APN News

  • Tuesday, July, 2019| Today's Market | Current Time: 10:29:24
  • Budget reaction quotes from Dun & Bradstreet MD and Chief Economist

    Published on July 6, 2019

    Manish Sinha, MD, Dun & Bradstreet India.

    Our headline response to the Union Budget is that the government stayed consistent to the growth agenda that was emphasized in their election manifesto. The Union budget was expected to provide a blueprint to make India a US$ 5 trillion economy. It has outlined some of the measures to achieve that. We see four  themes in the Budget announcements: Structural reforms, Infrastructure development, Investment facilitation and ‘Ease of living’.
    Structural reforms like strengthening the regulatory authority of RBI, faceless tax administration, rationalization of labour laws, promoting R&D, bringing companies having annual turnover up to Rs 400cr within the 25% corporate tax benefit and social stock exchange will provide a foundational support to the economy.
    Infrastructure spending of Rs 100 lakh crores in next five years, connecting states through Bharatmala phase 2 and developing connectivity infrastructure will facilitate ease of doing business.
    Measures to facilitate foreign investment through 100% FDI for insurance intermediaries, merging of the NRI-Portfolio Investment Scheme Route with the FPI Route and permitting investments made by FIIs/FPIs in debt securities will help in getting capital.
    Ease of living measures like National Common Mobility Card, 8 crore free LPG connections and interoperability of PAN and Aadhaar are helpful  initiatives.

     

    Dr. Arun Singh, Chief Economist, Dun & Bradstreet India.

    It is certainly an improvement from the interim budget with the objective to achieve US$ 5 trillion economy. By focusing broadly on infrastructure, affordable housing, recapitalizing PSU banks and supporting NBFCs and agriculture sector, government has shown intent to revitalize the economy. However, specific measures were expected to revive the Indian economy from the current slowdown. Expectation of restricting fiscal deficit at 3.3% compared to 3.4% is well intended with realistic revenue, ambitious non-tax tax revenue mobilization. However, borrowing in foreign currency can have implications if not well managed. The target for divestment in this fiscal is huge and should have careful monitoring of the execution, to avoid slippage of fiscal deficit target. The announcements towards education, skilling, and labour reforms needs to be well drafted, executed and timely implemented to get the intended benefit. On the flip side, increase in excise duty for petrol and diesel has a potential to stoke inflation.

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