Marketers' outlook positive on Union Budget 2019
Marketers are positive about what the Union Budget 2019 brings, especially with regard to the start-up industry and tax relief for private individuals
Finance Minister Nirmala Sitharaman presented the Union Budget 2019 on Friday 5th July. The major highlight of the budget was that there were no changes in the personal income tax rates and plans to make India a USD 5 trillion economy by 2020. There has been a reduction in corporate tax as well, the corporate tax with a turnover of up to Rs 400 crore has been slashed to 25 per cent from a current rate of 30 per cent. The Government has emphasized the promotion of startup culture and digital payment in India, like last year.
We spoke to marketers to understand their views on the Union Budget 2019 and how it will help the industry to grow further.
Ashutosh Harbola, CEO & Co-founder, Buzzoka
"The budget looks to be a Truly Digital one in nature and strong steps are seen for the upcoming fiscal year. From new channels to be started under the Doordarshan bouquet to providing a platform for startups to disseminate information in the industry, to Bharat Net which is targeting Internet connectivity in local bodies in every panchayat in the country are all welcome steps. Also, training of 10 million in industry-relevant skills like AI, IoT, and Big Data will help address the severe skill-shortage of technology and IT. We are really optimistic that the digital path taken by the government is surely matching the $3 Trillion vision."
Ahammed MP, Chairman, Malabar Gold & Diamonds
“The Finance Minister’s decision to hike the import duty on gold from 10% to 12.5% will be a double whammy for the gold retail industry, a segment which is critical for creating the much-needed jobs for the economy. This is because, on one hand, it will lead to a substantial increase in input costs for the industry, therefore sending the retail prices up and hitting sales. On the other hand, it will provide a stimulus for the illegal shipment of gold into the country which will further hurt taxpaying players in the segment. Therefore, considering the critical role of the gold industry in supporting economic growth and job creation as well as exports, the Government may reconsider this move. It is our long pending expectation that the Government should lower the import duty on gold to 5% level to make illegal trade in gold unattractive”.
Harshil Mathur, CEO & Co-Founder, Razorpay
"This budget brought in some good news for Startups and FinTech. It solved one of the industry's major concerns that going forward, the startups do not have the trouble of angel taxes. Next, the announcement about launching an e-verification portal for investors will help startups worry less about the verification of their investors. On the digital payments front, the government has demonstrated their interest in promoting digital payments in a great way - a) any business will be charged a TDS of 2% on cash withdrawal of above 1 crore in a year, b) any business which has an annual turnover of Rs 50 crore and above must opt for certain modes of payments, with no charges or merchant discount rates. I believe this will discourage businesses from making cash transactions and encourage them to make payments through digital channels. I think the budget meets expectations from the industry and seems fairly positive for FinTech and startups. I see these as welcome moves for the digital payments ecosystem, which will also certainly increase adoption of B2B digital payments."
Rajan Wadhera, President, SIAM
“The Finance Minister has extended wholehearted support to electric mobility, but this will not help the automotive industry in emerging from the current steep slowdown it is facing today. We warmly welcome the various additional measures announced to promote EVs like reducing the GST to 5%, exemption in customs duty on EV parts and especially the Income Tax deduction on the interest component paid for loans taken for purchasing EVs. All these were recommendations given by SIAM and we are grateful to the Finance Ministry for having accepted them. These measures will certainly help in making EVs more affordable and attractive to the consumers, which is in line with the recommendations made in the Economic Survey. But, it is disappointing that the FM has not recognized the distress in the auto sector and not come out with any kind of support or stimulus, said Wadhera. However, the initiatives for improving liquidity in the market by capital infusion in the banks should help the industry to some extent”.
Kamal Nandi, President, CEAMA and Business Head & EVP, Godrej Appliances
“We are committed to promoting indigenous manufacturing of appliances and consumer electronics in the country and the announcements in this budget shall provide the necessary boost to the Government’s initiative of ‘Make in India’. We were hopeful of concrete measures that would accelerate demand. CEAMA will continue to work closely with the government to formulate more policies to develop the appliance and consumer electronics industry in India. New age skill sets such as AI and Robotics will help improve the quality and quantity of skilled labour - critical to industrial growth.
TS Kalyanaraman, Chairman and Managing Director, Kalyan Jewellers
“We are looking at this budget positively as the multiple reforms introduced clearly indicate that the Government is looking at laying the ground to fuel up the growth across sectors through relief offered to the consumers across sectors. With an investment of Rs.100 lakh crore proposed for infrastructure, we are expecting a bright future for the infra sector which in turn will benefit us, as consumers will have more disposable income and the gems and jewellery industry presents itself as a lucrative investment option with profitable returns. However, the increase in customs duty on import of gold from 10% to 12.5% may affect short term sentiments on gold buying, and lead to an increase in the illegal supply of gold in the market”.
Dinesh Chhabra, CEO, Usha International
“We welcome the Union Budget which will boost the country’s development in the coming years, particularly in rural markets. With the economy growing and a rise in disposable income, this news ahead of the festive season will certainly bring cheer to all stakeholders in the consumer durable sector – companies, partners, and customers – and we are optimistic that this will lead to a spurt in the growth in the consumer durables category. We also welcome and are hopeful that the announcement of pension benefits to 3 crore shop owners under the new Pradhan Mantri Karamyogi Mandhan Scheme will bring some relief to the small retailers.”
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