“Our demands have not been addressed, as they should have been,” chorused the retail fraternity of India while sharing their take on Budget 2008 with Indiaretailing.
Kishore Biyani, CEO, Future Group, says that if farmers and income tax payers are considered to be the two major interest groups in the country, this budget couldn’t have been any better. The government has waived off more than Rs 60,000 crore in rural loans and, in addition, announced enhanced spending for the rural economy. In addition, there is a decrease in CENVAT, central sales tax and excise duty on certain products. Biyani said, “As a retailer, we can hope to capture some part of the additional consumption that will generate from these measures.
“Our country is going through an unprecedented phase of growth and this was the time to make long-term decisions on how to sustain this rate of growth. But surprisingly enough, this budget does little about envisioning long-term growth plan for the economy and for various industries. While immediate benefits are clearly visible in the budget, one finds it hard to find long-term measures for new-economy businesses that are gaining momentum.”
Govind Shrikhande, chief executive, Shoppers’ Stop, said, “Issues like service tax on rentals and industry status have not been touched, but the finance minister has done well to address issues including CST and excise duty on certain items which, in the long run, will benefit the retailers. In all, it is a neutral budget.”
Aditya Birla Group:
Vikram Rao, business head, textiles and apparel, Aditya Birla Group, said, “Although the budget has received a positive response in a few sectors, on the textile export front, the budget is a little disappointing. The budget will dampen the exporters’ bottom-line as the finance minister did not announce anything to check the adverse impact of rupee appreciation.”
“On the domestic front, the reduction in service tax on rentals in retail would have been a welcome move,” he added.
Inder Dev Singh Musafir, director, M&B Footwear, also expressed his discomfort on the Budget, saying, “The finance minister has once again lost an opportunity to boost an industry that provides employment to the weaker section of the Indian population – the ‘aam aadmi’.
“By rationalising taxation on footwear, he could have helped in converting 80 per cent of the unorganised footwear industry into a tax-paying community, and, in turn, given a boost to tax collection.”
• Rs 60,000 crore debt waiver for farmers and tax relief for almost all individuals – no increase in duties and taxes – cheaper small cars and scooters and cornflakes – no increase in petrol prices – what more could one expect as handouts
• No shocks from new fringe benefit tax (FBT) charges
• Disappointment would be that there is no acceleration in timetable on CST reduction. Neither is there any speeding up of the goods and services tax regime
• The concerns are that there is no stimulus to investment, and besides the increase in capital gains tax, a one per cent add-on duty has been imposed on mobile phones
• Concerns about keeping India’s growth intact in a globally tough economy have not been addressed
• Overall, a budget that does not rock the boat – we expect it to be positive for retail, given more money in consumers’ hands and, therefore, more spending
Surinder Aggarwal, managing director, Vishal Retail, said, “We are somewhat happy, but the minister could have thought about minimising the service tax on rentals. This perhaps is the only major issue he has lost. Otherwise, we should congratulate him for coming up with a consumer-friendly budget.”
“It is quite a good budget, but the finance minister should have addressed the service tax issue. Otherwise, it is more or less satisfactory to note that he has touched the issues of FMCG and other consumer goods,” said, Munish Hemrajani, managing director, Big Apple.
Lalit Kumar, chief executive officer, Ebony, said, “It has been a good budget from the consumer’s point of view, but as an industry person, I am not happy. Our major demands have not been addressed.”
Samir Kuckreja, chief executive officer and managing director, Nirula’s , pointed out:
• We are happy with the reduction in CENVAT from 16 per cent to 14 per cent, though we were hoping this would be removed for confectionary items
• Reduction in excise on packaging will lead to a direct benefit
• Focus on the cold chain and cheaper refrigeration components will help develop this critical infrastructure for our industry
• The reduction in CST is welcome, but we were hoping that it would be removed
• The tax holiday to hotels in heritage sites will help develop tourism in these areas
• Overall, it is a balanced and growth-oriented budget with benefits for different sections of society
Nikhil Sen, head, strategy and international business, GHCL, said: “We are happy as the prevailing difficulties due to rupee appreciation have been addressed. The finance minister seems to have understood the importance of creating price stability. We are also happy to know that the government is concerned and will help in infrastructure development in the country.
“However, the ministry has missed out on several major issues that have annoyed the retail fraternity,” he added
– Ranjan Kaplish and Satrajit Sen