Budget 2019: What CFOs Say

The Chief Financial Officers share their views on the interim Budget proposals forthe next fiscal announced by Finance Minister Piyush Goyal.

Sugata Sircar, CFO & Country Finance Partner – Greater India Schneider Electric: With the containment of inflationary pressure and fiscal deficit, a healthy FDI and stabilisation of key policy reforms, our macroeconomic fundamentals look stable for our vision to emerge as the third largest economy by 2030. The reduction in tax proposed by the Budget is in the right direction of enlarging the tax base. Expenditure on infrastructure continues to provide momentum for growth.
It is pertinent that the government stays firmly on course to stick to this fiscal target and to achieve it without any glitches. It is also heartening to note that the Budget unveiled a clear vision and focus areas for the next decade, with an aim to become $5 trillion economy in next five years and $10 trillion economy in next eight years.
Joydeep Datta, Director – Finance, Publicis.Sapient: I love the idea of our honourable Finance Minister putting more money in the hands of the middle class to increase consumption and improve economic growth. Removal of the notional rent on an additional self-occupied house is a welcome relief.
Joydeb Chatterjee, Senior VP & CFO - Packaging Films, Laminated and Coated Fabrics Business, SRF Limited: I would say it is an election Budget. Best to comment when the next government adopts the same. However, I am worried about the fiscal deficit. (There are) too many giveaways.
I hope that the rest of India can look at the incentives as being the  right catalyst for growth by boosting consumption, while the global economy faces a significant slowdown. 
Hemant Kumar Ruia, CFO, Indus Towers
I would say the Budget has endeavoured to touch all the key stakeholders viz., agriculture, middle class, and small industries in a positive way. This should give more money in their hands, thereby, helping the growth agenda of the government.
Kapil Bagadia, CFO, Ernst & Young Services Private Limited: The interim Budget, this year, has been one of the most populist one so far, touching all sectors. As was expected, it is a poll Budget in continuation to the last year’s move. With the elections looming, the focus has been on the farmers, the unorganised sector and the middle class, offering massive support and tax sops to these sections.
To ameliorate the farmer distress, an expenditure of Rs 75,000 crore has been announced for the farmers’ income support. But the proposal — along with the pension scheme for unorganised workers and also a 43 per cent jump in the personal tax rebate threshold from 3.5 lacs to 5 lakh — will possibly impact the fiscal deficit target next year.
The benefits towards housing for public and exemptions to developers should improve the down-trending real estate sector. It will help create employment and act as a positive sign for financial institutions, which finance the real estate sector. The announcement that, in the next two years, tax returns will be assessed anonymously, without any personal interface between the assessee and the tax officer, is a significant step towards a corruption-free India. The annual aid for small farmers, having land less than 2 hectares, may seem to be a low sum but, being over and above the state-led aids and the MSPs, it is going to work as a big boon to check farmers' distress and improve rural spending capacity. 
Though the government has kept the changes minimal on the tax front, the raised tax rebate threshold at 5 lakh will create more consumption capacity amongst the lower middle class. Additionally, the announcement to reduce oil imports, focussing on renewable energy, is of great significance. It will reduce dependence and provide an impetus to the economy, leading the nation towards self-sufficiency. Emphasis on infrastructure development with the country being named the fastest highway developer, promotion of trade and retail and widespread digitalisation seem to be steps in the right direction, but as for all other initiatives, the impact will depend on the actual implementation.
The Finance Minister said  our country is the second biggest startup hub and also announced a National AI portal. However, there is no benefit announced for startups and angel investors, which is disappointing as that is the need of the hour.
Last but not the least, laying down a vision for the country in the form of “Vision 2030” is commendable and was much-needed. The concrete roadmap, which will be a big sentiment-booster for the economy, focusses on ten dimensions, including building of physical and social infrastructure to ensure progress of the country towards being a $10 trillion economy, extensive digitisation across the country, a cleaner pollution-free nation, with food sufficiency and a robust health system for all, among others.
Overall, this is a good, fiscally prudent Budget and will continue to help boost the economy as more disposable income in the hands of the farmers and the middle class will facilitate increased consumption.


Atul Banshal, President - Finance & Accounts, M3M India: One of the biggest disappointment vis-a-vis income tax proposals in the interim Budget. (There is) no tax benefit to people, whose income is more then 5 lakh. First tax slab has not changed (remains at 5 per cent for Rs 2.5-5 lakh). Rebate u/s 87A has been increased to Rs 12,500 up from 2,500 for assesses having income less then 5 lakh. Only taxpayers in the lowest tax slab of 5 per cent, with income less then Rs 5 lakh will benefit.
Salil Ravindran, CFO, Marlabs Inc: The interim Budget presented seems to be a robust consumption-push and growth-stimulus, with concessions to the rural and agricultural sector and sops for the middle class.
The Budget can be criticised for being populist in an election year. However, there are positives and negatives in the Budget, similar to earlier ones. The proposals to verify and assess returns electronically and to process ITR in 24 hours are great changes that will go a long way in building trust and transparency with the taxmen. 
The digital village initiative is also a progressive proposal. Also, I expect the real estate sector to be benefitted by the non-application of notional rent to two self-occupied house properties and benefit of Section 54 extended to investment in purchase/construction of two residential house properties. However, the Budget did not provide any grants, incentives or subsidies for the renewable energy sector, proving to be another damp squib for renewable energy sector in India, which expected it badly.
The broader economic issue continues to be the slippage in the fiscal deficit targets of 3 per cent, which will result in higher borrowing. Also, apparently the underlying math suggests aggressive revenue assumptions, including for indirect collections. So, (it's) overall a balanced Budget that could have addressed the fiscal situation better.
T Lakshmi Narayana, Director, Sr VP - Finance & CS, Komatsu Limited: My opinion is similar to a situation where a treatment has been given to a patient in coma, at an irrelavant time and incurable stage, when he/she could have been easily treated with a minimum cost.
Manish Singhania, CFO, Essar Steel Pune Facility: This is first time that an interim Budget has been presented by a Finance Minister, who belongs from the accounting fraternity. If we analyse current economic framework of the country, clealry two divergent trends and views are visible. One, there is a set of economists, investors and elite class — who champion the theory of open-up and fiscal prudence. On the other hand, there is mass population representing BHARAT, which is resentful as benefits of economic growth have not reached them and they are struggling to live life with dignity.
Mr Piysh Goyal has done wonderful job in marrying both stakeholders and have attempted to provide healing touch, while not endangering fiscal imprudence.
The Budget aims to touch base almost all sectors — be it farmers, unorganised sector, middle class taxpayers.
Vision for 2030 is quite expressive and provides roadmap for Healthy and Happy Bharat.
Vishwas mOre, CFO, Swan Solutions & Services Private Limited: Budget is aimed at progressive health of the a country's economy. But we always look for monetary benefits out of this Budget. Indian economy will boost only when the change happens in our thinking from “I” to "India".
We have always shown agriculture industry as a unproductive cost centre and always assign grant for this sector. Budget 2019 also came up with some grant i.e. Rs 6,000, which is basically for maintenance of this cost centre, which is again not the solution for the agricultural industry.
Whereas agriculture industry is working on seasonal basis and depend on the nature for the survival. The surety of fixed monthly income is not there; so, people are moving towards cities for jobs. The government should restructure the agricultural industry and look at this industry as a prospect towards economic Growth.
Big corporates are running the CSR (corporate social responsibility) activity. Now, the government needs to think on ASR (agricultural social responsibility) activity.
IIMs are coming up with good business ideas. I feel they have to come up with big business ideas on “how to develop agriculture industry”. I feel startups should now begin coming from “agriculture industry” as like other sectors. Today, we always give importance to the designation i.e. CEO, CFO, CIO etc. India should start thinking to a new designation i.e.  “Chief Farmer Officer”.
Venkatraman G S, CFO, Subex: The interim Budget presented by Mr Piyush Goyal has some interesting themes, which could be expanded on, going forward, to give a boost to the economy as a whole.
1. Big push by government for AI with the establishment of National Centre of AI and identification of 9 priority areas, which will be the focus of the national portal.
2. Decision to create 1 lakh digital villages in next 5 years should help more digital initiatives being adopted across the country.
3. Govt explicitly calling out India as being the second largest hub for startups is encouraging, would have been great if the angel tax provisions were clarified to push further investments into startups.
4. Pension for people employed in unorganised sector is a great social welfare scheme. Interesting to watch how well this is implemented. Initial outlay not very large at Rs 500 crore.
5. Not much of benefits to corporates, except for continuing with the tax benefits for companies with turnover less than Rs 250 crore — being at 25 per cent. 
6. Tax rebate for salaried class with income up to Rs 5 lakh in addition to increase in standard deduction a plus for people who have taxable income of Rs 5 lakh. TDS deduction limits on interest income and rent have been enhanced.
7. Big push for defence spending with largest ever outlay of Rs 3 lakh crore in the interim Budget.
8. The direct cash transfer of Rs 6000 as part of PM-Kisan scheme for farmers holding up to 2 hectares of land, should help alleviate concerns of poor farmers in an election       year. 
9. Initial estimate indicate Rs 75,000 crore PM-Kisan scheme outgo will impact fiscal deficit by 0.26 per cent.
10. A number of other pro-farmer incentives have been rolled out as well.
Gopal Krishnan V B, CFO, Rajshree Sugars and Chemicals Limited: This wonderful decision of tax rebate to income up to Rs 5 lakh has brought smiles to the salaried people, who fall under this slab. This, to some extent, corrects an anomaly that the economically weaker section were provided with the reservation on one hand and subjected to income tax on the other hand. The concept of notional rent was a cruel provision under Income Tax Act. Thankfully, it has been done away with. Hike in the limit that triggers TDS on post office, bank deposits will free-up cash flows, doesn’t lower the income tax burden though.
The sweeteners to the farmers by way of direct income support is a welcome step, though there is threat that it could result in the further division in land holdings.
Overall, a good Budget; however, the key is the funding of the expenditure and maintaining fiscal deficit within the Budgeted level.
Narendra Somani, CFO, Modelama Exports (P) Ltd: The steps taken under this Budget has been encouraging and progressive covering all walks of society — like lower middle class, small farmers, unemployed persons, interest subvention to MSME, defence, education, health and infrastructure.
This is a true common men Budget, which offers social security by providing fixed income to farmers and labourers.
Lalit Soni, CFO, Total Logistics (India) Pvt Ltd: The Budget touches all issues, which were raised by the paksh (government's alliance partners) and vipaksh (opposition) parties. This will accelerate enterpreneurship and employment.
K P sompura, Head – Finance, Lincoln Pharmaceuticals Ltd: The Budget is excellence. New things and new concepts were introduced for the first time in India. It is quite different than the traditional Budgets in the past. Adequate care has been given to all sections of society. It is goods for farmers.
Debasish Roy, Group CFO, Arvato India: The Government of India has tried its best to present a popular Budget and appease the middle and lower income group. However it would be a tough Budget to execute  and keep the Fiscal deficit at check. 
Ujjawala, gratuity limit, Rs 6000 to farmers, are really welcome steps  and the income from increased collection of GST and Divestment  shall be big challenge ahead.
Nishith Pujary, Sr VP – Accounts, Capacite Infraprojects Limited: I would rate this interim Budget 7 out of 10, based on the following boost to the real estate sector: Budget 2019 is aimed at providing increased tax exemptions to the middle class homebuyers, which means more money at their disposal that may encourage them to consider investing in the real estate. It seeks to provide relief to real estate builders by extending some of the existing benefits.
By proposing tax rebates for those earning Rs 5 lakh, Budget 2019 has tried to improve the purchasing power of the middle class to invest in homes. 
Also, the proposal that no notional rent will be levied on second self-occupied homes and that capital gains up to Rs 2 crore can be used to buy two houses, is expected to boost demand for housing.
There is no notional rent levied on second self-occupied homes and the capital gains up to Rs 2 crore, which can be used for buying up to two houses; thus providing much-needed impetus to the demand for homes. The deductions announced under Section 80IBA have been extended to projects, which will be registered by March 2020. This again paves the way for new launches.
However, the Budget did not address the issue of clearing the NBFC deadlock which continues to hold the real estate sector to ransom. There was no announcement concerning creation of a stressed-asset fund to bail out distressed homebuyers. The government should also take steps to create a stressed asset fund for homebuyers to deal with the issue of stalled and incomplete projects.
The direct transfer scheme for the farmers means more money in the rural economy, implying greater push for two-wheelers and tractor OEMs.
The Finance Minister has done a brilliant job by not touching corporate taxes and giving relief to middle class taxpayers in the election year. I expect the purchasing power of individuals to increase as direct cash to farmers, pension for unorganised workers and tax breaks for the middle class will increase the net cash in the hands of the consumers. Sectors such as FMCG and consumer durables would be the first beneficiaries.
Goyal also raised the "standard deduction" – a flat amount on which taxes are not paid to Rs 50,000 from Rs 40,000 annually. He also raised the tax exemption on bank deposit interests to Rs 40,000 from Rs 10,000 currently.
Goyal also announced Pradhan Kisaan Samman Nidhi, which will enable farmers to receive Rs 6,000 a year directly into their bank accounts. About 120 million farmers owing up to two hectares of land will be eligible scheme.
Just a few months remain before the term of the current NDA government ends as Piyush Goyal presented the interim Budget today. An outgoing government presents only an interim Budget or seeks a vote on account. The government seeks the Parliament’s nod for incurring expenditure for part of a fiscal year. It leaves to the next government to present the full Budget. Hence, the market expectations were already muted for this Budget.
The Budget speech mainly reflected on the key achievements of the present government over the past five years and their vision for India. It can be assumed that the government refrained from announcing big-ticket changes in this Budget. The budget maintained a good balance between populism and fiscal prudence (this was expected being an election Budget). The government missed its FY19 fiscal deficit target (of 3.3 per cent of GDP) and instead pegged it at 3.4 per cent. It budgeted the FY20 fiscal deficit target at 3.4 per cent of GDP, missing the glide path target of 3.1 per cent. The Budget poses tough challenge for the fiscal situation for FY20, given the aggressive assumptions for tax revenue growth; it however, is expected to boost consumption. This growth mix may prove to be neutral for the overall macro situation.
Market had expected, considering the elections, that the government might overshoot the fiscal deficit by 20-30 bps. However the government net borrowing of Rs 4.73 lakh crore in 2019/20 and gross market borrowing of Rs 7.1 lakh crore were higher than expected. Debt market reacted slightly negatively with yields spiking by 8-10 bps on 10 year G-Sec. The cumulative effect of the cash transfer to the farmers and the middle income class will be a boost to consumption, but at the likely cost of crowding out private investments.
The states are in bad fiscal shape and the total public sector borrowing requirement is now estimated at 8.2 per cent of GDP. This is undoubtedly raising interest rates, and crowding out productive private sector borrowing. The budget provides no cash for bank recapitalisation. In effect, money will be printed to keep the deficit at the budgeted level, and that will stoke inflation. 
While the fall in food and fuel prices have made the cost of living look benign, core inflation has already hit a worrying 5.4 per cent, and will tend to rise faster after this budget. That has already taken the bond yield to 7.4 per cent, meaning industry faces very high real interest rates, damaging Make in India prospects. 
Vikash Sureka, CFO, IBS Software Services: The Budget 2019 presented by honourable Finance Minister Mr Piyush Goyal was on expected lines. The Budget, clearly, was to please the mass and provide enough talking points for the forthcoming elections.
The  Vision-2030 presented by the minister were inspiring and have solid founding blocks towards a promising future for the country. However, it remains to be seen how they are implemented by successive governments. In the near term, I welcome the move towards providing guaranteed income for farmers and also to enhance the base level of the taxable income. This will help the marginal farmers and the middle class, although I feel that the guaranteed income protection should be much higher to make it meaningful.
Lastly, while many schemes, deduction and exemptions were announced, what remains unanswered is how such programmes will be funded, given the stress on the fiscal deficit. So, in nutshell, it is an election Budget, understandably, to improve the sentiments, and if NDA is chosen to power again, they need to figure out the finances.
Pramod Dubey, CFO, Accutest Research: Though this Budget was flavoured like a political speech, but overall very good and balanced effort made by the Finance Minister. This Budget has made all efforts to reach out to broader masses and reward the honest taxpayers. It was more built on the concept to broaden the base and reduce the tax burden. Best part was to put in place the long term vision for the country, which I would say is the "First Step Towards Developed Economy", if implemented.
Arun Kabra, Director & CFO — Education & Conference Businesses, Times of India Group: The changes in individual income tax are quite good and those will impact positively on housing finance, financial sector in general and FMCG. The high Budget allocation for defence is a negative and has impacted the overall fiscal deficit — which will finally impact the inflation also. Certain industries like pharma, tyres, NBFCs, automobile needed some benefits under the Budget and we may see that the final Budget post the elections may have those corrections.
Overall, it’s as per expectation, considering that we are heading to elections in a few months.
Vikas Chadha, Executive Director and CFO, Berggruen Hotels Pvt Ltd: The Budget has been more or less in line with expectations, as it was always forecast that being an interim Budget government was expected to give a wide-based and popular Budget, which is what it has been.
Though there has been no direct industry specific announcements, we find that numerous initiatives have been taken, which will enhance disposable income both in the hands of the middle class as well as farmers.
The biggest announcement would be the income tax exemption limit increase to Rs 5 lacs and increase in standard deduction limits which  increases the disposable income in hands of middle class tax payers which will help drive consumer and consumer discretionary expenses including travel and holidays.
Gopal Bihani, Head – Farm Fresh Business, Future Group: Farming and rural development will yield more income to farmers and boost farming and rural sector industries, companies and startups business opportunity. Such major increase in income in the pocket of mass population of this country will come back through spending and support the country’s economic growth. 
Income support scheme is really modest. During the lean period in realty market, extending one more year for exempting deemed income is great support and will boost to better quality developers. Removing tax on notional income from house property was expected as next step after adding TDS provisions for rent in past, a big relief to all honest taxpayers. Making tax assessment electronically is a good move. It is biggest ever income-tax gimmick.
Pravin Nigam, Vice President - Finance, Jaypee Hotels: The interim Budget has not covered the areas of health and job creation. Direct Tax Code (DTC) is still pending from last 4-5 years. The exemption limit up to Rs 5 lakh is just nothing, but has been probably keeping in view the Lok Sabha election to attract the salaried class, which has been ignored in the last five Budgets by the government.
R Chandrasekhar, DGM - Accounts, Mahindra & Mahindra: I would like to say that even in an election year, the government has not gone overboard with populist measures. Relief under section 87A augurs well for the lower middle class, though the higher middle class may have been disappointed with no change in tax slab.
Rajiv Guha, GM & Head - Finance & Accounts, Crew B O S Products Private Limited: This Budget seems to be a masterstroke by the PM just ahead of forthcoming general election. He has been able to balance Budgets very well and provide sops for the salaried class, farmers and workers in the unorganised sector and keeping the fiscal deficit under check. The economy also is bouncing back with very high GST collection last month. The market has also responded positively.
I think one should give credit to the present government.
Malakondalarao Nunna (NMK Rao), General Manager - G&A, Kirusa: The Budget is an annual exercise of the government's finances. A holistic way to analyse the Budget is to look at the path chosen by the government over its entire term - "consistent with its promises".
In this context, NDA government's fifth budget, despite the pressure of impending general elections has stayed largely true to the course of the previous four years. The introduction of new subsidies, income support for farmers and increased food subsidy will dent the spending on capital expenditure for FY20. Capital expenditure has been the highlight of this government in all previous budgets.
Lalit Mahapatra, Global Head - Mergers and Acquistions, Navitas Life Sciences
Boost to rural and urban middle income households
Fiscal prudence largely maintained despite election pressures
Commitment to adhere to the fiscal deficit glide path and attain 3% by 2021
Not So Good:
Fiscal Deficit for FY20 expected to be 3.4% with no improvement over FY19.
Increase in subsidies overshadows growth in Capital expenditure
Fiscal math aided by high Goods and Services Tax (GST) growth assumptions and high divestment/ dividend targets
Smart Move:
Revival of Real Estate sector by giving much needed sops
Expansion of tax exemption to Rs 5 lakh provides much needed succor to the urban middle class


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