A recent survey conducted by industry body FICCI described the maiden budget of the Narendra Modi-led government as ‘pro-growth’, while expecting the government to push much-needed reforms to kickstart the investment cycle, create jobs and reinvigorate the economy. Salon India talked to the stalwarts to know their view on the budget.
Says Shahnaz Husain, CEO, Shahnaz Husain Group of Comapnies, “There were huge expectations from Budget 2014, as if the Government will wave a magic wand. But, at least, the Budget is forward thinking and certainly kindles hope that the economy will revive. The focus on boosting manufacturing and development of infrastructure gives out positive signals. Manufacturers will have the benefit of 15 per cent investment allowance, if they invest more than Rs25 crores in new plant and machinery. I think this will be an incentive to small manufacturers. I welcome the emphasis on development of skills in order to boost employment opportunities. I have always supported the importance of vocational training in relation to the beauty and wellness industries. Some basic customs duty has been reduced on certain items, which will bring down prices of soaps and cosmetics. And, we need to wait for the impact of the government’s intent to create a business friendly tax environment. Only time will tell.”
Nitin Passi, Director Sales, Lotus Herbals, opines, “For the beauty and wellness industry per se, there is an increase in the Income Tax exemption limit as well as an increase in deduction in u/s 80C as it will give more money in the hands of the tax payers. Reduction in customs duties on crude palm oil, glycerine as well as some industrial oils used in soaps and personal care products will reduce the cost of raw material. Negatives are that there has been no announcement with regard to curtailment of finished goods import from countries with which India has F.T.A. This is a contentious issue for the domestic manufacturing industry. However, overall I feel, it’s a positive budget for the beauty and wellness industry of India.”
Vandana Luthra, VLCC Founder & Vice-Chairperson, shares, “The Finance Minister deserves to be congratulated for presenting a growth-oriented and equitable Budget despite the challenges he had to face on account of the fiscal situation. The decision to raise the foreign direct investment (FDI) limits in the defense and insurance sectors, the incentives for the manufacturing sector, and his promise of a stable tax regime and targeted subsidies, will go a long way towards reviving industrial growth in India and encourage greater FDI inflows into the country. The setting up of a Fund for encouraging start-up enterprises will foster the spirit of entrepreneurship in this country. The changes in the personal income tax regime, on the PPF front, and on housing loan interest will benefit the common man.
“As a woman, I felt that this is the first Budget we have seen in a long time which had such an extensive focus on women and women empowerment. The launch of the ‘Beti Bachao Beti Parhao’ scheme, particularly, will help millions of girls to get educated and be in a position to shape their own futures. The FM has correctly understood that for India to progress, it is imperative that its women – who make up almost 50 per cent of the population – are provided every possible opportunity to realise their full potential. I feel that another heartening feature of this Budget was the focus accorded to skill development. The launch of a ‘Skill India’ mission, the decision to make the Apprenticeship Act more relevant to present industry needs and have Employment Exchanges function as Career Counseling Centers, besides the emphasis on training in the traditional crafts of India, is just what this country needs for being able to leverage its favourable demographic profile to achieve a quicker and more inclusive growth.”
Sunil Duggal, Chief Executive Officer, Dabur India Ltd is of the view that the Union Budget 2014-15 was going to be a tough balancing act for Finance Minister Arun Jaitley, given the precarious state that the Economy was in. And he has managed it well. Shares he, “With a plethora of announcements, be it in the form of further opening up FDI, promoting investments in Infrastructure and Health Care or proposals for poverty alleviation and rural development, the Finance Minister has taken positive steps that would not just boost overall confidence, but also go a long way in generating employment.
“His focus has been on empowering the Middle Class and particularly the emerging Middle Class, besides taking care of their health. Bringing cheer to individual taxpayers, Jaitley, in his maiden Budget, has raised the personal Income-Tax exemption limit to Rs2.5 lakh from the current Rs2 lakh. Besides, I-T exemption limit for senior citizens has been raised to Rs3 lakh. Also, the Investment limit under Section 80C has been hiked to Rs1.5 lakh from the current Rs1 lakh, while the housing loan interest rate deduction limit has been hiked to Rs2 Lakh. This would surely put more money and more savings in the hands of the common man and fuel consumerism.
“The new government seems committed to strengthen investor confidence. The minister’s assurances to not introduce any changes retrospectively, besides creating a mechanism to issue clarification on grey areas are investor friendly and would help spur growth.
It is also heartening to see that the new government is finally moving ahead with the introduction of the long-pending Goods & Services Tax (GST). GST — which aims to replace a series of existing taxes such as excise duty, service tax and value added tax — will go a long way in streamlining tax administration and result in higher tax collection for center and states. The government has announced its commitment towards introducing GST. According to independent estimates, it will provide a stimulus to the economy and could push economic growth up to 2 per cent.
“The government has reduced Excise Duty on machinery used in the manufacture of fruit juices and on packaging machinery from 10 per cent to 6 per cent. This is a positive step.
I also welcome Jaitley’s renewed focus on improving urban infrastructure, which has been languishing. Providing good infrastructure in urban areas including public transport, solid waste disposal, sewerage treatment and drinking water were mentioned as thrust areas for the new government.
“I am quite happy with the government continuing the rural focus and initiating steps not just towards poverty alleviation but also skill development for the rural populace. These initiatives would help improve their standards of living and ensure continued rural demand.”