Industry reaction on Budget 2017
Mr. Rajeev Sharma, Head- Corporate Services & Strategic Planning, Mitsubishi Electric India Pvt. Ltd.
“The Union Budget is a fiscally prudent budget aimed at fiscal consolidation which should lead to a stable economic growth if implemented in a planned manner. Some announcements like a new metro rail policy, abolition of Foreign Investment Promotion Board are forward looking which will provide necessary policy impetus to investor sentiments. Selective reduction of corporate tax rate for companies below Rs 500 million turnover should be a game changer as far as corporate tax inclusion is considered since this will encourage higher compliance at the lower level of the corporate pyramid where percentage of tax leakages is usually much higher. We also welcome the government’s efforts and commitment to electrification program which mentions that 100% village electrification will be achieved by May 1, 2018.”
Mr. Anil Chaudhry, Country President and Managing Director, Schneider Electric India
“With India being the fifth largest energy consumer in the world, the country needs to make a concerted effort in promoting energy efficiency by reducing its dependence on fossil fuels and curtailing carbon footprints.
While access to energy is a basic human right, we need to make it sustainable. Today’s budget gave a clear indication of the government’s focus to achieve ‘sustainable energy for all’, with two of its critical steps; firstly, by providing a boost to rural electrification with a 25% increase in the outlay for key power schemes like Integrated Power Development Scheme and Deen Dayal Upadhyaya Gram Jyoti Yojna. This is expected to fast track the rural electrification drive of the Government, which is now planned to be completed by May 1, 2018. Secondly, by strengthening its focus on renewable energy forms with the inflow of another 20 GW in the next fiscal.
This however, will require investments in grid management and digitisation of the grid to ensure supply of quality reliable and safe power. It is important to stress that along with rural electrification, it is equally important to provide reliable and quality power which requires investments towards modernisation of the country’s transmission and distribution power networks and use of digitisation in grid management.”
Mr. Tilak Raj Seth, Head Mobility, Siemens Limited and CII Chairman, Rail Transportation & Equipment Division
“The industry was keen to see the representation the rail sector would get in this combined Budget, the first in independent India. The Finance Minister did a good job focusing on key and strategic measures for the railway sector. The increased Budget allocation to railways, focus on safety through the ‘Rail Sanraksha Kosh’, an enhancement of throughput are very welcome measures. Additional resources will come to the transport sector basis the announced measures of modifying the metro policy, PPP operation of tier two cities and through the ‘Multi Model Transport Approach’.”
Mr. Tulsi Tanti, CMD, Suzlon Group
This budget is expected to lead an inclusive growth with a clear focus to lift the rural economy and create the right infrastructure.
With a special mention about the drive towards 100% electrification, the renewable industry was hopeful that there would be an announcement to support the achievement of the Government’s RE target 175 GW, and long-term policy framework to achieve our INDCs and commitment made at COP-21 to reduce carbon emission to 30-35% by 2030.
On manufacturing front, It is indeed encouraging that India is now ranked sixth globally. The budget promises a very robust forex reserve, with resilient domestic market, further capitalisation of PSU banks, and launch of trade infrastructure for export scheme (TIES), can truly position the ‘Make in India’ apart from establishing the country as a global hub for engineering goods.
Mr. Prabhakar Jayakumar, Country Manager, DigitalOcean
“The Government’s announcement to allow eligible startups to avail their 3-year tax holiday in a block of 7 years as against the earlier 5 years is a useful one and should give further impetus to the Startup India initiative. Also, the intent to move towards a cashless economy and initiatives to strengthen the digital infrastructure augurs well for the ecosystem”
Vijay K Thadani, Vice Chairman & Managing Director, NIIT Ltd.
The Budget is directionally good in terms of its focus on quality. A specific statement on granting autonomy to higher education institutions based on performance shows that the government has its priorities right.
SWAYAM got a special mention as the latest digital initiative of the government. It shows the high priority that the government accords towards promoting technology-based learning.
A new initiative in higher education, announced by Mr. Jaitley, is setting of National Testing Agency which will handle all the entrance exams in higher education. This is a welcome step.
The additional focus on advanced skills development and preparing a global workforce through India International Skills Centres is a very welcome step. Moreover setting up of Digi Gaon will open new vistas for technology based education for our rural folks.
Kalpana Sampat, CEO, Swiss Re India Branch
“Increasing allocations for Fasal Bima Yojana and targeting greater insurance coverage is a positive move to close the protection gap in agriculture. A robust crop insurance framework is an important stepping stone towards food security and financial stability for farmers. Efficient irrigation is the need of the hour and the dedicated micro-irrigation fund is also a welcome move. Finally, the health action plan is an important acknowledgment that the country needs to improve access to health care.”
Jonathan Anchen, Head of Economic Research & Consulting, India, Swiss Re
“It is a balanced budget with several measures to ease the process of doing business. This will positively impact economic growth. The initiatives to incentivise manufacturing, clear red tape for foreign investment, institutionalise the dispute resolution mechanism for infrastructure projects, higher allocation for highways, etc, are very positive steps. The digital economy too will get a strong boost with high-speed broadband connectivity on optic fibers, and encouraging digital transactions.”
Vedamoorthy Namasivayam, Partner, Deloitte India
The overall budget proposal has to be viewed in the current macro-economic context and the 3 specific challenges 1) US Fed decision on interest rate 2) Future of Global Oil prices and 3) Implications of developed nations retreating on globalization. These 3 challenges create uncertainty which require some preparedness to deal with them and the budget proposal are responding to these requirements in a balanced way.
As we know low global oil prices in the last few years have helped our economy in terms of lower inflation and also more importantly in terms of revenue generation for Government. To deal with the above mentioned challenges the Finance Minister announced two important initiatives with regard Oil and Gas sector. He has proposed reduction of basic customs duty for imported LNG from current 5% to 2.5%. This will help to enhance the share of gas in our energy mix which is currently relatively low. Gas being the cleaner fossil fuel it will have beneficial impact on our environment as well as help boost the utilization of our stranded power assets.
The other significant announcement in the budget is related to National Oil Companies. His proposal is to restructure these companies to match the global companies in terms of its financial heft. Such a restructuring will not only help to enhance their value of stock in the market, it will also help them to mobilize future financial resources for their expansion and growth. Many of the large NOCs from other major countries are today listed in other international stock markets. Recently Saudi Aramco announced its plan for gradual listing to pave way for internationalization of Saudi economy. We need to wait for the detailed road map of the proposed restructuring to understand the fuller implications. The real challenge will be in terms of alignment of internal structure, staff and systems to get the necessary real synergy out of such consolidation.
Mr. Samit Choksi, Co-Founder of ThinkPhi (sustainable clean technology startup)
“The spend on infrastructure is a positive development and it can be further amplified by building green infrastructure. It will also be in line with Mr. Modi’s commitment at COP21. While Trump and the largest economy has reduced its commitment to the planet, India can take over from the US in leading the way towards building a sustainable future.”
