The domestic building materials, construction and allied industry stakeholders have hailed the Interim Budget 2019-20, especially the measures announced by Finance Minister Piyush Goyal for the real estate and agriculture sectors, and the middle-class. But traders felt ‘totally left out’. Following are the interim budget 2019 reactions:
Budget is directional
“Full credit to the government for sustaining and setting the direction for growth. Many good measures to drive savings and investments. Direct tax reforms will encourage more compliance. Incentive on capital gain and affordable housing will drive demand in the real estate sector. Focused attention on farmers through better subsidy will help the Agri sector. Long-term initiatives on infrastructure and ‘Digital India‘ are a clear message to sustain GDP growth. Interest relief on MSME sector will surely help revive their business. Agriculture got its due in the form of interest subvention, Kamadhenu Aayog, MGNREGA allocation and subsidy to farmers. Overall the interim budget set the tone for sustaining GDP growth and making the economy much stronger. Wish the government consider the crying need to bring down the GST rates for sanitation products given compelling need to make India ODF (Open Defecation Free).”
Set the tone for growth post Q2 this fiscal
“The exemption of Income Tax up to Rs 5.00 lakh and other exemptions will encourage the middle class to invest more in capital or consumer goods and residential property. In addition, the latest notification by the MCA, making it mandatory for companies to declare outstanding payments delayed more than 45 days to MSME vendors for goods or services, is a boon for our sector as most of the companies are small proprietary concerns.
I think low interest rates are good but low investment returns are a concern. The other schemes are focused on pushing the economy and business. However, as the elections are around the corner, decision-making may get postponed till the results are announced and a full budget is announced by the new government. It is likely that the sector will start to see growth from the 2nd quarter of 2019-2020.”
Budget to ease financial woes of MSMEs, supports NBFCs
“The Budget 2019 is focused on farmers, the middle class, and MSME sector along with many other financial and infrastructure related reforms. The stance of the finance ministry is very balanced and neutral keeping in mind the current financial scenario and credit needs for MSME sector. The Budget clearly has recognised the strain on the economy, particularly in the MSME sector, and 2% interest subvention for MSME loans with ticket size up to Rs 1 crore is a good decision that will go a long way in easing financial woes of the sector. The government’s decision, whereby government units henceforth will source 25% of their requirements from SMEs via Government e-Marketplace (GeM) is a very welcome and encouraging move to support this segment.
The speech of the Finance Minister also indicates support to the NBFC sector, whereas RBI should frame policies to support the financial eco-system, including NBFCs. The MSME sector has already received a GST relief in the recent GST council meeting, ahead of the Budget 2019.”
A dream come true for real estate
“CREDAI compliments the Finance Minister Piyush Goyal for a budget which pushes forward the imperatives of growth, employment and agrarian incomes while maintaining fiscal rectitude with the deficit at only 3.4% of GDP. I am especially happy to note that Housing for All by 2022 is considered by the government to be an essential component of New India. PM Kisan Samman Nidhi is a revolutionary step to augment incomes of vulnerable farmers.
The Budget is a dream come true for real estate. Formal recognition in the Budget to reduce the GST burden on homebuyers based on GOM recommendations is a matter of satisfaction for the Indian real estate industry. Section 24 benefit relieving second houses from income tax on notional rent and exempting second homes investment from capital gains would revive the sluggish demand for housing. Increasing the TDS threshold to Rs 2.4 lakh and allowing two years exemption from notional rent on unsold inventory removes major irritants. Section 80IBA extension by one year is a boost to affordable housing. Above all, freeing incomes up to Rs 5 lakh from income tax, which potentially means exemptions on incomes of Rs 6.5 lakh or more, increase the purchasing power and the power to invest in the hands of the consumer capable of flowing into housing. Vision 2030 provides an anchorage for the hopes and efforts of the entire nation. Kudos to FM.”
Budget is remarkably consistent in macro consolidation, leveraging on tech-driven initiatives
“Interim budget presented by the newly appointed finance minister met with stiff critique from many sections of society. However, when one filters out the pre-election giveaways, the budget is remarkably consistent in both macro consolidation, as well as leveraging on recent technology-driven initiatives. The farm income scheme, real estate-related measures and tax exemption below Rs 5 lakhs are decidedly populist, and somewhat along expected lines given elections are a few months away. But the loss to the exchequer from both is manageable. Therein lies the beauty of this budget, as it continues the path towards fiscal consolidation and minimising borrowings without diluting mammoth expenditure.
The key has been increasing non-debt revenues, both in terms of one-offs (such as disinvestment, dividends, etc.) as well as healthily increasing tax revenues on flat to lower tax rates. One could argue that improving tax / GDP ratio is a huge contributor to remaking India. Improving the use of technology and data are responsible for a wider tax base and increasing compliance. While GST and demonetisation were huge temporary speed breakers, the momentum is coming back into the system. And now with 2% reduction in interest rates and making it mandatory to pay MSMEs on time, the Government is rewarding good corporate citizens. Both these will go a long way for Vayana Network too as our endeavour is to streamline working capital for small businesses in supply chain and tax compliance. While ultimately the execution on the ground is key, one feels cautiously optimistic about this budget.”
Extra monies in hands of the poor, middle class will fuel demand
“Budget 2019 has touched the lower middle class and the poorest of poor directly and effectively. It will help many core industries and FMCG as extra money in hands of people will quickly get spent on immediate aspirations. Also, great to hear Finance Minister appreciating the honest taxpayer.
Budget has disappointed the trading community
“The Union Budget, though seemingly good overall, has utterly neglected the trading community. It has highly disappointed seven crore traders of the country who were expecting much. Every other section of the economy has been given relief except the trading community, which is the backbone of the economy. After renaming DIPP as Department for Promotion of Industry and Internal Trade and giving no extension to FDI policy in E-commerce, the traders were hopeful that they will get due attention. The Budget makes us feel that the trading community is like an unwanted community in the country. However, Confederation of All India Traders (CAIT) has said that it will send a fresh memorandum to Prime Minister and Finance Minister, urging them to take care of the trading community.”
By Mrinmoy Bhattacharjee