February , 2020
Union Budget 2020 – Reactions
16:38 pm

B.E. Bureau

Industry Reactions


Anil Kumar Chaudhary, Chairman, SAIL

Government’s plan of massive investment on infrastructure projects will definitely boost steel consumption in the country, providing a momentum to the economy leading to the generation of job opportunities. Also, the steel industry will be directly benefited from the government’s renewed focus on investment in Indian Railways and plan to develop 100 new airports and piped water supply line.


Prathap C. Reddy, Chairman, Apollo Hospitals Group

A farsighted budget, it is commendable that the Finance Minister Nirmala Sitharaman has announced innovative initiatives that will enhance ease of living, improve the health quotient and boost opportunities for education and job creation, for all sections of our society and meet the expectations of an aspirational India. In the present day, an evolving healthcare ecosystem is being defined by new challenges. As the Finance Minister said, by 2030, India will have the largest working age population in the world and therefore, more than ever before, addressing Non-Communicable Diseases (NCDs) must be India’s immediate imperative as the prevalence of these diseases is being witnessed increasingly in the younger segment of our population. NCDs are responsible for two-thirds of the total morbidity burden and according to the World Economic Forum, by 2030, the world could lose over $30 trillion and about 36 million people could die every year due to NCDs if rapid remedial action is not taken up. In addition to the initiatives announced to improve access to medical care across the country and boost human health resources, it was encouraging that vital determinants of good health which include wellness, nutrition, clean drinking water and sanitation were at the forefront of this Budget. Likewise, the ‘Fit India’ programme championed by Prime Minister Narendra Modi indicates greater focus on fitness. We are hopeful that in the near future, a nationwide health screening programme for all citizens is initiated, which would empower every Indian with awareness about their health status and help them make lifestyle changes as needed. This is critical to prevent avoidable mortalities.

N. H. Bhansali, CEO, Finance, Strategy and Business Development and CFO, Emami Limited

Expectations from the Budget were not very high, in view of the fact that few important steps have already been taken by the government like the reduction in corporate tax prior to the budget. Looking at the current market scenario, where growth has slowed down, the focus is on stimulating growth rather than fiscal discipline. Accordingly, the Finance Minister Nirmala Sitharaman has announced many steps for furtherance of agriculture, commerce, industry, services and exports. Withdrawal of DDT and relaxation of FPI norms are welcome steps to boost investor confidence. This should also result into building consumer confidence gradually over a period of time. In the given circumstances, one could not have expected many relaxations affecting the exchequer. Therefore, in overall, this budget appears to be balanced with no big immediate impact on current state of economy.

Tea Industry

Arun Kumar Ray, Deputy Chairman, Tea Board of India

The Budget 2020 has met our sectoral demands while taking care of subsidy backlogs. We want equal shares of investment from private and government platforms instead of depending on 100% subsidy. Export market in India is very difficult. Depreciating rupee in India is also an advantage for the tea exporters. The last budget has also added 1% TDS on e-platforms. Our e-auction platform is also likely to be affected after this. We will have to examine this as it will affect the profit margin negatively.

Real estate

Sushil Mohta, Chairman, Merlin Group and President, CREDAI, West Bengal

We are happy to welcome the decision of extending the tax holiday for real estate developers to one year. But we expected tax holiday on units in SEZ to be extended up to 2025. However, affordable housing continues to be the focus of the government and the extension of Rs. 1.5 lakh tax benefit on interest paid on affordable housing loans bears testimony to it. However, there was no announcement on rental stock of properties. In developing countries like India, it is important to encourage rental stock of properties. The rental income earned by individuals as well as institutions is taxable. We at CREDAI had recommended 100% of the rental income up to Rs. 20 lakh per annum should be exempt from the payment of income tax. In India, 2% of the rural population is migrating to the cities every year. The new migrants cannot afford housing of their own and end up in slums. The scheme will promote rental housing for new settlers and limit slums. The tax structure will provide more income in the middle class which could lead to increased consumption in the residential sector.

Ramesh Nair, CEO and Country Head, JLL India

The Budget continues to focus on affordable housing and infrastructure, more specifically, urban infrastructure and logistics. However we do not see significant impact on the realty sector. Keeping in mind the limited fiscal room available to the Government, the focus of the Budget is to increase liquidity and enhance consumer demand through extension of benefits and simplification of personal income tax. Will provide a significant boost to student housing which is set on a higher growth trajectory. Private sector policy on data centre parks across the country. JLL estimates $4 billion investment opportunity for data centres.

Considering that a majority of home buyers fall in the lower and mid-income segments this tax benefit will boost demand substantially. It will significantly benefit first time home buyers who will enjoy the benefits of interest subvention under the CLSS scheme and the extended tax benefits. Time extension to claim 100% tax deduction on profits from affordable housing projects until March 2021 u/s 80IBA. This extension in the dateline will ensure continued interest of developers for the construction of affordable housing projects and help achieve the ‘Housing for All’ objective of the government. Abolition of Dividend Distribution Tax and 100% tax exemption for Sovereign Wealth Funds infrastructure investments with minimum lock-in of 3 years. Investments in logistics and warehousing to get boost.


Rajkiran Rai G., Union Bank of India (as reported to media)

The Budget has struck the right chord between enabling growth and managing fiscal deficit.

The government has shown a commitment to fiscal prudence while prioritising spending in capacity building infrastructure and enhancing purchasing ability at the bottom of pyramid. There is a deviation of 0.5% of GDP in fiscal deficit trajectory, as permissible under the FRMB Act. This is in line with expectations, given the slowing down of economy and disruption in revenues in the wake of taxation reforms, of late. New income tax regime envisages making rates progressive with income while rationalising exemptions. It helps address tax asymmetry across financial products, bringing banks’ fixed deposits at par with other financial alternatives for investors.


Sanjay Budhia, Managing Director, PATTON Group and Chairman, CII National Committee on Exports and Imports

Announcement of refunding digitally unabated taxes and duties on exports, such as electricity duty, cess on petroleum and mandi tax etc., not refunded through GST, is encouraging. Vision of each district as export hub will make all the difference with the help and support of State Government Export Credit Guarantee Scheme (NIRVIK) will help the lending process and enhance the credit availability to exporters. The insurance over guarantee will now cover up to 90 % of the principal and interest both on pre-and post-shipment credit. The ECGC currently provides such guarantee only up to 60% of the loss to the banks. The premium for the coverage will also get reduced thereby benefitting the MSME exporters. Announcement of new Logistics Policy is much needed and should be announced at the earliest. Check on unavoidable imports will help domestic manufacturing.

The major thrust on Infrastructure is the need of the hour. Announcement of 100 new airports by 2024, redevelopment of four railway stations, etc are the much needed steps. Announcement to create Investment Clearance Cell for end-to-end entrepreneurial facilitation, removal of dividend distribution tax for corporates, lowering of slabs for individual tax payers and decriminalisation for civil acts will help in restoring the trust deficit. Going forward we are awaiting the Foreign Trade Policy to be announced on April 1 and we would re-iterate:

Interest rate equalisation scheme be extended to all Exporters. Interest Equalisation should be made applicable for all Exporters and not only to MSMEs which will go a long way to increasing the competitiveness of Indian Exporters. The marketing support initiative of Ministry of Commerce is very small to support exports over $535 billion. We should create an Export Development Fund with a corpus of 0.5 % of country’s exports for helping the MSME exporters. The huge investment made in the tune of Rs. 4.75 lakh crore in Special Economic Zones is underutilised. Government should use these existing ready infrastructures for increasing the value of exports, which will make the dream of ‘Make in India’ into reality. It is suggested that a one-time 100% Income Tax payment exemption for a period of five years be provided and MAT be withdrawn at the earliest for all units operating in SEZs to mitigate the financial burden and give impetus to exporters to make further investments to expand or strengthen their existing operations.


Rajesh Neelakanta, ED & CEO of BVC Logistics

The focus on logistics through the development of 9000 km of economic corridors is a welcome move. It will encourage economic transformation and seek to improve connectivity. We look forward to the National Logistics Policy which will clarify the roles of the Union Government, State Governments and key regulators. We are keen to know about the e-logistics market as mentioned by FM. It will be interesting to see the thrust on agri-warehousing and proposal of running Self-Help Groups (SHG) in the villages to reduce logistics costs. We are hoping that the local economy will revive through the SHG. The initiative of investing Rs. 100 lakh crore in infrastructure will definitely have a positive impact on the nation’s logistics and transportation industry both from a business and connectivity perspective.

Chamber reactions

Ramesh Kumar Saraogi, President, Bharat Chamber of Commerce

Abolition of income tax on dividends in the hands of companies and passing on the liability to the recipients, added to 100% tax exemption on investments in infrastructure are the other positive features of the Budget to attract sovereign funds and foreign investments. Income tax exemptions to individuals in the middle income group are likely to stimulate consumption and create the much needed demand to some extent in the short-term. A number of schemes for consolidating the banking sector and the NBFCs have been announced. Scope for approaching the market by the public sector banks is a new facility that has been introduced.

Besides, the focus of the government towards the personal tax regime including additional interest deduction of Rs. 1.5 lakh for housing loans for affordable housing extended up to March 31, 2021, would be a support to the middle class aspirants for new homes. On the whole, within the constraints of resources, the Central Budget appears to be positive for economic growth, but it is difficult to visualise if the projected GDP growth of 6% - 6.5% projected in the Economic Survey would be accomplished.

B. B. Chatterjee, President, The Bengal Chamber of Commerce & Industry

The Budget provided tax stimulus by abolishing DDT to spur investments. It has given a subtle push to privatisation and set an ambitious disinvestment target with LIC IPO in focus. The proposed amendment in the Companies Act towards removal of criminal proceedings for civil actions is a welcome relief for corporates.

Remission of Duties & Taxes on Exports Products under Foreign Trade Policy and increased focus on exports insurance is likely to boost that sector. Again Warehousing & Cold Storage on PPP Model, Hospitals under PPP Mode augurs well for industry. Mobilisation of ECBs & FDI in Education Sector, creation of Investment Clearance Cell for end-to-end help to set up Industry including land banks, are also likely to boost Industry sentiment. As expected the government brings in Vivad Se Vishwas Scheme to further reduce Tax Disputes whereby there is exemption from interest and penalty for disputed cases where payment is made by March 31, 2020. However, capital expenditure growing at 20% and Fiscal Deficit targets under stretch will remain a concern for the economy.

Sajahan Biswas, President, The Oriental Chamber of Commerce

Allocation of fund in agricultural credit target of Rs. 15 lakh crore will boost up the rural economy and create demand for industrial product which generate greater productivity and enhance job opportunity. Allocation of fund in health sector 69000 crore and in Swachh Bharat Mission for Rs. 12300 crore will generate the employment. Proposal for export house in every district will identified the potentiality of the exportable goods which boost export trade as well as will stop migration of labour forces to other states. Announcement of Rs. 1.7 lakh crore provided for infrastructure in transport sector will boost the easy inter State movement of goods.

Announcement of debt restructuring policy for five lakh MSME sectors will avoid NPA is right direction. Custom duty raised on footwear and furniture will boost up the local industry. The reforms in tax proposal in all the sectors will encourage the investment. Turn over thresholds for audit raised to Rs. 5 crore from Rs. 1 crore will encourage the startup as well as boost the MSME sectors. The estimated fiscal deficit at 3.8% is challenging and difficulties for achieve when revised estimated expenditure is Rs. 26.99 lakh crore while receipt Rs. 19.32 lakh crore.

Vikram Kirlosakar, President, Confederation of Indian Industries

The Finance Minister had an extremely tight rope to walk, balancing a severely constrained fiscal space with the need for higher government expenditure for boosting investments and consumption. The announcements related to agriculture, especially encouraging states who adopt model laws, will pave the way for adoption of the much needed agri reforms, leading to better returns for the farmers as well as enhanced private sector engagement with agriculture.

Rs. 22,000 crore equity support to IIFCL and NIIF to create a funding pipeline of Rs. 103,000 lakh crore and granting 100% exemption to interest, dividend and capital gains income of the Sovereign Wealth Funds in respect of investment made in infrastructure are very important initiatives for funding infrastructure creation. The proposed national logistics policy and boost to electricity generation by extending the 15% corpo-rate tax option to the sector, will support the manufacturing initiatives. On the external front, reviewing Rules of Origin under various FTAs will address the issue of Indian Industry getting impacted due to imports getting routed FTA countries.

Sangita Reddy, President, Federation of Indian Chamber of Commerce and Industry (as reported to media)

Given the constraints that the Finance Minister Nirmala Sitharaman was facing, this has been a comprehensive statement. The government has done a commendable job and the various measures announced will strengthen India, individuals and industry. By invoking the deviation clause in FRBM Act and relaxing the fiscal deficit to 3.8% in the current year and targeting 3.5% in the next year, the government has underscored its resolve to support the economy at a time when it needs a fiscal boost.


Add new comment

Filtered HTML

  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <blockquote> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.