India just announced its interim budget for the financial year 2019 – 2020 ahead of general elections. The budget is aimed at winning voters and brings tax breaks for middle class and help farmers by boosting the farm income. Narendra Modi, the Prime Minister of India, described the budget as the one for ‘New India’ and for all Indians. The interim budget brings relief for farmers where the government plans to offer farmers with less than two hectares of land with Rs 6,000 per year as a direct transfer under PM’s Kisan Samman Nidhi.
The government has also started a monthly pension of Rs 3,000 for workers in the unorganized sector while the salaried class get increase in tax limit from Rs 2.5 lakh to Rs 5 lakh per annum. The Tax Deducted at source (TDS) has also been increased from Rs 10,000 to Rs 40,000 while the TDS threshold on rent has been increased from Rs 1.8 lakh to Rs 2.4 lakh. The budget aims to bring cheers among the working class and farm community in the country and it also aims to bring positivism among the corporate entities. Here is how the industry reacted after Finance Minister Piyush Goyal finished with his presentation:
“The interim budget 2019 with its focus on the futuristic technology — artificial intelligence is a heartening news. We are at the cusp of technological disruption, a national program with the portal on Artificial Intelligence will bring India on the global map and help build an ecosystem to fuel its ambition to become a world leader in AI in the coming years. We at The IET are particularly happy as we are aligned with government’s focus on new technologies and will extend our full support through continuous efforts from The IET IoT Panel,” said Shekhar Sanyal, Director and Country Head of the IET.
“As the country modernizes, it is good to see that the budget has also looked at the welfare of the excluded segments. The 2% relief on interest for MSMEs registered under GST will encourage more microenterprises to register. The Shramyogi Mandhan pension for retired workers of the unorganized sector will bring better social justice. Often in our focus on the Agri sector, the need to support micro and marginalized unorganized businesses is forgotten. This budget has some initial provision for these sectors,” said Sanjay Sharma, Managing Director, Aye Finance.
“This budget stands out for the landmark announcement of Direct fund transfer to over 12 Crore farmers in addition to relaxation in Income tax slabs. These plans would place more cash in the hands of consumers at the bottom of the pyramid giving a significant boost to the overall consumption in the country. From the standpoint of government’s push for digitization and data analytics, a big positive in this year’s budget is the development of National Artificial Intelligence Portal which can help solve several issues around the five prioritized sectors. We believe that this initiative will further complement IndiaStack, IndiaChain, StartUp India and other similar initiatives spearheaded by the government vis-a-vis the start-up industry. The messaging also highlighted the government’s stance on MUDRA Yojana and Rs. 1 Crore loan within 59 minutes for GST-registered businesses. This will further bring the marginalized businesses under the fold of formal credit while also promoting GST adoption within the country. We hope that this year’s full-budget will also feature fintech collaborations with SIDBI and other government bodies for their facilitation,” said Amit Sachdev, CEO and CO-Founder, CoinTribe.
“We are pleased to hear that this year’s budget, and especially the Rs. 5-lakh tax exemption, exemption on home loans, and the income tax relaxation in rental income will ensure that more money stays within the pockets of taxpayers while pulling the right strings in the market. This will increase individual spending power and make sure that the financial circulation further intensifies within the country. The government has also taken several positive steps on the GST front, including Rs. 1 crore loan to GST-registered businesses, which will boost GST adoption and increase the indirect tax collections with positive effects on the business landscape as well. This year’s budget is nothing short of a masterstroke by the government,” said Manav Jeet, CEO & MD, Rubique.
“Today, more than 3 lakh Common Service Centres (CSCs) are employing over 12 lakh people and are delivering various digital services to Indian citizens. These Common Service Centres are now also expanding their services and creating the desired digital infrastructure in the villages, including connectivity, to convert the villages into Digital Villages. The Government will make 1 lakh villages into Digital Villages over next five years, which is in line with the Digital India Mission and a very positive development,” said Nischal Shetty- CEO & Founder, WazirX
“MUDRA Yojana has done a commendable work in providing credit to relatively smaller and aspiring entrepreneurs in India. We understand that the welfare schemes cannot be completely avoided as this is an election year, while the government also needs to stick to its Fiscal Deficit targets. So, the capacity of MUDRA couldn’t be increased as was being anticipated by the industry. However, it is the need of the hour to generate employment and provide a favorable atmosphere to the MSME sector. We hope that this area, alongside the implementation, will be looked into when the government announces its full budget later this year,” said Vivek Tiwari, MD & CEO, Satya MicroCapital.
“It is great to see that the interim budget is aimed at strengthening India’s backbone i.e., farmers, middle-class (salaried personnel) and the elderly citizens of our society. Not only, will it give them the extra income but, also drive consumption for the industry,” said Manish Sharma, President and CEO, Panasonic India; Co-chair, Electronics Committee, FICCI. “However, in the final budget we expect an exemption of basic customs duty on open cells (from 5% to 0%) to give the necessary thrust to the market, uplifting the overall sentiments thereby, resulting in an increased demand for Televisions (TVs). Further, it will help pave way for a larger roadmap for component-manufacturing ecosystem to be achieved through a phased manufacturing programme (PMP) for TVs, which in turn will help reinforce GoI’s larger, Make-in-India vision. TVs today, have moved from being an item of luxury to one of our necessities, hence, its affordability is a key. Therefore, in order to drive further penetration whilst progressing towards a manufacturing based economy, we urge GoI to lower the GST slabs for TVs (above 26 inches) and other energy efficient appliances,” he added.
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“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,” Harshil Mathur, Co-founder & CEO, Razorpay said in his post-budget reaction.
“We appreciate the budget’s recognition of India’s startup ecosystem’s contribution to the economy and the creation of a Digital India in Vision 2030 is indicative of the long road ahead for this ecosystem. The budget however, did not offer clarity on issues surrounding the angel tax much to the dismay of the industry’s expectations. Facilitating a conducive growth environment for such companies is key and hence, clarity around taxation and the regulatory environment will further help build a strong technology ecosystem which can contribute to the government’s vision of India as a $5 trillion economy over the next 5 years,” said Mitesh Shah, Head of Finance, BookMyShow.
Rajesh Agarwal, Co-Founder, Micromax, said, “We, at Micromax, respect and welcome the government’s budget reforms. This year’s Budget has brought significant changes, focusing on various key aspects which are largely stressed upon our overall economic growth – Rural, Agriculture, job creation, healthcare, housing, Structural reforms and infrastructure development, which will help stimulate and strengthen the Indian economy. The emphasis on establishing a programme to bring in direct efforts towards building a holistic ecosystem for Artificial Intelligence is an impressive development.”
“The announcement of National Artificial Intelligence portal is expected to propel India on the path of leveraging advanced and disruptive technologies for growth and economic prosperity and growth,” Dr. Subho Ray, President, IAMAI said.
“India will be a 10$ trillion economy in 10 years. Long term vision is important to achieve this. Digital, Data, Mobility and Artificial Intelligence will be the enabler for this growth. One Lakh digital villages will give a big boost to digital ecosystem. Mobile data consumption has increased over in 50 times in last 5 years. Emerging technologies like AI, Blockchain too will play a role in growth across sectors,” said Manish Jain, Partner, Digital and Fintech, Management Consulting, KPMG in India.
“This year’s Budget lays down progressive measures which, if implemented well, will certainly take economy onto a higher trajectory. The Budget is notable for its roadmap for 2030 focussing on ten dimensions which are key growth drivers of the Indian economy. This year’s Budget gives a reason for SMEs to cheer considering various incentives announced by government to propel their growth. Various tax benefits and thrust on ‘Make in India’ is a testimony to the government’s intent of encouraging entrepreneurship; enabling India to emerge as the startup hub where Job Seeker is now the Job Creator,” said Rohit Manglik, CEO of EduGorilla.