India Inc says bold reforms missing; FM constrained by state of economy
New Delhi: The Budget 2020-21 unveiled on Saturday drew mixed responses from India Inc, with a section of industry leaders saying "big bold" reforms needed to kick-start economic growth are missing while others acknowledged that the Finance Minister had "little room" to manoeuvre.
Nirmala Sitharaman presented the Budget woven around the themes of aspirational India, economic development for all and caring society.
"Although my immediate response to the budget was satisfactory, now that I've read the fine print, I must say I'm less optimistic about strong economic revival. In fact removal of exemptions n (sic) DDT will hurt individual tax payer and affect consumer spending. Why no export incentives?" Biocon CMD Kiran Mazumdar Shaw tweeted.
Expressing similar views, Dr Reddy's Laboratories Chairman Satish Reddy said, "the industry had high expectations of this Budget as it was seen to be an opportunity to announce big, bold reforms given the state of the economy. On that count, there is a degree of disappointment in some quarters as expectations have not been met".
Terming it as an "incremental Budget", Dabur India CEO Mohit Malhotra lauded steps taken to double farmers' income by 2022 and sops for people at the lower end of the spectrum which will enhance purchasing power of the consuming class in India.
"However, the big bold steps needed to restart economic growth are missing. That said, the fact remains that government had little room for manoeuvre," Malhotra said.
CII President Vikram Kirloskar defended the finance minister saying she had to walk the extremely tightrope, balancing a severely constrained fiscal space with the need for higher government expenditure for boosting investments and consumption.
"She has done that well in addressing the key priorities while being within the bounds of the Fiscal Responsibility and Budget Management (FRBM) Act," Kirloskar said.
Bharti Enterprises Founder and Chairman Sunil Bharti Mittal said the biggest takeaway for him was the call out from the Finance Minister that 'wealth creators will be respected'.
"This will be a massive boost to business confidence and entrepreneurship and a sign that we are serious about building a new India, where Corporate India and new age entrepreneurs will be stakeholders in growth," he added.
Vedanta Resources Executive Chairman Anil Agarwal said the government has chosen fiscal prudence over a massive spending programme. Now, its priority should be to efficiently finance and rapidly implement the National Infrastructure Pipeline worth Rs 102 lakh crore it has previously announced.
Similarly, Hinduja Group Co-Chairman Gopichand P Hinduja said,"given the hard constraints in the economy, the finance minister has done a creditable job at balancing the need for an economy in a revival mode and fiscal orthodoxy. The finance minister couldn't have been aggressive on either count."
The underlying theme of the slew of initiatives seems to be to reduce the cost of doing business in India, he added.
Spykar Lifestyles Sanjay Vakharia said, "the FY20 budget has delivered what best it possibly could. The industry had requested the government to bring in measures that would grow demand and spur consumption. But beside a few changes to the personal income tax rates, not much is seen impacting the demand and consumption story".
Vivek Gambhir, MD and CEO, Godrej Consumer Products said the expectations from this Budget were very high, and it has partially delivered against them. The positive is that it recognises that spurring consumption is clearly the need of the hour.
Ficci President Sangita Reddy said given the constraints that the finance minister 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.
DCM Shriram Chairman and Senior MD Ajay Shriram said it is a balanced budget which has tried to move the needle in different areas while maintaining the fiscal prudence.
While lauding the focus on leveraging technology and boosting transport infrastructure coupled with goals of reducing emissions, Alstom India and South Asia MD Alain Spohr said, "however, the government could have done more to promote localisation and Make in India."
Snapdeal CEO & Co-founder Kunal Bahl described the Budget as a thoughtful weaving together of specific proposals to tackle varied issues.
Boosting physical infrastructure, expanding digital connectivity and growing use of technology in government functioning are important building blocks for the long-term growth of the Indian economy, he said.
Walmart India President & CEO Krish Iyer said the Budget has unveiled the roadmap to Prime Minister's vision of $5 trillion economy by 2024-25 by reinvigorating the hopes of both urban and rural consumers.
Abans Group of Companies CMD Abhishek Bansal said simplification in the personal tax slabs is a welcome step for the public as it will add real money into their hands and probably kick start the economy through increased spending by retail consumers.
Havells India CMD Anil Rai Gupta said the Budget has managed to address some key issues around infrastructure spending, electrification, affordable housing that present significant business opportunity.