Prime Minister Narendra Modi's 2.0 government unveiled the Budget for 2020-21 on Saturday (February 1), aiming to get growth back up from its lowest in a decade. Finance Minister Nirmala Sitharaman who presented the longest-ever Union Budget 2020 speech in Parliament asserted that "tax harassment" would not be tolerated.
The Finance Minister said the three major themes of the Budget are aspirational India, a caring society and economic development for all.
How India Inc react to Budget 2020:
1. Biocon chief Kiran Mazumdar-Shaw
Soon after the Finance Minister presented the Union Budget for 2020-21, Biocon Chairperson Kiran Mazumdar-Shaw on February 1 lauded Sitharaman for promising to end tax harassment of India Inc and correcting the Companies Act to decriminalise many non-compliances.
Taking to Twitter, Shaw said, "FM promises end to harassment to India Inc and correcting the Companies Act to decriminalise many non-compliances. A much-needed message to infuse trust."
2. Harsh Jain, Co-founder and COO, Groww
"The government is clearly pushing manufacturing in the country - an investment clearance cell being set up, scheme to encourage manufacturing of electronics and semiconductor industry products, Rs 27000 cr for industry and commerce is a good measure for the economic boost."
"Startup ESOPs taxation on vesting will be deferred for five years or till exit - whichever is earlier! This is great news as the current system collects taxes too early. This will encourage more startups to get incorporated and create jobs. It will make it easier for startups to incentivize good talent and attract more skilled talent towards working in startups"
"Dividend tax removal and tax to be paid by the investor based on his/her tax slab is good news as it simplifies taxation on dividend earned by investors and reduces hassles."
"Raising deposit cover from Rs 1 lakh to 5 lakh is great news and will definitely give investors more peace of mind."
3. Anuj Puri, Chairman, ANAROCK Property Consultants
Clearly, this was a 'make or break' Budget for the government with most sectors (including real estate) seeking concessions to boost consumption and investments. The government has lived up to the overall expectations in several ways. This Budget restores some of the lost confidence in the India growth story - and more importantly, within India Inc. - by laying emphasis on wealth creators.
That said, the Budget misses on the 'quick fixes' the real estate sector needs urgently and focuses more on a long-term vision. Still, there were a few positives:
Affordable Housing continues to be the government's focal point for real estate. The previous tax exemptions for both homebuyers and developers have been extended for another one year.
Personal tax relief across various income slabs will invariably increase disposable income at the hands of the middle class, and boost their consumption capabilities.
Alternative segments get more boost: Rather than giving direct benefits to residential real estate as a whole, the FM laid more focus on alternative segments within real estates - such as warehousing, data centres, schools, hospitals and hospitality. Plans to build Data Centre Parks across the country will boost demand for more real estate spaces. Simultaneously, plans to develop 5 archaeological sites will open new avenues for employment and also indirectly push real estate development.
Boost to personal investment: Raising the insurance cover of depositors from INR 1 lakh to INR 5 lakh will boost the confidence of depositors. This, in a way, will lead to bigger deposits – and thereby help in increasing liquidity in the banking system.
Abolition of DDT for corporates is another bold move that will help them to diversify or expand their business and also make India an attractive destination for investors, thereby boosting investments. This is definitely good news for commercial real estate.
Infrastructure development remained on top of the government's agenda of propelling economic growth. Undoubtedly, infra development has a major multiplier effect on not just the overall economy but on the real estate market as well.