The Budget has set the stage for growth in the medium- to long-term, according to K Satish Reddy, Chairman of Dr Reddy’s Laboratories.
``The Budget is a clear one, with a focused growth trajectory for the next three-four years, broadly in line with the expectations of India Inc. The significant outlays on infrastructure of Rs 70,000 crore and power projects that will provide a much-needed additional 4k MW, are steps in the right direction towards revitalising the investment climate in the economy,’’ Reddy said in a statement.
While one needs to see the fine print of what this entails on the revision in the corporate tax structure, the announcement to implement the GST regime from April 2016 was a good step, along with the reduction in the inverted customs duty structure of 22 items.
One of the disappointing aspects of an otherwise good Budget, however, was, "the grossly inadequate" outlay of Rs 150 crore on a fund that was announced to fuel innovation. Much more could have been done in this area, especially from a pharma industry perspective, Reddy observed.
Terming the Budget disappointing since it assumed a questionable growth rate, Arvind Sethi, CEO, Tata Asset Management said the Budget relied too heavily on divestment to meet fiscal targets, and did not address the revenue deficit issue ``head on'' and left good things for the future.
Noting that just as the RBI has been `bullet proofing' the external balance sheet, ``we were hoping that the Finance Minister would take steps to do that for the Government's balance sheet''.
``From the rate cut point of view, the Budget is a little disappointing, because they have not dealt with some of the fundamental issues of revenue deficit and are still relying too much on divestment as the means of meeting the fiscal deficit. Inflation may continue to come down, but RBI may continue to go slow on rate cuts. We continue to expect a rate cut of a further 50 bps in 2015,'' Sethi said in a statement.
Ritesh Jain, CIO, Tata Asset Management added: ``The Government chose to spell out its thought process for the next four years through the Budget, amply evident via measures on simplifying the taxation structure, both corporate and individual, while removing exemptions; its strong stand on the parallel economy plaguing the country, and its clarity on GAAR, to name a few.''
Stating that there was some disappointment on the relaxation in immediate FY16 fiscal deficit target, ``it underlined the Government’s growth agenda, which is positive. Intent on curbing subsidies and leakages is the way forward.''
Jain said the bigger boost is accepting the Finance Commission recommendations, ``which enhances the states' share, and gives decentralisation a leg-up, a key positive for state-specific development for a large country like India. These are the key long-term positives.''
Ajay Shriram , President, CII: "This Budget was put together in a very logical manner while highlighting the challenges facing the Government. Proposed policy changes and simplification is positive, while the focus on social side through roads, affordable housing, establishing senior secondary schools and insurance coverage, is a move in the right direction."
Sumit Mazumder , President Designate, CII: "I'm glad there was no big bang announcement. The Minister has spoken about four years at a go and it's the right way to go. Particularly, I feel that the acknowledgement of easing PPP projects is the sovereign responsibility of the Government, which is a positive move. A multi-financing model for MSMEs, an integral part of the economy, was also a welcome announcement."