India Reacts to the Union Budget : Find out what Experts say

The reactions for India’s Union Budget 2016-17 have been variegated. The Union Budget 2016, presented  by the Union Finance Minister Mr. Arun Jaitley is a pragmatic and balanced act in the backdrop of global uncertainty.

In order to bring out the best of what the  Budget has managed to deliver upon, we carefully perused all working sectors and here is what we found.

1. Sector : Education


As recounted by Dr. Satish Modh, Director, VES Institute of Management Studies & Research Centre


  • The step to set up ‘Higher Education Financing Agency’ is most welcome which is in the private public sector with initial outlay of Rs. 1000 crore by the government. Corporates can use their CSR fund to participate in this process effectively. Many poor students would benefit from it.
  • There has been lot of discussion on skill building and employment generation in the budget. There are some good moves like ‘National Digital Mission’ to cover 6 crore additional rural households. 
  • One thing government clearly admits that the current education system does not provide skilled manpower to the industry. While we wait for the new education policy there is a clear indication that government wants to create new institutions in the form of 1500 multi-skill institutes at the outlay of Rs. 1700 crores. How these will be set up? So far the new Ministry of Skill Development of this government has not been able to deliver.


As recounted by Mrs. Amala Akkineni – Director –  Annapurna International School of Film + Media  


  • Union Budget allocations for education sector, digital education and the push for quality education is an excellent move.
  • However more attention could have been given to Film & media education. The visual media which has dire need of 30 million technicians in the industry in the near future, while the education sector budget has not been given any support to create these professionals.
  • We are a technology dependent sector. Digital and skill development allocations and the 62 new Navodaya schools will definitely improve quality of education in rural areas. Rs.1700 crores allocations for 1500 multi skill development centres will benefit the emerging talent to improve further.
  • Promoting entrepreneurship for SC/ST could have been little more than the actual Rs.500 crores allotted to them


2. Sector: Healthcare Finance

As recounted by Mr. Dheeraj Batra, Co-founder & VP of Business Development Arogya Finance. 


  • The focus on Healthcare is laudable and much needed. Unexpected healthcare expenses are the leading cause of poverty in India.
  • Hopefully the recommended approaches – like the Rs 1 Lakh coverage per family – combined with new innovations in Healthcare will help change that reality.
  • Initiatives like the National Dialysis Services Programme are very innovative and could set a precedent for future such initiatives, whereby this model could be replicated for other therapy areas.


As recounted by Ms. Ameera Shah, MD & CEO- Metropolis Healthcare. 


  • It’s heartening to see the fiscal discipline and a slew of initiatives for the under privileged. A lot of emphasis on infrastructure has set the right tone for overall economic reform. When it comes to healthcare, the union budget has rightly addressed the issue of unexpected healthcare expenses being a burden and pushing families in to poverty. The Health Protection Scheme and the Rs. 1 Lakh cover will surely help the families in need.
  • However the budget has once again failed to address any kind of healthcare reform. It is important that the leaders from this industry are heard in the policy process where they can join hands with the Government to spearhead more planned and regulated funds for health and healthcare. This by far has been the most disappointing budget for health. It is time that the government realizes that Health is an important indicator of economic development and work towards an overarching vision for healthcare.


3. Sector: Food & Beverage

As recounted by Mr. Vinod Gaikwad, Business Head, REITZEL specialty foods Pvt. Ltd 


  • Allowance of 100% FDI in marketing of products manufactured in India is a welcome move to boost the FMCG industry of India. This will lead to better infrastructure and quality of products available in Indian market making it more competitive. We are looking forward to these trends and opportunities in order to expand our business in the country


4. Sector : Tech & Start-Ups

As recounted by Abhimanyu Sofat, Cofounder – India’s only robo advisor’s


  • The budget announced today is a non-event from the market perspective. No increase in eligibility for LTCG is a big relief for the market.
  • Taxing of PPF and making it par with NPS is an indirect positive for the capital market. The taxability of dividend income above Rs. 10 lakh is likely to help in curbing the menace of dividend stripping.
  • The main focus of the budget has been on rural income and infra which both are commendable. Despite the lower allocation for the recapitalization of PSU, maintaining the fiscal deficit target is a clear indicator to RBI to cut interest rates further. Also increasing the deduction on HRA is a welcome step to increase disposable income for the middle class. We would like to give a 7 out of 10 overall for the budget.


As recounted by Niraj Taksande, Co-Founder, Express Bike Works on the announcement related to start-ups.


  • Startup budget (500cr) is much less than promised (10k crore) during startup India. But, it is important to understand execution of the same.
  • For direct taxes: GST is key. Clarity on that will be great.
  • Corporate taxes of 29% on companies with low revenues is not a need of an hour for startups who are bleeding money
  •  100% tax exemptions for 3 years is good


As recounted by Mr. Ashwani Rathore, CEO and Co-Founder, SpiderG:

Ashwani Rathore, CEO and Co-Founder, SpiderG-min

  • Facilitating claim of TDS in an easier manner for start-ups would be an important move. At the initial stages, start-ups may suffer losses, but that doesn’t stop banks and sellers from deducting TDS. This affects the liquidity of start-ups negatively. The government should ideally exempt the status under section 197. Earlier on, a generic exemption could be got under section 197. However, the mechanism is now different: exemption can be got only from a specific deduct mentioned in the application list. Reverting to the earlier mechanism would be highly beneficial to start-ups.
    Section 56 (2) of the IT act makes start-ups liable to pay taxes on any investments received.
  • Also the sale of unlisted securities within 3 years of investment are liable for taxation, as short-term capital gain. This gain cannot be set-off against any loss for similar investments. Start-ups and angel investors, trying hard to raise money, are hit hard by these clauses.
  • Angel investment is the initial lifeline of start-ups. If the tax regime supports such investments, investors will begin treating angel investing as an asset class. The government should encourage angel investors to support new businesses, by giving them and the businesses receiving funds, tax breaks. Such budget reforms will take the entire eco-system one step closer to achieve ambitious goals of the honorable PM’s and help to make Start-up India, stand up India initiative a successful campaign


As recounted by Mr. Ajit Patel, CEO & Founder of n-gage. 


  •  Governments ambitious announcement to achieve 100% village electrification by 1st May, 2018 and a new Digital Literacy Mission Scheme for rural India to cover around 6 crore additional household within the next 3 years is commendable.
  • The allocation of Rs. 1804 crore for skill development and the proposed 1500 Multi Skill Training Institutes to be set-up, will definitely boost the employable population and generate more jobs for rural youths and in turn would help release the pressure in urban cities for want of employment.
  • Also, the government has spoken about IPR, which will go a long way in providing boost to R&D by companies focusing on innovation and technology.
  • India has about 400 million internet users, most of whom use the internet via mobile devices and roughly 250 million own smartphones. We need to have a robust mobile and broadband infrastructure and transparent IT policy, to provide the necessary boost to Indian IT. There should be absolute clarity on the taxation and regulatory system with favourable IT policy framework to encourage entrepreneurs.


5. Sector : Real Estate/Infrastructure

As recounted by Mr. Sandeep Upadhyay MD & CEO, Centrum Infrastructure Advisory Ltd.

  • It is evident that the Government continuous to focus on re-fueling investments in Infrastructure with a high priority on Transportation sector.
  • Expediting Dispute resolution in Infrastructure sector is aligned to the Kelkar committee report and was expected, though I believe allowing renegotiation of terms in PPP contracts is a rather bold step with a positive intent. Initiating renegotiation of contracts is a sensitive issue and may certainly need to be rationally calibrated in a well defined framework to avoid any undue advantage being passed on to stakeholders.
  • Given the huge NPAs already disclosed in the last two quarters and continued high stress expected on various Public Sector Bank’s balance sheet the disappointing part was the limited corpus allocated for recapitalization. This may adversely affect companies in Infrastructure and other core sectors committed to undertake Capital Expenditure in near future.


As recounted by Mr. Shishir Baijal, Chairman & Managing Director, Knight Frank India

Shishir Baijal

  • Overall, the Union Budget augers well for the real estate sector, having addressed Affordable Housing, REIT and Infrastructure. 
  • The housing sector will get a push from both supply and demand side. The first time home buyers will be encouraged since they get an additional deduction of Rs.50,000 on interest for loans up to Rs.35 lakh and a house value of Rs.50 lakh. In effect, it will reduce the cost of loan which will boost the demand for housing in the budget to mid segment.
  • On the supply side, 100% exemption of profit for developers and exemption from service tax for construction of houses less than 650 sq feet will encourage supply in the affordable housing segment. 
  • REIT has finally got its due with the abolishing of the DDT that was holding back asset owners. This is a welcome move for the industry. There will be no road block in launching REIT schemes any time now.
  • Infrastructure and rural development focus in the Budget has been encouraging and is expected to give the much needed fillip to the real estate sector. With massive push in infrastructure (huge outlay for roads and railways and developing smaller airports to improve regional connectivity) and incentives to MSME, Make-in-India will get a further boost that will benefit the real estate sector in the long run.


6. Sector : Dairy 

As recounted by Mr. Tamaal Roy, CEO- Biomatiques Identification Solutions Pvt. Ltd.
Tamaal_Roy, CEO, Biomatiques

  • With schemes like “Pashudhan Sanjeevani,” “Nakul Swasthya Patra,” “E-Pashudhan Haat” and “National Genomic Centre” for indigenous breeds it looks like we are heading in the right direction.
  • If we have to go by the census of 2011 which was conducted across 300 districts, India is home to 27 crore cattle which means 25 per cent of the world cattle is in India. Everyday 112.5 million liters of milk is produced in India. 87.7 per cent cattle owners across the country live off only 4 acres of land. According to National Crime Records Bureau (NCRB), there were 5560 farmer suicides in 2014. As we all know, after agriculture it is animal husbandry which is the second most important occupation and a vital source of income for farmers in India. That’s where such schemes will be really useful.


7. Sector  : Logistics


As recounted by Mr. Praveen Somani, Director, Inland World Logistics

Mr. Praveen Somani, Inland Logistics

  • Increasing budgets for spends on constructing new state and national highways will positively impact the logistic industry which will allow deeper penetration and improved delivery and services.
  • However, the associated facilities and infrastructure should also have been part of the budget and focus of our government like increasing and improving the conditions of the Seva Kendras, which are the truck driver’s well being centres. Improving the numbers and conditions of these kendras with good food, training programs, healthcare initiatives is equally important to improve the truck driver health and make our highways a safer haven.
  • Industry expected announcements and some firm commitments on GST framework and timelines to align the existing central indirect taxations. But it was skipped in the budgets.


8. Sector : Venture Capital Industry/ Finance


As recounted by Mr. Sanjay Chamria, Vice Chairman & MD, Magma Fincorp Ltd


  •  Maintaining a fiscal deficit of 3.5% is a very credible step for the financial markets, robust outlays for infrastructure, agriculture, rural and socio-economic schemes are also welcome moves, however, one can argue that more could have been provided for recapitalization of banks which are currently facing issues of mounting NPAs.
  • Mr Jaitley once again relaxed the FDI policy in several sectors, including insurance and pension and asset reconstruction companies, to attract more overseas investments.
  • As for the Financial sector, the recognition of gaps in the current insolvency and bankruptcy regime and the proposed introduction of the bankruptcy code is a step in the right direction. However, much will depend on the insolvency related eco-system that will need to evolve to make these measures a success.

As recounted by Mr. Ajay Jalan, Founder & Managing Partner, Next Orbit Ventures

Mr. Ajay, Next Orbit Ventures

  • We were looking forward for government support in creating a positive environment pertaining to venture capital (VC) and private equity (PE) funds in India, and bringing it at par with the global standards. We were expecting regulators should help unlock domestic capital pools by encouraging institutions regulated by them to invest in VC/PE asset classes.
  • Pensions & provident funds should have been encouraged and investment limits for banks & insurance companies in VC/PE Funds could have been increased from 10% to 25%.


9. Sector : Consumer Goods

As recounted by Mr. Bengt Rittri, Founder and CEO of Blueair.

CEO of Blueair, Mr. Bengt Rittri

  •  Home and business owners as well as the air purifier industry need to be under incentive to get air pollution protection devices such as air purifiers in every Indian homes. To start with, reducing import duties on air purifiers can be a step that can be taken by the government.Background on the actions taken this Budget on air pollution – 
    1. Air pollution in rural- The Finance Minister announced that the government will provide LPG connection in the name of women in rural households and Rs. 2,000 crore will be allotted for this. This will bring down indoor air pollution caused by the ‘chulhas’ (stoves)— burning wood, coal and animal dung as fuel — which is major factor behind the occurrence of a slew of diseases, including respiratory diseases among women.
    2. Vehicles to cost more – In a move aimed at checking the rising air pollution levels in the country, Mr. Arun Jaitley has levied additional taxes on Diesel and SUVs to pull down the demand. He announces 1% Clean Energy Cess on LPG cars, 2.5% on diesel, 5% on SUVs as part of green measures and to encourage use of Hybrid cars.
    3. Clean energy cess – There is an announcement of clean energy cess in this budget to reduce the negative environmental consequences and increased pollution levels associated with industrialization and urbanization. It increased from Rs 200/ton to 400/ton on coal, lignite and peat.








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