Budget 2015 – Is it the beginning of ‘Achhe Din’ for the retail sector? Industry players evaluate it as a balanced budget that will fuel consumerism.
Krish Iyer, President & CEO, Walmart India
“Looking holistically, the Budget presented by the Finance Minister is reformist and growth oriented. The measures outlined in the budget for giving boost to the investment in infrastructure (Rail, Road, Freight Corridors, Energy etc.) will surely benefit the economy and the retail sector in the medium to long term. In addition, moving towards making India a ‘cashless society’ will help facilitate retail trade too.
Fiscal deficit at 3.9% of GDP vs. 4.1% for LY is a marginal improvement and reduction in interest rates may have to be calibrated more carefully.
The Government’s announcement about MUDRA bank with Rs. 20,000 crores corpus will give a significant boost to the SME sector and small entrepreneurs. In addition, proposal to establish ‘Unified National Agricultural market’ is a step in the direct direction, which will help farmers realize better prices. This coupled with the implementation of GST from next year will not only bring relief to the end consumer but also help the retail sector in a big way. The Government’s continued focus on ‘Ease of Doing Business’ will help the industry tremendously. I am sure this move will also encourage State Governments to bring in similar provisions and help in driving investment-led growth.”
Sunil Duggal, Chief Executive Officer, Dabur India Ltd.
“Finance Minister Arun Jaitley has presented an inclusive and balanced Budget that seeks to put Indian Economy on a faster growth trajectory. With a plethora of announcements, this government seems all set to take forward the Reforms agenda. Its commitment towards introducing the long-pending Goods & Services Tax (GST), besides increasing focus on the rural development, Infrastructure and Health are positive steps that would not just boost overall confidence, but also go a long way in generating employment. The reduction in Corporate Tax is a positive and will help make India Inc more competitive. It is also heartening to see that the new government has stressed on the need to make borrowers more accountable and the intent to introduce a Bankruptcy Law is a good step.
I also welcome Jaitley’s renewed focus on improving infrastructure. Providing good infrastructure, particularly improving connectivity to the hinterland, has been mentioned as thrust area for the government.”
T.S. Kalyanaraman, Chairman & Managing Director , Kalyan Jewellers
“The India Union Budget 2015-16 presented by the Finance Minister in the backdrop of high expectations has the distinct touch of the new regime. It has steadily continued the process of building the platform for long- term growth without falling to the temptation of populism. The budget is positive on several counts and a step in the right direction. The commitment to meet India’s fiscal gap target of 3% by FY 18 is a redeemable aspect of the budget.
The acknowledgment of gold consumption in the country with the introduction of the Gold Monetisation Scheme is an encouraging initiative which will help convert the physical asset to a liquid financial asset. The proposed Gold coins with the Ashoka Chakra will also encourage recycling of gold among domestic consumers and give a fillip to ‘’Make in India’’. ”
Harkirat Singh, Managing Director Woodland
“Firstly, the announcement by the FM to introduce Goods & Services tax (GST) on 1st April 2016 will definitely rejuvenate the retail industry. The increase in service tax from 12.36% to 14% would ideally be a precursor to introduction of GST. This would avoid the feeling of steep increase of taxes on service, on the introduction of GST as proposed rate under GST is expected to be more.
Though we were expecting total removal of excise on footwear, the announcement to cut the excise duty on leather footwear priced more than Rs.1000/-pair to reduce by 6% would be beneficial to leather manufacturers and many other brands in the footwear industry.
This definitely is a step towards promoting production facilities in India thereby supporting ‘Make in India’ campaign.”
Gaurav Goenka, MD – Mirah Hospitality
“The budget overall has been very positive keeping the growth of the Nation in mind. The only deterrent according to me in the increase in service tax to 14%. The Service tax was already quite high and with it being revised upwards its going to be detrimental to the growth of the Hospitality industry.
Consumers will have to spend more on other services, which is going to reduce his spends on eating out.”
Vaibhav Singhal, MD & CEO, Savemax
“It’s a progressive and well balanced budget that will lay the foundation of major structural changes in the Indian economy in the coming years. The hike in individual tax exemption is a welcome step that will give more money in hands of the people.”
Anand Sundaram, CEO PPZ
“Overall, this is a very progressive and forward looking budget and looks promising for the real estate investments and retail industry. Clarification on Real Estate Investment Trust (REITs) which was introduced recently to raise fund / capital by developers is welcome and should boost investment in this sector. Clarification on foreign funds and investments and status enhancement of NBFCs in terms of the SARFAESI act also helps.
While boost to the leather industry, farming and smaller entrepreneurship is a positive thing for the retail sector, increase in service tax will impact them negatively. Focus on enhancing the infrastructure especially roads will help investments in the real estate sector. The new tax norms coupled with low inflation targets should help increase consumption. The roll-out of the much awaited GST from 1st April 2016 will definitely invigorate the industry.”
Anuj Puri, JLL India
“In this year’s budget, the Finance Minister has conveyed a message wherein the benefits lie only in the fine print. For the common man, though the cumulative savings implied by various provisions are stated to be to the tune of Rs. 4.44 lakh, this is assuming a certain magnitude of personal investments into pension funds and health insurance.
The budget has not provided any additional relief via increased income tax deduction limit or on repayment of housing loans. The regime on these fronts which was announced during the previous budget from eight months ago remains unchanged. This is a disappointment, since there was expectation that the Finance Minister would further increase either or both of these limits and thereby address the reality of high property prices in India. The budget is low on big bang reforms and real estate is only an indirect beneficiary at best.”
Sanjay Bhutani, Managing Director, Bausch & Lomb India
“The budget tries to balance the requirements of keeping in control fiscal deficit (<4%) and inflation (target <6%), while cautiously reforming for facilitating growth through infrastructure investment – through Govt as well as foreign capital inflow (eliminating distinction between FDI and FPI). The issuance of gold bonds and monetisation of gold will help to ease pressure on gold demand and thus on forex demand of the country. In area of reforms, the biggest tax reform since independence, GST, has been finally given a fixed date, besides the intent of making the India tax costs internationally competitive (reduction in Corporate tax rates to 25% in next 4 years). There have been tax concessions to middle class tax payer by way of higher deduction available on contribution to pension funds, however, will not result in higher disposable income in short run. Rather, coupled with the service tax rate hike by 2% will leave lesser disposable income with middle income group and will adversely affect demand for premium products and services they aspire.”
Ullas Kamath, Joint Managing Director of Jyothy Laboratories
“The Budget 2015-16 is a sincere effort to address all class of society and bringing the economy back on track. More money in the hands of rural India by way of social sector schemes like farm credit, rural infrastructure funds allocation, MNREGA allocation and increasing agricultural area and productivity fares well for the FMCG sector as it will revive rural demand for consumer goods. On the tax front, reducing Corporate tax from 30 percent to 25 percent in a phased manner over next four years, while certainty on GST being implemented by April 2016 will provide a much needed boost to India Inc.”
Pirojshaw Sarkari, CEO, Mahindra Logistics
“The decision to increase public investment in infrastructure development including national highways is pragmatic. Better surface connectivity will provide both better speed and cost efficiency for the logistics service provider and consumer alike. The announcement of the much awaited GST too, is encouraging and should make manufacturing more competitive.”
Rakesh Dugar, Chairman & Managing Director – Mitashi
“Make in India and now ensuring employment to our youth, we have to make India the manufacturing hub of the world is a very good move announced in the budget presented by the Finance Minister Mr Arun Jaitley. Reduction in custom duty on raw materials and intermediaries is good for the sector.
Introduction of GST from next year and delaying implementation of GAAR is positive for the business in India. The fast paced clearance for starting business in India will attract more investments to the country. The said National Skill Mission, to develop employability of youth below 25 years of age will address the existing gap of trained manpower. Introduction of a comprehensive bankruptcy code for the ease of doing business by 2015-16 is an encouraging one.”
Neelu Singh, COO, Ezeego1.com
“We are happy with the thrust on domestic and inbound tourism by developing key tourist destinations and sites and making them more tourist-friendly, such as World Heritage Sites of old Goa, Hampi, Elephanta caves, Leh Palace and Varanasi temple town. It will help draw a lot of heritage and religious tourists. The government has highlighted the desire to incentivize cashless transactions which is a positive development for online sites such as Ezeego1.com. With individual tax payers getting tax benefit up to income of Rs 4.44 lakh, disposable income will increase, which is likely to indirectly induce leisure tourism. The Budget also pays heed to positioning India as a safe country for single female travellers by increasing contribution to the Nirbhaya Fund.”