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Vikas Vasal
Partner,
Grant Thornton India LLP

A pragmatic budget with focus on infrastructure development, ease of doing business and strengthening of the rural economy. The budget lays down the roadmap for India becoming a USD 5 trillion economy over the next five years, with equal focus on overall human development through education and ease of living. 

On the tax front, there are proposals to provide certainty and clarity on some of the contentious tax issues including the ones for start-ups. There’s also focus on bringing in more transparency through digitisation and minimising human interaction between the taxpayers and authorities.

From the CEO's desk

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Vishesh C Chandiok
CEO,
Grant Thornton India LLP

The Finance Minister has kept the promise of simplification by refraining from introducing estate duty, and instead enhancing progressive taxation on the high income earners. It is great to see new focus on ‘soft power’ through programmes like ‘Study in India’.

The focus on women entrepreneurship, privatisation and inducing growth will surely propel India to become a USD 5 trillion economy by 2024-25.

 

Expert Take

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Saket Mehra
Partner,
Grant Thornton India LLP

autoandmanufacturing-budgeticon.png   Auto and manufacturing
     

The auto and manufacturing industry has been facing immense challenges in the past months. The push through the National Highways Development Project, dedicated freight corridors, and alternative infrastructure will induce demand for commercial vehicles in the mid to long term. Proposals to streamline NBFCs will act as key enablers to enhance credit and liquidity for the much-needed auto sector growth.

Impetus to start-ups facilitates linkages with auto OEMs and tier I component suppliers, which will encourage technology absorption and catalyse mobility transformation. Reduction of GST to 5% for EVs and tax exemptions on buying EVs along with setting up of plants for lithium storage batteries will push India towards recognition as a global manufacturing hub.

 
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Ravinder Reddy
Partner,
Grant Thornton India LLP

infrastructure-budgeticon.png   Infrastructure
     

Union Budget 2019 has placed a big thrust on the infrastructure industry by proposing a spend of INR 100 lakh crore in the next five years. Focus on railways, national highways, rural roads, stations modernisation, regional airports, i-ways, and affordable housing using public-private partnership shall lead to faster development and completion of projects. A number of measures are proposed to enhance the sources of capital for infrastructure financing, including the formation of a Credit Guarantee Enhancement Corporation in 2019-20. All these proposals will surely provide a boom to the industry.

 
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Kunal Sood
Partner,
Grant Thornton India LLP

foodandculture-budgeticon.png   Food and agriculture
     

The Finance Minister has set an ambitious economic growth target of propelling India to become a USD 5 trillion economy by 2025, and the scale at which the government is planning makes it a believable aim.

Several noteworthy incentives like leveraging the private sector for infrastructural investments in railways and waterways, improving the start-up ecosystem, mainstreaming traditional industries, promoting agri-entrepreneurs in rural sectors, and setting up 10,000 new FPOs are steps towards achieving the above economic outcome. Introduction of the Outcome Monitoring Measure for government schemes increases accountability and is a welcome move.

 
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Khushroo B. Panthaky
Director,
Grant Thornton Advisory Private Limited

financialservices-budgeticon.png   Financial services
     

The Union Budget focuses on the growth of the financial services sector to help India become a USD 5 trillion economy. This has been done by making policy changes to attract capital from domestic and foreign investors to enable its flow into both financial services and infrastructure sectors. This is proposed by increasing both the FDI cap in the insurance sector and the threshold limit for FPIs in listed equities, rationalising KYC norms for FPIs, merging the NRI PIS route with the FPI route, and introducing additional investment instruments for FPIs or retail investors.

The Budget has also sought to enhance tax incentives offered to units set up in IFSC, and has introduced a host of measures to boost digital payments in the country. PSU banks have been further capitalised by INR 70,000 crore, which will reduce the stress on capital adequacy. Further, positive measures have been initiated for NBFCs and HFCs.

 
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Ashish Gupta
Director,
Grant Thornton Advisory Private Limited

fmcg-budgeticon.png   FMCG, retail and e-commerce
     

The government has rightly recognised the need to reform the rent laws and regulations; this will eliminate any uncertainty on part of merchants and foster a sustainable trade environment. Relaxation of sourcing norms on FDI in the single brand retail is a welcome step. However, the government should also clarify issues faced by platform-based ecommerce operators to provide more choices to the consumers. Thrust on the start-up ecosystem will help e-commerce companies gather more capital for their operations.

 
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Amit Kumar Bajaj
Partner,
Grant Thornton India LLP

healthcare-budgeticon.png   Healthcare
     

The Budget has addressed expectations in the area of enhancing healthcare coverage to the Indian citizens through Ayushman Bharat. Consolidation of grants into the National Research Foundation will hopefully enhance medical research. The medical device industry will stand to gain on account of the reduced customs tariff and increase in the turnover threshold to INR 400 crore for the corporate tax rate of 25%.

 
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Neeraj Sharma
Director,
Grant Thornton Advisory Private Limited

realestate-budgeticon.png   Real estate
     

The Finance Minister has set an ambitious economic growth target of propelling India to become a $5 trillion economy by 2025, and the scale at which the government is planning makes it a believable aim.

Several noteworthy incentives like leveraging the private sector for infrastructural investments in railways and waterways, improving the start-up ecosystem, mainstreaming traditional industries, promoting agri-entrepreneurs in rural sectors, and setting up 10,000 new FPOs are steps towards achieving the above economic outcome. Introduction of the Outcome Monitoring Measure for government schemes increases accountability and is a welcome move.

 
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Raja Lahiri
Partner,
Grant Thornton India LLP

technologyandtelecom-budgeticon.png   Technology and telecom
     

The Budget enhances the government’s focus on Digital India and Startup India, newer technologies and higher education skills, which are key to achieving the growth ambitions of the country. The incentives for start-ups, including the much-anticipated relief on the issue of angel tax, benefits of carry forward of tax losses and the measures to promote digital payments including the TDS levy are a push in the right direction. The proposal to increase the minimum public shareholding benchmark may need to be carefully evaluated for tax implications, especially for some of the Indian technology listed companies.

 

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