jump from 5% to 20% for income between 5L to 10L. We expect some rationalization here. We hope the government revisits LTCG of 10% on gains of over Rs1,00,000 in a financial year and revise it upwards to benefit a growing number of small investors. The government could also explore a separate deduction for ELSS independent of 80C to encourage mutual fund investment.

Senior citizens are eligible for ₹10,000 of tax exemption under Section 80TTA, which hasn’t been revised for many years. If this limit can be increased, it would mean much to their financial independence.

This Union budget should include debt/hybrid funds under Section 80C.

We hope that this budget further strengthens the mandate of the Fintech Committee to make India the top Fintech innovation centre in the world by ensuring policy to fast track paperless and presence-less access to finance. We also hope that this budget would have initiatives aimed at driving digital adoption and awareness by creating customer incentives for online approvals of credit products similar to currently available online discounts for digital insurance policies.

AGS Transact Technologies: Take more steps for digitizing payment processes

Ravi B. Goyal, Chairman & MD: We feel that the government will take more steps towards digitizing the payment processes in the country. Having said, a lot of work has happened in the digital payment space over the past two years and the move is on the right direction. With increase in the penetration levels of channels like PoS, QR code and UPI, we believe that the merchants and the customers are more aligned to accept cashless payments. In Budget 2019, we expect policies to be framed to incentivize acquirers like us which will provide the underlying support towards the initiatives taken up by the Government.

IndiaLends: Push Digitization for More Financial Inclusion

Gaurav Chopra, Founder and CEO: We hope that the government brings more clarity in the e-KYC process. A policy framework and budget allocation, if placed, for the adoption of the Electronic National Automated Clearing House (e-NACH) and DigiLocker technologies can act as a catalyst in further helping the industry and consumers at large. This will also enable small value lending without excessive documentation and ease the lending process altogether.

The government should implement stricter laws and policies and conduct programs to spread awareness about the cyber threats and how to deal with them. We hope the government plans to allocate a budget for expansion of the Jan Dhan Yojana.

KisanKraft: Remove indirect taxes on agri inputs, machinery

Ravindra Agrawal, Managing Director: Policies implemented by the government to address farmer distress such as the DBT have been good for the agri industry and we are hopeful this budget will have more such positive ramifications on the nation’s farming community. Progressive measures such as removal of indirect taxes on agricultural inputs & machinery along with negation of processes such as APMC fees will have a direct impact in bringing down farmer costs.

With this Union Budget we are hopeful that structural changes such as allowing commercial farming by businesses will be announced that will help pave the way for model farming practices across the country. Removal of restrictions on sale/purchase of agricultural land as well as procurement/transport/sale of agri products across the states will be welcome. We are also looking forward to a new regulatory framework with this budget announcement that will enable better utilization of natural resources e.g. water management, unrestricted but transparent storage of agricultural commodities; macro level changes to infrastructure with a push on increasing canal coverage and number of weather stations to improve monsoon prediction, block level tracking of pests and diseases to avoid disasters amongst others.”

Policybazaar: Simplify consumer onboarding through Aadhaar based e-KYC
Alok Bansal, co-founder and CFO, Policybazaar.com :  Fintech ecosystem is hoping that the government will come to its rescue by introducing a legal provision, which skirts the 2018 apex court verdict prohibiting verification of consumer using the Aadhar route. The order has crippled the ability of fintechs to facilitate instant customer onboarding. Furthermore, the cost of customer acquisition will also increase if physical verification is mandated. The resulting cost burden will also affect the fintechs bottom-line adversely as they operate on wafer-thin margins.