Infrastructure, housing reforms in Budget boost spirits of India Inc

29 February, New Delhi

Finance Minister Arun Jaitley’s attempt to boost the rural economy, affordable housing and infrastructure got thumbs up from majority of India Inc, a few others remained apprehensive about the imposition of excise duty on jewellery products.

Here is businessmen said about Budget 2016-17:

Harshavardhan Neotia, president, Federation of Indian Chambers of Commerce and Industry

The finance minister has made a strong attempt to pump prime the rural economy and the infrastructure sector. This would yield dividends and we foresee a multiplier effect in the form of demand generation and employment creation over time. The state of the agriculture sector on account of two consecutive years of monsoon failure was precarious and it deserved the attention that was needed. Additionally, we see a lot of emphasis on affordable housing segment which will also result in forward and backward linkages and thus propel growth.

Sumit Mazumder, president, Confederation of Indian Industry

We believe that the focus on macroeconomic stability, boosting domestic demand and continued economic reforms would further cement Indias position as a haven of growth in a fragile global economy. Low-cost housing will be a huge demand multiplier, and CII welcomes the many initiatives on this.

Sunil Kanoria, Associated Chambers of Commerce and Industry of India.

Realising well the limitations brought in by slow demand and global slowdown, the budget has rightly put emphasis on creation of employment through Start-Up India and Skill Development. However, rationalisation of and simplification of tax rates would have benefited the overall ease of doing business, especially keeping in mind that GST implementation seems to have been pushed ahead.

Mahesh Gupta, president, PHD Chamber of Commerce and Industry

We are happy that our suggestion to increase deduction on exemption for income tax on interest paid on home loans has been partly accepted as there is an additional exemption of Rs.50,000 for housing loans up to Rs.35 lakh, provided cost of house is not above Rs.50 lakh which will give a boost to the real estate sector.

Moodys

Looking ahead, the 2016-17 budget target appears to recognize that pressures on the expenditure side are mounting, given the significant costs of funding government employee wages and benefits, as well as bank recapitalization costs.

Praveenshankar Pandya, chairman, Gems and Jewellery Export Promotion Council

We are apprehensive of the introduction of excise duty on jewellery products for the first time in several decades. In India, jewellery is largely produced by the SMEs and they are not equipped to follow the rigid compliance of excise norms. The imposition of excise would severely impact jewellery production in India resulting in loss of employment to the uneducated but skilled jewellery workers.

Pratik Agarwal, vice chairman, Sterlite Grid and director, infrastructure business at Vedanta Resources

The revised tax framework on Infrastructure Trust (InVit) will exempt Dividend Distribution Tax (DDT) in respect to distributions made by SPVs to the infrastructure trusts. Infrastructure trusts are one the most efficient vehicles to attract equity from long term investors like pension funds, insurance companies and other institutional investors. We feel that the amendment introduced in this budget will encourage developers to pursue their InvIT listing plans.

Sunil Duggal, CEO, Dabur India
I am quite happy with the government continuing the rural focus and looking at enhancing allocation to MNREGA (Mahatma Gandhi National Rural Guarantee Act), besides focusing on skill development for the rural populace. These initiatives would help promote entrepreneurship among the rural populace, add jobs and put more disposable income in the pockets of the rural consumer, improving their standards of living and ensuring continued rural demand for branded consumer goods.