Industry Speaks on the Union Budget 2015
Arun Jaitley’s budget is an attempt at remaking India to match the aspirational streak of the nation’s young demography. As far as goodies for the common man are concerned, there was nothing much in the budget presented by the finance minister Arun Jaitley today.
Though Corporates must be happy there was Corporate Tax reduction from the current 30% to 25% in the next four years. We at Adgully caught up industry stalwarts to know what they had to say about the budget.
Anirudh Dhoot, Director, Videocon said, “The 2015 budget is a balanced one, setting long term goal for better economy by keeping fiscal deficit target 3.6% and implementation of GST from April 2016.”
He added, “The thrust has been given on infrastructure and social security. The postponement of GAAR is a positive relief and reduction in corporate tax form 30% to 25% in next four years will help industry to grow. Further thrust has been given on ‘Make in India’ where the basic custom duty on imported raw material has been reduced. This will boost assembly and value added manufacturing in the country. Reduction in the basic custom duty to zero from 10% on Back Light unit module used in LED panel manufacturing and Organic LED TV, also reducing duty on magnetron used in microwave oven are welcome steps.”
Sanjiv Bajaj, MD, Bajaj Capital Ltd. said, “We welcome a proposal of our finance Minister to increase tax deduction limit from 15,000/- to 25,000/- for self and family and from Rs20,000 to 30,000/- in case of Senior Citizens which we were requesting the Govt. in various forums. This will encourage all to have a required cover which we recommend to minimum 5 lacs to 10 lacs depending upon the family size and various other factors, so having exemption limit well within the premium paid, will give big relief to all citizens.”
He adds, “This is a move towards Social security system as we buy Health insurance not just for today but for life long and increase in exemption will give required tax relief and encourage all to buy SUFFICIENT Health cover for themselves.”
“Industry will be benefited too and improvement will happen not only in further penetration but also clients will get encouraged to upgrade their existing policies which otherwise gets obsolete. The clients will have an option to enjoy new age plans benefits by porting their existing polices,” he further added.
Rakesh Dugar, Chairman & Managing Director - Mitashi, a leading Indian homegrown consumer durables brand said, “Make in India and now ensuring employment to our youth, we have to make India the manufacturing hub of the world is a very good move announced in the budget presented by the Finance Minister Mr Arun Jaitley. Reduction in custom duty on raw materials and intermediaries is good for the sector.”
He further adds, “Introduction of GST from next year and delaying implementation of GAAR is positive for the business in India. The fast paced clearance for starting business in India will attract more investments to the country. The said National Skill Mission, to develop employability of youth below 25 years of age will address the existing gap of trained manpower. Introduction of a comprehensive bankruptcy code for the ease of doing business by 2015-16 is an encouraging one.”
Spokesperson of Amazon India said, “We are very encouraged by the commitment to implement GST by April 2016 and focus on development of infrastructure. We believe both are key to ease of doing business by enabling and streamlining the movement of goods and services. We believe this will enable us to effectively transform the lives of our customers, both, consumers and sellers. Customers can enjoy quick, easy, convenient access to a wide selection of products from across the country; and sellers, especially small and medium businesses, can grow profitably by serving customers across the country.”
Sushmita Balasubramaniam, VP, Media & Retail, IMRB International said, “The expectations from this budget for the retail sector are very high – on multiple fronts. Given that India is among the top five retail markets in the world in sheer economic value, accounts for close to 15% of the country’s GDP and is the second largest employer after the government, there is a need to assign it an industry status with strong policies in place. Also, considering the large numbers the sector employs and the kind of growth expected the current skill levels in the industry leave much to be desired. Skill development should be a critical focus area – to not only create more employment opportunities but also raise the standards of consumer experience. The consumer centric railway budget has paved the way for optimism for retail as well and one’s expectations about policies and initiatives that will benefit consumers have been raised.”
She adds, “There are also very strong expectations about Foreign Direct Investment (FDI) in retail – a point that has been highly debated in the past. We hope to move from the status of differential policies for different channels (currently multi brand & single brand) to having a policy that creates equal opportunities for all channels, including ecommerce. As per recent projections, India is slated to become the world’s fastest growing e-commerce market. Removal of barriers to FDI for ecommerce players will give consumers more value by stimulating competition between manufacturers and offer ease and comfort to consumers who will have access to a wide range of products and services even in remote locations. Again, the current governments’ positive stance on digitization raises hopes on this front.”
Bruce Gonsalves, VP, IMRB Kantar Worldpanel (FMCG sector) said, “With the gradual increase in the consumer confidence, we are seeing a small increase in the consumption of Fast Moving Consumer Goods in urban India. On the other hand, Rural India has actually declined. IMRB KWP’s Household Purchase Panel data shows that FMCG volumes have increased by 4% in 2014 in urban India but declined by 3% in rural India in the same period. If you benchmark against the inflation rate in 2014, the manufacturers are not even able to pass on inflation to the consumers. Consumers are still in the wait & watch mood – therefore this budget needs to give big relief to the consumers to get them to open their purse strings”
Preeti Reddy, SVP, IMRB One, IMRB International said, “Consumers in urban India, across socio-economic groups, are striving to move beyond necessities to affordable indulgence. They are experimenting, adopting new products, aspiring for more for themselves and their children. Yet sustained inflation is forcing them to tighten their belts. They are battling to maintain lifestyles and are adopting strategies to strike the balance between rising costs and rising aspirations – for example, they have reduced eating out, but are bringing the experience home by increased consumption of Ready-to-Eat foods.”
She added, “Rural India too has aspirations. But there has been negative growth in real rural wages this year – 45% lower NREGA allocation, a mere Rs 50 increase in MSP and lower construction activity. And, despite manufacturers’ focus on rural, rural consumption has not grown this year.”
“And yet, according to the RBI, consumer confidence in India has improved despite consumption stagnating. Consumers, therefore, are still hopeful that the promised growth and prosperity story will become a reality. The budget has to deliver on ensuring that there is more money in the consumers’ wallet and that their faith in the future of the Indian economy is not belied,” she went on to add.
Sahil Gilani, Director Marketing & Sales, Gits Foods Products Pvt. Ltd said, “Reduction of corporate tax is a welcome move. Glad to see concrete steps to curb black money, this will eventually boost consumer spending and clean up the system. In addition GST finally is on the horizon which will greatly ease businesses like ours that distribute products pan-India.” By Archit Ambekar | Twitter: @aambarchit