February , 2021
Budget reactions
10:43 am

B.E. Bureau



Industry reactions


Hemant Kanoria

Chairman, Srei Infrastructure Finance Ltd


Pandemic had derailed the economy, but the Finance Minister has presented a practical, growth-oriented and capital-intensive budget. The big push provided to the infrastructure sector is very timely and is expected to create new employment and stimulate demand at the grassroots level. In particular, I welcome the announcements on the creation of a Development Financial Institution which will provide long-term funds for infrastructure projects and the decision to put in place a permanent institutional framework to facilitate market-making in the corporate bond market, a move aimed at enhancing secondary market liquidity thus paving the way for channelising arm's-length finance for long gestation projects. I congratulate the FM for putting growth before fiscal prudence in this budget.  



Sunil Kanoria

Vice Chairman, Srei Infrastructure Finance Ltd


With a significant step-up in the outlay for capital expenditure, the Finance Minister has laid out a grand vision for an infrastructure-driven economic recovery. In this budget, in her bid to mobilise resources for infrastructure, she has laid out blueprints for a Development Financial Institution, a special purpose vehicle for monetising public assets and a framework for infusing vibrancy in the corporate bond market. With the right incentives, these institutions would be able to attract a lot of capital, given the present abundance of low-yield liquidity globally. The decision to increase the FDI limit in the insurance sector must be backed up by relaxation of rules for insurance firms so that they can invest in infrastructure projects, the perfect fit for their long-term funds. The FM's announcement to create a Bad Bank type structure may encourage the banks to resume lending, but we must not relax on pursuing the banking sector reforms in order to obviate the need for such Bad Banks in future.


Sanjay Budhia

Managing Director, Patton International Ltd

To boost Global Champions in manufacturing, focus on value added manufacturing exports would help break the stagnation the export sector facing for last few years. Customs duty rationalisation for imports of raw materials would help boost value added exports. Going forward Customs Duty on basic raw materials should be brought to nil so that India can be exporter of finished products and be part of the Global Value Chain. The move to put in place revised customs duty structure from October 1, 2021 post review of more than 400 old exemptions is very much required and a step in the right direction.


Samantak Das

Chief Economist and Head of Research, JLL India

Given that the economy is well on its path to recovery, the budget 2021 has focused on enhancing expenditure while keeping the fiscal targets at bay in the short term. This Budget focuses on augmenting infrastructure with a special focus on expediting urban infrastructure projects which will act as a strong catalyst in driving real estate in urban areas. There is also a continued thrust on the agriculture sector which is likely to result in higher incomes and drive consumption. The proposed easing of restrictions on leverage by InvITs/REITs will attract more REITs listings and thus higher investments into real estate.  


Harsha V. Agarwal,

Director, Emami Ltd

The nation expected a budget balancing both the social and economic priorities of the country and the budget 2021 has delivered to its expectations. With key focus on building an Atmanirbhar Bharat, there are significant allocations for infrastructure building especially for rural India. The budget enhances allocation to agri-credit and also prioritises the agricultural and agri-allied sectors. All these measures are expected in generating an increase in rural consumption which is necessary for reviving the Indian economy.


Vikram Kirloskar

Vice Chairman, Toyota Kirloskar Motor

The emphasis on capital expenditure and infrastructure creation is sought to be largely realised through borrowing and asset monetisation without resorting to any significant increase in taxation. The privatisation of banks, the higher ceiling on foreign direct investment in the insurance sector, zero-coupon bonds for infrastructure, tackling the bank non-performing assets through a combination of an asset reconstruction company and an asset management company are all ideas that will stimulate growth. The budget makes a bold statement for a growth rate beyond Pre-Covid levels and renews government’s commitment to minimum government and maximum governance. From an auto industry perspective, the long-awaited voluntary Scrapping Policy can help take older vehicles off the roads thus contributing to lower fuel consumption, pollution as also generating additional demand for cleaner new vehicles.


Vinod Kumar Gupta

Managing Director, Dollar Industries Limited:

The focus of the Government in this budget was on expenditure wherein 34% is on capital infrastructure which in turn is going to generate employment. Even though the budget is focused on expenditure the fiscal deficit is kept below 10% which will be bought down to 4.5% in 2025. Core sectors like steel, cement, infrastructure, insurance and banks are big beneficiaries in the budget. The budget enables indigenous textile industry to become globally competitive. The announcement of the set-up of seven National Textile Park is one such step in that direction. There was no reduction or relief on personal taxation side, however, the good part is that we did not see levy of any additional cess.


D. Narain

Senior Bayer Representative, South Asia and Chief Executive Officer and Managing Director, Bayer Crop Science Ltd

Higher allocations for both healthcare and agriculture with specific focus on building public health infrastructure, expansion of credit to farmers, additional allocation for rural infrastructure and micro irrigation are welcome moves. These initiatives complement actions already initiated to double farmers’ incomes and enabling wider healthcare access for the nation. At Bayer, our vision has always been, ‘Health for all, hunger for none’. With India striving to become a $10 trillion economy by 2027, we believe a collaborative approach in agriculture and healthcare will help bring transformative changes in our society.


Madhavan Menon

Chairman and Managing Director, Thomas Cook (India) Ltd

While the six pillars of the budget presented a diversified approach to fundamentals, across health, capital, infrastructure, inclusive development, human capital and innovation, focus on the Travel and Tourism sector has been noticeably absent. We welcome the focus on transportation infrastructure that forms a crucial base for Inbound and Domestic Tourism - with the announcement of a `1.18 lakh crore outlay for the Ministry of Road Transport and Highways (proposed 3500 km corridor in Tamil Nadu, 1,100 km in Kerala, 675 km in West Bengal and 1300 km in Assam in the coming 3 years). From an aviation perspective the announcement of airport privatisation in tier II and III cities or towns will serve as a boon towards access and affordability. The creation of a hub and spoke model will serve to catalyse the government’s initiatives around Project UDAN and Regional Connectivity.


Anuj Puri

Chairman, ANAROCK Property Consultants

Healthcare got the highest priority in resource allocation and policy support including `64,180 crore outlay under PM Aatmanirbhar Swastha Bharat scheme. As anticipated, affordable housing and rental housing got a big boost with the government extending the period for extra deduction of `1.5 lakh available for loans up to March 31, 2022. This will keep demand buoyant for affordable housing in 2021 as well. Further, FY 2021-22 capital expenditure outlay at `5.54 lakh crore is ensuring the target of becoming a $5 trillion economy by 2025 is well on track. For the ‘Aam Aadmi,’ personal tax relief by way of tax rate cuts or favourably readjusted tax slabs topped demand and the FM failed to deliver on it. An upward revision in the deduction limit under Section 80C (at `1.5 lakh a year) was long overdue and increasing this limit would have increased disposable incomes, inevitably pushing up consumption. Post the pandemic, the chances of NPAs growing are significantly high. The Budget announced the setting up of ARCs to help banks to cushion the impact of the pandemic. Besides the setting up the long-awaited bad bank, the government will also infuse `20,000 crore into public sector banks as part of its recapitalisation plan.


Rakesh Goyal

Director, Probus Insurance

The announcement of hiking the permissible FDI limit from 49% to 74% in Insurance Companies and allowing foreign ownership and control with safeguards are the welcome move. Government’s commitment to come out with the initial public offering (IPO) of LIC will be keenly watched by the country in the next financial year. Government has also proposed to privatise one more general insurance company. All these steps announced by the government will provide capital for growth for the insurers and improve the insurance penetration and financial inclusion in the economy. The budget also says that to rationalise taxation of Ulips. It is proposed to allow tax exemption for maturity proceeds of the Ulips having annual premium up to `2.5 lakh. Further, in order to provide parity, the non-exempt Ulips shall be provided same concessional capital gains taxation regime as available to the mutual fund.


Rajesh Neelakanta

Executive Director and Chief Executive Officer of BVC Logistics

The logistics industry was looking forward to this year’s budget speech. We were expecting an update on the long-awaited ‘National Logistics Policy’. However there have been some hits and misses for us. Certain good points to look forward are reduction in timelines for reopening of assessments from six to three years. Businesses can now breathe relatively easy because of this announcement. Boost to infrastructure development by allowing TDS exemption for investments in to INVITs. Rationalising custom duties on gold and silver is a welcome move. The focus on logistics through the development of road and highway projects will encourage economic transformation and seek to improve connectivity that is much needed for the growing economy.


Ambrish Kumar

Founder of Zipaworld and Group Chief Executive Officer, AAA 2 Innovate Private Ltd. 

The stakeholders and players of the logistics sector would resonate with the fact that Budget 2021 has not completely met the expectations of the sector. It can be said that some of the initiatives like the public-private partnership projects of ports, monetisation of Dedicated Freight Corridor assets by railways, National Monetisation Pipeline for financing infrastructure construction, rationalising and reducing customs duty on certain imports scrap and products and increasing for exports of agricultural products - are in lines with encouraging manufacturing, distribution or Make in India initiative. However, some expectations like an investment in technology, speeding up of National Logistics Policy measures, promoting Start-ups and MSMEs, working capital influx for the logistics sector etc. that form the major concern of the logistics sector are not focussed upon.


Jay Rathod

Founder, Koffeetech Communications

After a tough year witnessed by all marketers and brands, the pandemic compelled each one of us to think on our feet. The Budget for FY 2021-22 has raised high hopes with the initiative to boost the digital transactions, allocating `1,500 crore for a proposed scheme that will provide financial incentive fuelling digital mode of payment. This proposal will help in wider adoption of online payment methods contributing to growth of the digital marketing industry.


Chamber reaction

ASSOCHAM (put logo – for the designer)

Finance Minister Mrs Nirmala Sitharaman gave a booster dose to the economy through six pillars of mega rise in capital expenditure on healthcare, physical infrastructure without putting much pressure on the taxpayers. A huge 137% increase in outlay for healthcare with specific `35,000 crore for Covid-19 vaccine rollout, a courageous asset monetisation programme along with strategic disinvestment including two banks stand out as defining features of the budget for 2021-22. There is a big emphasis on capital expenditure on building key infrastructure both in the rural and urban parts of the city. There has also been big time focus on highways, better connectivity to ports through roads and rail and bringing down cost of logistics to make Indian manufacturing competitive in the world. The mantra is to spend on quality infrastructure for faster economic recovery to a double-digit growth in 2021-22. 

The Budget has maintained the pathway to reforms with a crucial revision in FDI limit in the insurance sector to 74% from 49%. The budget has given a certainty and inspired confidence in entrepreneurship by retaining the fiscal incentives for the Start-ups and the Stand-Up India programme. The taxation front, the decision to limit the assessment - reopening to three years from six years reflects increasing trust between the taxpayers and the government. The focus on MSMEs with doubling of outlays for the sector and several regulatory and tax compliance reliefs would lead to ease of doing business for the small businesses. However, the government could consider replacement of proposed cess with raising more through disinvestment, the target for which may be raised in the wake of a healthy capital market.


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