Union Budget 2018: Mixed Reactions From Industry Honchos

As Finance Minister Arun Jaitley unveiled the Union Budget for FY 2018-19, It garnered mixed reactions from industry honchos. The budget addressed the key aspects of the economy with focus on education, agriculture, science, technology, rural economy, healthcare, MSME and infrastructure. Ease of doing business’ among MSME players was evident in the announcements made by FM Arun Jaitley. Arun Jaitley also lowered the corporate tax for small, micro and medium enterprises with turnover of up to Rs. 250 crore to 25 per cent from current 30 per cent.

Here are the industry expert views on the Union Budget 2018.

#1

“Union Budget 2018 is a mix for SME’s. Increased Wi fi connectivity across connects penetration of rural markets which is a good sign. Standard deduction of Rs 40,000 will actually reduce paperwork for companies, eliminates need for fraudulent claims and expands reach to non salaried class as well.  Budget also talked about Government financing EPF contribution for new employees. This will reducing manpower costs SMBs who are in the growth mode, and who normally employ first time job seekers. Increased outlay on mudra loans, along with easing of requirements for availing the financing under this scheme will go a long way in helping SMBs in getting the most coveted capital. Increased Airport outlay talked will hugely solve connectivity issues which will in turn be very beneficial for the SMB and SME’s. First reaction: The Finance team has tried to do a lot for the poor and the MSME by allocating big funds to schemes like the health schemes, the mudra loan schemes, the agriculture schemes, however what is going to be important is the execution, since that is where the success of the scheme is going to be. Doubling of outlay to the mudra scheme along with easing of complex requirements for availing the loan should go a long way in boosting the startups and SMBs growth story”

Sunita Maheshwari – Co Founder, StartUp Arena

#2

“The Budget has for the first time brought focus on bringing innovation to farm level application and consolidation of the food supply chain with market commanding prices for produce. The impact will be enormous if the simultaneous efforts are also initiated to do away archaic regulatory impediments that inhibit technologies to be brought to the farm sector. Overall, a game changing intention and well framed measures to bring Indian agriculture to global competitive levels”

K Vijayaraghavan, Chairman, Sathguru Management Consultants

#3

“While the implementation of some of financial tools like GST have been successful, the complete impact on GDP and controls can only be measured over a period of 1-2 years. The government has to provide alternate channels so that common people and entrepreneurs dont suffer. The revenue tools need to be better defined and not mixed with funding for MSMEs/SMEs/Start-ups”

Abhishek Kumar, Co Founder, Xoxoday

#4

“The government’s intent of promoting ‘ease of doing business’ among MSME players was evident in the announcements made by FM Arun Jaitley for MSMEs. With major focus on improving lending in the MSME sector, the government has announced a number of measures to ease the lending process and has also addressed to improve loan accessibility for MSMEs. The allocation of Rs 3 lakh crore for lending under Mudra will definitely boost the sector financially and help the MSME’s grow their businesses more efficiently. Further, reduction of the corporate tax to 25% for small companies with annual turnover of up to Rs. 250 crore is a master stroke and this will bring relief to about 90% of MSME players in India. The government has also proposed revamping the system of sanctioning of loans to SMEs by linking it with GSTN. This will immensely help MSMEs with better management of working capital and faster discounting of the bills. Bank recapitalization will enable the public sector banks to lend an additional credit of 5 lakh crore, thereby allowing more companies and MSMEs to access required business loans. The FM’s agenda to provide viable environment for FinTech companies to grow will further help bridge MSME lending gap. However, we had hoped for some more transformational reforms to boost the overall morale of MSME players. Some of the measures we expected the government to focus on are: New reforms or strengthen of existing MSME Development Act to address the issue of delayed payments faced by MSMEs. As per recent reports, a total of Rs. 10,000 crore is a collective pending payment towards MSME players”

R. Narayan, CEO Power2SME

#5

“The finance minister unveiled that 500 million poor and vulnerable citizens will get insurance cover of as much as Rs 5 lakh each under a National Health Protection Scheme. This insurance scheme is billed as world’s largest government-funded healthcare programme which would be an eye opener in the insurance industry and will welcome global insurance companies to invest in our country. The initiative will help make healthcare services accessible and affordable. There will be a rise in number of healthcare insurance companies who would need further support from healthcare outsourcing firms. With increased medical claims and billing amendments required, the role of healthcare KPOs becomes crucial. Also, it will help in the creation of jobs in the healthcare insurance sector to further add to employability ratio in the country”

Guruvayurappan PV, Senior VP & Head – HR,Omega Healthcare

#6

“The Union budget 2018 will pave the way for innovation and enable technology startups with the setting up of the Startup India hubs / clusters, doubling of the budgets for Digital India scheme and special policies for VC funds and angel investors. Leveraging the economy and spearheading an alternative investment regime will be key focus areas. We expect that this new environment will propel Indian startup science and put them on a platform to launch to higher orbits and uplift the whole country economically by solving social, infrastructure and business challenges by using technology as a tool and lever to empower the common man”

K Ramesh Kumar, Co-Founder, Hotify.AI

#7

“Smart City is “THE SOLUTION” to deal with massive population growth, rural to urban migration, and depleting city resources. I welcome the budget allocation for smart cities, and this should become the catalyst to transform our cities. However this focus for smart cities should not be just for once, but continuous.With increased government focus, we should look forward for more advanced technological innovations in the area of smart city implementation. Usage of Artificial AI to control urban management systems, including traffic lights and emergency dispatch of all services. Real-time data analysis of the traffic would enable the city authorities to plan better city traffic management”

Amit Singh, Co Founder and Smart City Expert, Yitsol Technologies

#8

“Government of India is strengthening its digital presence to increase efficiency and transparency in the way citizen-centric services are provided which would require huge investments in IT. We see a lot of business opportunities in the Education and the Health sector this year as the government has increased digital intensity in education and taken healthcare to the new aspirational level with the flagship National Health Protection Scheme or Modi Care. The government has also reduced the tax rate to 25% for companies with a turnover of Rs. 250 crore, empowering medium-sized companies to make large investments in hiring and innovations and become a part of the Digital India movement. These new digital initiatives would require support from players like us to drive the vision into reality”

Niranjan Chintam, Chairman & Whole-time Director, Kellton Tech

#9

“Budget for year 2018-19 presented today has focused majorly on boosting agriculture Sector, Healthcare and Education sector. Government has also given an uplift to Real estate Sector in affordable Housing sector by announcing the initiative of setting up a dedicated fund as ‘AFFORDABLE HOUSING FUND’. This will help in fulfilling the country need. However, it was also expected that in this budget the sector would have got the industry status as awaited from past one year and benefits to new home buyers may be through relaxing the Tax slabs/Tax benefits to developers. However, we welcome Budget 2018-19”

Abhishek Singh, Chief Operations, Paarth Infrabuild Pvt Ltd

#10

“It is a progressive budget as it focuses on infrastructure and healthcare. The budget allocation for 10 Cr poor families and 50 Cr beneficiaries is greatly appreciated especially. We hope that the boost to the rural economy will enhance the purchasing power of the people thereby having a direct effect on the economy, as a whole. We are confident that the funds allotted towards the AYUSH sector this year will help us in bringing out cost-effective Ayurvedic products to our consumers, and the funds allocated for the expansion and upgradation of Ayush institutions will aid us in leveraging Research & Development to the fullest, enabling us to meet the demands and dynamics of the market. Moreover, the government’s ongoing initiatives of organizing regular AYUSH fairs and exhibitions will benefit the market by creating public awareness about the efficacy of the AYUSH systems”

Pradeep Cholayil, Chairman & Managing Director, Cholayil Private Limited

#11

“The Financial Minister has remained focused on fiscal prudence even after announcing few popular measures like free health insurance and actions to increase farming income. FM has considered everyone starting from the bottom of the pyramid to the president of India, however, seems to have a forgotten person in between which is typical middle class. Almost no practical benefits for the typical service class which is the largest customer in the retail industry. Few of the actions like LTCG may be sentiment dampener. In all this budget has missed a big opportunity post demonetization and GST to take steps to encourage consumption”

Sharad Venkta, MD & CEO, Toonz Retail

#12

“The budget will spell a turnaround for the startup ecosystem. The slew of initiatives such as  lower corporate rate for small enterprises, the increased turnover limit under Presumptive taxation scheme under section 44AD of the Income Tax Act for assessees in MSME category will go a long way in giving a fillip to startups”

Rohit Manglik, CEO, EduGorilla

#13

“We are very happy that the government has kept fiscal discipline intact and continued structural reforms for long term benefits. We welcome the overall budget 2018-19 and appreciate the efforts of the government for refactoring MSP, idea of gramin rural market agencies, extenstion of Kisan credit to fisheries and for animal husbandry etc. Its definetly a pro-agriculture Budget this time. The move of encouraging organizations engaged in farm produce business is very positive, and will in turn aide farmers. However, with respect to the MSP government have to clarify the definition of cost of production, and if it is in line with Directorate of Economics and Statistics definition from A1 to C2.  We strongly believe that government will definitely come with ways of increasing farmer’s retail income as a higher percent of final retail value. Additionally, there was no mention of reduction in GST for farm inputs like pesticide, fertilizers, fuel and farm mechanization products etc. No details were given on the measures taken for agricultural  infrastructure like dams, cannals and irrigation infrastructure to reduce farmers’ dependence on rains. We welcome governtment’s measure taken for micro irrigation but  attention is required on tarditional irrigation system as well. Lastly, the focus also should be laid on educating the farmers with the better package of practices, technological advancements through Panchayat level on-site education system. With continued focus on agricultre, government will surely achieve its goal of doubling farmer’s income in near future. We highly appreciate government’s emphasis on generating higher incomes for farmers, by helping them produce more with lesser costs involved”

Ravindra Agrawal, MD and Promoter, KisanKraft

#14

“I believe the government is failing to understand that cryptocurrencies are not about speculation and trading but there’s much more to it. Many cryptocurrencies like Cashaa & Ethereum have a strong use case especially for developing economies like India. Government is presently in a state where they don’t know what exactly is the right decision and approach towards regulating cryptocurrency. It has to be a dynamic approach and will change according to how markets adopt it. GST can be taken as an example, it changed dynamically with the market response. The same thing will happen will cryptocurrencies, the present stand might be little harsh just for the stake of counterfeiting scams and illegal trades but gradually it will slow down towards a better approach. As our government and Prime Minister is very futuristic towards technology and would always encourage technologies that will push humanity forward. The use cases of Blockchain are not just limited to cryptocurrencies but a lot more than that can be achieved. It is just the beginning, moving of land records into blockchain could save million dollar scams and bribes. The system can be made more deterministic and optimized. Our very own digital identity Aadhar can be brought into blockchain which will open up a completely new shift in the technology world, Auxesis Group’s Auxledger with over 50 million people is an outstanding example for using blockchain technology for digital ID. Digital identity of users will kickstart a new ecosystem in blockchain based solutions, many use cases like profile scoring of individuals based on karma points can also be done”

Kumar Gaurav, Founder & CEO, Cashaa

#15

“The budget was contrary to people’s expectations of being a populist budget as this is the last budget by the Modi Government before the elections in 2019. However, I personally feel that it is a good budget that has taken agriculture and rural areas into focus for economic development of the country. Real Estate as a sector was left out. However, this budget also took one step towards granting real estate sector an industry status by setting up an Affordable Housing Fund. This effort will help realize the ‘Housing For All by 2022’ vision of our Honorable Prime Minister and slowly but surely grant the real estate sector an industry status. The Finance Minister also mentioned about reducing the hardships faced in realty deals and addressed the anomaly under Section 43 CA to tax real estate transactions at their real value rather than the value arrived at by applying artificially higher circle rates. As per new announcement, if the circle rate does not exceed 5% of transaction value, no adjustment is required towards the capital gains on a real estate transaction. It will help in terms of some extra savings if there is parity between the market rates and the ready-reckoner rates. The five percent differential allowed from the ready reckoner rates will benefit the buyers at large. I feel that this is the right time for buyers who want to buy properties like these”

Pakshal Sanghvi, Director, Sanghvi Realty

#16

“This pre-election budget focuses on rural areas and doesn’t have much for the middle class and urban residents; Long Term Capital Gains will bite investors, phones and electronics will become more expensive, and a reading of the finer print shows that it even the few benefits such as the 40K deduction and drop in fuel excise duty don’t hold up; The 40K standard deduction is in lieu of removed allowances and the two rupee cut in fuel excise duty was compensated by a 2 rupee increase in road cess”

Anurag Bhatia, Founder and CEO of Minance

#17

“Tourism is a significant employment generator and forms a big part of the global economy as well. The Union Budget for 2018-19 clearly indicates that Govt. targets to hit the bulls eye in Global economy by boosting travel and tourism. E-Visas have definitely made it easier to travel to India. The facility which was started in December 2016 was available for 161 countries and now expanding e-visa to more countries is a positive move in further growth of this sector. GST exemption for outbound tour and travel services, rationalizing the GST of hotel room rates for all segments would definitely revitalize the largest economy sector” 

Satyajeet Pradhan, Founder, trip n howl  

#18

“It is really encouraging to see that the government has laid strong emphasis on Healthcare by announcing the World’s Largest Health Protection Plan. We are confident that progressively, similar importance will be given to Home Healthcare which is fast becoming an important element in the health Management value chain”

Rajiv Mathur, Founder, Critical care Unified

#19

“The status of the legal framework around treatment of cryptocurrency remains as status Quo. The Finance Minister in his speech in budget today has just reiterated the earlier statements that cryptocurrency shall not be treated as legal tender and use of the same as payment system will  be eliminated.  Ambiguity of legal framework on buying and selling of crypto on various exchanges, from the perspective of exchange operations and from user perspective, still remains. Also, framework on treatment of mining of crypto currency has also not been touched upon. Further, whether indirect tax shall apply on buying and selling of cryptocurrency also remains unambiguous.”

Kanishk Agarwal, Founder, CriTaxCorp

#20

“This year’s budget emphasis on Startup India and Make in India campaign is a welcoming move by the government. A 25% Reduction in corporate tax for MSMEs with revenues upto Rs 250 crore is a good move and will further strengthen this segment. Introduction of additional business reforms under the Startup India program will further ease the journey of startups, and will boost investments in the overall ecosystem”

Neerav Jain, Founder & CEO, CityFurnish

#21

“The 7 Years time period is a welcome move but is less and should have been atleast 10 Years as that is the time a startup takes to build good profitability in today’s competitive market. A clear stand on Angel Tax would have been beneficial”

Puneet Gupta, Co-Founder & COO, icanstay.com

#22

“We welcome the Union budget which has given higher allocation of funds and resources towards improving the quality of education. Setting up additional 306 Kaushal Kendras is a decision in the right direction and will boost skill development at individual state level. It will also enable easier access to world-class skill training for Indian youth. The government has taken a bold step to set up a target of training 50 lakh youth of by 2020 under the National Apprenticeship scheme which shows the intent of this government towards promotion skill development at grass-root level. The emphasis on skill development, quality education and increasing the digital footprint in education are to be applauded. We hope that the allocations and measures taken will positively impact the employability of unskilled labour force in India”

Ashish Aggarwal, CMD, ThinkSkills Consulting

#23

“The entire nation awaited in anticipation as the Hon’ble Finance Minister, Shri Arun Jaitley announced the Union Budget 2018-19 in the Parliament today. Being the last budget to be presented by the current government before the 2019 national elections, it presented the tricky challenge of balancing the fiscal prudence and populist expectations. At a holistic level, it is evident that the Budget 2018 is a mixed bag, catering to each sector, largely focused on agriculture, education, healthcare, rural development and infrastructure improvements. On a nation front, this Budget introduced the world’s largest health scheme, and emphasized on empowering women and senior citizens with tax incentives. While a 10% tax was levied on long term capital gains on listed stock (albeit with grandfathering that gains accruing up to Jan 31st, 2018 will be not taxed), there is a slight cheer for the salaried class as the standard deduction up to Rs. 40,000 has been reintroduced. Further, the corporate tax rate has been reduced to 25% for companies whose turnover in the financial year 2016-17 does not exceed 250 crores, a move which will benefit 99% of the companies in the country. With a focus on all sectors Budget 2018-19 can be effectively called ‘A budget with something little for everyone”

Siddharth Surana, AM-Tax & Regulatory, K Vijayaraghavan & Associates LLP

#24

“Overall I think it’s a very ordinary budget. From a start-up perspective, it is slightly disappointing, as there was no clarity provided on Angel Tax, no clarity on discounts on marketing spending as CapEx or OpEx, no clarity on FDI in multi-brand e-commerce or single-brand e-commerce prerogatives.  The corporate tax rate cut of 25 percent to companies which have reported turnover of up to Rs 250 crore, is great for MSME’s. Overall for start-ups it was more of with condition apply budget, start-ups facing issue with Angel tax is not at all highlighted. Even for Retail, it was not that impactful, as GST multiple slabs still exist, governments say one market, one economy but nothing is one. We still have SGST+CGST and IGST on another side, so how can we claim it as one market”

Harsh Shah, Co-Founder, Fynd

#25

“The Finance Minister’s reinforced thrust on Digital India through measures like Wi-Fi Hotspots in rural areas will significantly increase internet penetration making India the largest internet enabled population in the world. Access to internet will create skilled jobs in rural areas, avoid migration, and increase reach of rural population to services (like insurance) available only in cities beyond reach.  Given the lack of enough public healthcare infrastructure, the proposal to launch a social security program with regards to public healthcare – the National Healthcare protection scheme that will support 50 Crore underprivileged with health financing is a welcome initiative that was long awaited. While the increase in the health insurance deduction is a great step, given the recent hike in health insurance premiums for senior citizens, from an Insurance industry’s standpoint, the budget has not been encouraging. We were expecting waiver of GST for senior citizen health insurance, tax sops for insurance products like home and term life insurance (extremely low on penetration) that provide super-essential and currently absent financial security to the middle-class population at large.”

Mahavir Chopra, Director – Health, Life & Strategic Initiatives, Coverfox

#26

“This budget set to play a key factor in stimulating the growth aspect of the digital advertising industry. Government’s decision of installing 5 lakh Wi-Fi hotspots in rural areas for easy internet access will help digital advertising in enhancing its reach even in rural areas. Speaking about the much-anticipated corporate tax, he said with 25% tax cut on companies with an annual turnover of 250 crores will be a crucial factor in fostering the growth rate of MSME’s (Micro Small Medium Enterprise).  Companies like ours will now be able to look further in the direction of expansion as the relaxation in tax slab is a huge relief for us”

Ashish Bahukhandi, Founder & CEO, Apps Discover Technologies

#27

“The Union Budget 2018 is a very inclusive and progressive budget for all of us. It is indeed heartening to see that major emphasis has been laid on improvising social security, healthcare and education for everyone down the pyramid.  We welcome the focus on strengthening the MSME sector in the form of capital support and interest subsidy. Investment in infrastructure would help strengthen the overall geographies of India and make it true to ease of living and doing business in the country”

Rahul Garg, CEO & Founder, Moglix

#28

“India has about 30 crore poor people who live below poverty line and with the National Healthcare Protection Program in place, the government has taken a great step in making quality healthcare accessible to the common man. With this universal healthcare scheme in place, the citizens of India will have easy access to standard treatment. With this budget, the government has brought in some of the much-needed tax reforms that will benefit the users and will, in turn, result in improving the insurance penetration. The increase in deductions under 80D of The Income Tax act for senior citizens from Rs. 30,000 to 50,000 is a welcome gesture. It would have been helpful if the limit had been increased for the individuals below 60 as well. It will help the financially weak who are worst hit at times of emergencies. But the budget didn’t bring any relief on the GST for health insurance which was another much-needed change as the current rate is very high resulting in health insurance being more expensive. For the insurance sector, the merging of United, National Assurance Company and Oriental India into a single entity is a very interesting development. The merger of PSU insurers is a positive step for the overall growth of the Industry with better efficiency. Consolidation will be beneficial reducing unhealthy competition and will also contribute to GDP growth of the country”

Varun Dua,​ Founder &​ CEO – ACKO


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