India Inc terms Budget 'populist', disappointed on tax front

India Inc on Thursday welcomed the Union Budget 2018-19 -- the last full budget of Finance Minister Arun Jaitley before the 2019 general elections -- and praised the populist approach of focussing on infrastructure and rural India.

However, what came as disappointment for the industry was that the government did not provide any relief in the income tax rates for 2018-19, along with the imposition of long-term capital gains (LTCG) tax on equities exceeding Rs 1 lakh at 10 per cent.

Here is what the industry players have to say:

Sandeep Jajodia, President, Assocham: "Finance Minister Arun Jaitley has placed a huge emphasis on agriculture and rural India, allocating bulk of resources to interior landscape, while helping the middle class, salaried employees along with relief to senior citizens, measures which would boost consumer demand and help revive economic growth."

Chanda Kochhar, MD and CEO, ICICI Bank: "The wide-ranging measures announced for various segments of the rural economy will boost income levels and create gainful and sustainable employment. This, in turn, will help increase consumption levels in the economy."

Anshuman Magazine, Chairman, India and South East Asia, CBRE: "It is fair to say that this year's budget is populist, focusing on providing social security at the grass-roots level. The various announcements and funding provided are towards promoting further growth of small-scale industries as well as improving infrastructure, particularly across rural India."

K. Suresh, President, Association of National Exchanges Members of India: "While the tax (LTCG) will adversely affect serious investors funding the India Growth story, it won't have any impact on short-term traders. Instead of introducing LTCG in its current form, the government could have done better by changing the tenure of this tax or given the corresponding benefit by re-introducing 88E to take the deduction of STT (Securities Transaction Tax)"

RICHER OR POORER ???

The numbers are premised on 11.5% growth in nominal GDP, in line with 7-7.5% real growth projected in the Economic Survey, with inflation at 4-4.5%. Whether high oil prices and the government's intent to boost farm produce prices will fan inflation and throw these assumptions out of kilter will be watched. The enormous scale of the proposed welfare schemes means the challenge of implementing them in time to reap benefits in the 2019 polls will be correspondingly huge and will be a race against time.

Budget 2018: From Audis to iPhones to large TVs, you will have to fork out  ???

Get set to shell out more for luxury as there's a rise in duty on import and assembly of high-end cars and motorcycles as well as devices such as Apple's iPhone. Televisions will also get dearer as customs duty on parts used in LCD, LED and OLED panels is set to go up.
Prices of luxury cars, from companies such as Audi and Mercedes Benz, may rise by Rs 1.5 lakh to Rs 10 lakh, while also impacting models from mainline makers such as Hyundai. The latter will be increasing prices on certain models such as the Elantra sedan and the Creta SUV.