The Union Budget 2020, presented by the Finance Minister, Nirmala Sitharaman, has benefited the Aam Aadmi, farmers in general. But despite this, the government has failed to meet the expectations of some sectors. The top business honchos and executives have shared their opinions on the 2020 budget which led the Sensex to crash closely by 1,000 points.
Let's see what industry leaders have to say on the budget 2020:
Mr Lokendra Ranawat, Founder & CEO, WoodenStreet, said that the allocation of Rs. 27,300 crore will lead to a setup of a better environment for industry and commerce. As the electronic sector is in focus of Government, new startups based on the manufacturing of electronic equipment and semiconductors will also see a rise. New investment in this sector and change in export norms will also give a boost to this industry. The subordinated debt for MSME's and overall debt restructuring will also benefit the entrepreneurs and small businesses greatly.
Mr Siddhartha Mohanty, MD & CEO, LIC Housing Finance said that the "Extension of time period till March 2021 is a welcome step taken by the government in the affordable housing space benefiting both, individuals and developers. While tax holiday on profits would encourage more builders to take up affordable housing projects, an individual can firm up home buying decision to enjoy the additional tax benefit of Rs.1.50 lakhs. It is a right step towards realizing the mission of Housing for All by 2022."
Dr Ravi Singh, Vice President and Head of Research of Karvy Stock Broking: said that the "Markets witnessed a knee jerk reaction after the presentation of Union Budget by Finance Minister Nirmala Sitharaman. Nifty plunged over 185 points on Saturday after the Union Budget projected widening of fiscal deficit for the current financial year. The FM announced the fiscal deficit in the current year to be present at 3.8% of contrary to the previous target of 3.3% of GDP. Even though the dividend distribution tax (DDT) was removed, markets couldn't digest it as the taxation is passed to the dividend receiver as per the income tax slab. The markets have also been expecting some relaxation in long-term capital gains (LTCG) tax and security transactions tax (STT). As there was no mention of these, markets witnessed selling pressure. Other reasons can be attributed as no specific measures has been taken or sops announced for the important sectors such as auto to increase the demand in the economy even though there have been more requests from the industries long ago.
In the current Financial year, the government has set a target of 1.05 Lakh crores, but the government hasn't reached it yet even after the BPCL divestment. The government has made divestment worth Rs 18,094.59 crore this year, so far. However, in the budget, the government has doubled its target to 2.10 lakh crores which might be even difficult to achieve despite the LIC IPO.
Given its earlier rumours or known factors, the markets might have already discounted the LIC IPO. Also, LIC has been used as a sovereign fund to support market sentiments by the government. On its disinvestment, the scope of LIC will get truncated."
Mortgage lender Housing Development Finance Corporation (HDFC)'s Deepak Parekh on Saturday said markets are disappointed with the union budget 2020 as there are no specific incentives for manufacturing or the real estate sector.
"The budget has some very positive aspects as the disposable income in the hands of the middle-class people and people earning lower salaries will increase and so consumption has to increase."
Other than extending the exemption limit for higher deduction for one more year, the budget has given tax-free for the developers for one more year for affordable housing, Parekh said.
"I think the NBFCs are going through the toughest time I have seen in 40 years. The marginal benefit they have given is the partial guarantee to certain NBFCs and refinance by NABARD for some of the agricultural finance that NBFCs give," he added.