February 4, 2018
Some have called it a populist budget and some have hailed the push to agriculture and health sector. There are mixed reactions from industry experts from various sectors to the Union budget presented by Finance Minister Arun Jaitley. Here are some of the reactions:
Taranpreet Singh (Partner Tax regulatory services) at TASS for Personal tax/ individual tax wish list
“Post demonetization, a lot of surplus cash of common public is lying with banks yielding negligible/ low returns. The government should support the investment drive by increasing the limit of deduction under section 80C from the current limit of Rs. 150,000/- p.a to a higher range of around Rs. 250,000/-. Such increased investment can support specific investments in infrastructure and clean energy projects which is a key focus of the Government.
The dividend distribution tax (DDT) discourages companies from paying dividends, which dampens investor confidence. The DDT should be removed to improve investor sentiment.
The government should consider reducing GST rate on insurance policies from existing 18% to lower bracket. As India lacks in social security initiatives, possible reducing in GST impact on personal and medical insurance premiums shall boost the investment by the common man in the insurance sector.
Considering the steep increase in medical inflation, there is a great need to relook at the tax-free medical allowance exemption which has been stagnant since last several years at Rs. 15,000/- per annum. Given the overall household medical expense is far more than this limit, there is an urgent need to revise this limit to the higher bracket to at least Rs. 50,000/- per annum”.
Ameera Shah, Managing Director, Metropolis Healthcare limited
“Overall, this has been a pro-people and a pro-poor budget. For the first time, Universal Health Care has got the impetus it needs. I am quite happy with the government’s plan to introduce 24 new medical colleges. That is the only way to address the glaring lack of talent in the industry. The 1.5 lakh centres which will provide free essential drugs and diagnosis is a welcome move and a step towards boosting the Government’s National Health Policy. The flagship national healthcare protection scheme which will cover 10 crore, underprivileged families, is a highly commendable initiative. Through the budget, the government has definitely shown its interest in making healthcare more accessible and affordable through the Ayushman Bharat programme.
Another highlight of the budget has been the focus on fighting the ever-growing hazards of pollution from both crop burning, promotion of gas connection in houses using wood fire for cooking, among others. By not just talking about healthcare, but its indicators as well, the government is definitely on the right track towards improving the sector across the country.
We truly hope that going forward, the government also has plans for utilisation management, financial monitoring, audit mechanisms and accountability.”
Advait Gupt , Founder and CEO of Supari Studios
The budget announcement has sent out fairly mixed signals. While there has been no mention regarding any amendments to angel tax, the reduction in the corporate income tax rate is a consolation for startups and MSMEs. As for the digital sector, the focus on increasing investment in WiFi hotspots and WiFi in railway stations is a plus towards improving connectivity, however the higher duties on mobile devices could be an impediment since increase in the use of smart phones has been one of the key drivers towards the growth of our internet base..
Zefmo Media Pvt Ltd, A Startup
“Overall, the budget is a balanced one that is focused on the core sectors of agriculture and infrastructure. We applaud the Finance Minister’s initiative of proposing revamp of online loan sanctioning facility for MSMEs for prompt decision making by the banks. This budget is also very friendly for the digital ecosystem. Initiatives like doubling of the allocation of Digital India indicate the government’s continued focus on digital transformation.”- Irfan Khan, CEO, Zefmo Media Pvt Ltd.
“The budget is also encouraging to note further reduction of tax burden on MSMEs and push towards creation of a larger number of jobs. In addition, the announcement regarding the Government proposal regarding evolving a separate policy for the hybrid instruments for attracting foreign investments, especially for the startups and venture capital firms can give a major boost to the sector.” – Shudeep Majumdar, Director, Corporate Affairs, Zefmo Media Pvt Ltd
George Eapen, CEO & Director – Jehangir Hospital, Pune
Overall, it’s a populist budget that does not offer any encouragement to the healthcare industry. The 5 lakh of medical cover per family will be put under Rajiv Gandhi or similar scheme. This may not be cost-effective for super specialty hospitals due to high costs and overhead expenses. However, smaller hospitals will be benefitted and rural population will be happy as they will be covered better.
What is a miss is lack of tax benefit of equipment which will improve quality of care and outcome. There’s also no looking at healthcare trends and hence mention of cancer care or reduction of expensive chemo medicines and cancer care. This is impacting more and more families today.
Amit Nigam, CEO, BANKIT
Budget gives a big push to Indian Fintech market which poise to touch USD 2.4 billion by 2020 from the current USD 1.2 billion in the Financial Year (FY) 2016-17. The doubled allocation for Digital India programme of Rs.3073 crore in 2018-19 would also help the leading Fintech companies like BANKIT to reach out the untouched 40% population specially in rural India.
Prajit Nanu, Co-founder, InstaReM
The budget has proposed the creation of special hybrid instruments which would optimize taxation for foreign investors; this is very welcome development for the country’s start-up ecosystem. I also think that the start-up ecosystem would be eagerly waiting for clarity on giving angel investors similar vehicles towards reduced taxes or no taxes if they could roll over gains to the other start-ups. Most countries allow this as it keeps a perpetual line of early-stage funding open to start-ups.
The government has been proactive towards start-ups and the issues such as multiple regulatory approvals etc. need to be articulated soon with a focus on helping start-ups attract investments, optimize their cash flows and scale. This is very critical for the future if we want start-ups to be the backbone of our new economy.
Tejas Khoday – Co-Founder & CEO, FYERS (A new-age stockbroker which offers a unique thematic investing platform)
As the final budget of the NDA government, the focus on rural spending has been the theme but by and large, the government has not introduced any noteworthy changes which will boost economic activity. The corporate tax structure for MSMEs has been revised downwards to 25% but there is no change for large companies. This is contrary to what the Finance Minister had promised when the government came to power. Hence, the hope was that there will be a universal cut in corporate taxes for all companies. Essentially, the government has refrained from following the global trend of corporate tax reductions as being witnessed in the USA, the European Union, China, and other countries which will follow. This could potentially harm Indian companies competitiveness over the long-term.
Alankar Chandra, CEO, Wild Voyager.(a travel startup)
“Though the Budget did not have any special corpus earmarked for tourism, the development in ancillary sectors like aviation and infrastructure would increase the influx of inbound tourists. The measure to identify ten tourists spots as ‘iconic’ and upgrading 110 monuments is a welcome one.The budget also lays thrust on rural economy which will increase purchasing power among rural folk and indirectly give a fillip to travel,” said Mr. Alankar Chandra, CEO,Wild Voyager.