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How India Inc Reacted to Budget 2019

The Indian equity markets recorded the best week of 2019 as the Modi government announced a slew of sops.

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India
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The Indian equity markets recorded the best week of 2019 as the Modi government announced a slew of sops to the rural economy, FMCG sector, real estate and the middle-class.

But has the ‘please-all budget’ hit the ball out of the park or has promises been made on a sticky wicket? Indian business leaders seem to be quite impressed, but welcomed the budget with a pinch of caution.

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A Good, Comprehensive Budget: Keki Mistry

CEO of HDFC Bank Keki Mistry, called it a comprehensive budget with a thrust on three crucial areas. Talking about the direct income support of Rs 6,000 to farmers with land holding up to two hectares, Mistry said, the move will increase consumption in rural areas. The probem of unsold inventory is also likely to be solved, aiding the real estate sector, Mistry added.

The increase in the tax exemption limit to Rs 5 lakh will result in more money to spend. This in turn spurs consumption or enables people to buy houses, thus benefiting both the consumption and the real estate sector, he said.

Monetise Assets to Raise Funds: Nilesh Shah

Managing Director of Kotak Asset Management Nilesh Shah, said, the budget is overall ‘political,’ but also good on the economic side. However, it is more important to raise resources to fund the expenditure, he added.

The way forward for the government is to monetise assets through divesting public sector enterprises strategically, Nilesh pointed out.

“Overall this budget aims to support the rural and urban consumption which allows higher utilisation of capacities, and this kicks the private investment cycle that has been restricted the last couple of years,” Nilesh said.

Fiscal Math Does Not Add Up: Saurabh Mukherjea

The smart pre-election budget, caters to the farmers through the PM Kisan Samman Nidhi and the informal workers through the pension scheme. Piyush Goyal who reiterated his commitment to fiscal consolidation, has pleased the bond markets as well.

However, Founder of Marcellus Investment Managers Saurabh Mukherjea said, the fiscal math does not add up, raising suspicion that the government is using off balance sheet measures to account for expenditures.

People’s Budget: FICCI, CII

Industry bodies FICCI and CII, welcomed the interim budget and called it a ‘people’s budget’ which will help the economy to grow, according to ANI.

Director of CII Banerjee hailed the budget and said, a lot has been done to help the farmers and the middle-class people, which will in turn spur the consumption.

The Federation of Indian Chambers of Commerce and Industry said, the budget will benefit at least 15 crore people, including 12 crore farmers and 3 crore salaried class.

Moody’s Red Flags Additional Expenditure

Rating agency Moody’s has warned the government of the continued fiscal slippage which might result due to its increased expenditure measures announced in the interim budget. The additional expenditure might hinder the fiscal deficit target, it said. India’s debt burden is a major cause for worry, which is not likely to diminish anytime soon, Moody’s added.

(With inputs from ANI)

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