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India Inc hails ‘populist’ Budget, but says disappointed on tax front

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NEW DELHI: India Inc on Thursday welcomed the Union Budget 2018-19 — the last full budget of Finance Minister Arun Jaitley before the 2019 general elections — and praised the populist approach of focusing on infrastructure and rural India.


However, what came as disappointment for the industry was that the government did not provide any relief in the income tax rates for 2018-19, along with the imposition of long-term capital gains (LTCG) tax on equities exceeding Rs 1 lakh at 10 per cent.


Here is what the industry players have to say:


Sandeep Jajodia, President, Assocham: “Finance Minister Arun Jaitley has placed a huge emphasis on agriculture and rural India, allocating bulk of resources to interior landscape, while helping the middle class, salaried employees along with relief to senior citizens, measures which would boost consumer demand and help revive economic growth.”


Chanda Kochhar, MD and CEO, ICICI Bank: “The wide-ranging measures announced for various segments of the rural economy will boost income levels and create gainful and sustainable employment. This, in turn, will help increase consumption levels in the economy.”


Anshuman Magazine, Chairman, India and South East Asia, CBRE: “It is fair to say that this year’s budget is populist, focusing on providing social security at the grass-roots level. The various announcements and funding provided are towards promoting further growth of small-scale industries as well as improving infrastructure, particularly across rural India.”


Neeru Ahuja, Partner, Deloitte India: “On the taxation side, industry and individuals are a little disappointed that no significant tax relief has been provided in spite of increased compliance by taxpayers. Even the standard deduction given is in lieu of two other deductions that have been taken away.”


K Suresh, President, Association of National Exchanges Members of India: “While the tax (LTCG) will adversely affect serious investors funding the India Growth story, it won’t have any impact on short-term traders. Instead of introducing LTCG in its current form, the government could have done better by changing the tenure of this tax or given the corresponding benefit by re-introducing 88E to take the deduction of STT (Securities Transaction Tax)”


Joy Rankothge, Vice President, Credit Strategy, Moody’s Investors Service: “The direction of the fiscal deficit announced in the Budget is in line with our forecasts. The government continues to aim for a gradual narrowing of the central government deficit to 3.5 per cent and 3.3 per cent in fiscal 2018 and 2019. We expect that the fiscal deficit targets will be broadly achieved.


“This year’s divestments exceeding targets marks a break in a recent trend of missing ambitious targets. Moving forward, increased divestments could contribute to higher government revenues, greater efficiencies within state-owned enterprises and help reduce the government’s high debt burden.”


Manish Agarwal, Partner and Leader-Infrastructure, PwC India: “Rs 50 lakh crore for infrastructure is welcome as it reaffirms continued funding of various initiatives in roads, railways and urban infrastructure. Quantum leap in airport capacity is a key requirement to keep pace with the rapid growth in aviation. — IANS


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