Published On : Mon, Feb 29th, 2016

Union Budget evokes mixed reactions from traders, business community and politicos

Budget 2016-17 ReactionsNagpur: No soon had the dust and din over the budget announcements died down that the voices of dissent rose up, from Nagpur and elsewhere too. Let us listen to what Nagpurians are saying:

Former Indian Army Officer and present President of MIA, Hingna Captain Randhir Mohan:

Where is the allocation for Defense? Jaitley was completely silent about it. (In fact the allocation has been reduced). We have China and Pakistan breathing down our necks on East and West and they are spending huge sums on Defense equipment. What will our soldiers combat that with?

Today, our soldiers are dying not only at the border but even in peace times fighting terrorism. Someone is dying everyday… but where is the pay out of OROP? Where is pay parity for the army?

Agar bureaucrats’ aur babus paisa khate hai toh Jawan goli khata hai”
(Bureaucrats do corruption and become rich, soldier dies with bullets). There should be a separate pay commission for them and their OROP demands should be met in toto. Speaking about industries, since he is an industrialist now, Capt Randhir says there is nothing substantial for small and medium industries in the budget. They had asked for Excise duty exemption limits to be raised from 1.5 crores to 5 crores. What has been given is only Rs. 2 crores! And if State Governments do not give matching VAT relief, this exemption too will be meaningless. It will just duplicate paper work of small industrialists.

“Small and medium industries are the back bone of the country. They continue to be neglected. It is the big boys who default on thousands of crores of loans that still get most benefits.” opined the President of MIA.

Chef and Owner of fine dining restaurant Hibiscus and Madras Cafe Aditya Naniwadekar is feeling frustrated by the news that dining out is going to cost more. “We are already reeling from the general slow-down where footfalls to our eateries have reduced, now we will probably have to shut down”. Aditya says disheartened. Speaking about the move that will have SUVs and big cars costing more and other burdens on the higher tax bracket Indians, Aditya says

“Already 3% tax payers bear the burden of 97% of Indians. Now the burden has increased.”

A prominent Nagpur businessman settled in Mumbai now opined:

“This budget gives no impetus or boost to any sector really! Little cosmetic changes here and there, even the Railway budget was the same. They always talk of modernization of Railway stations, construction of more high ways, so what was new? Most stations have remained more or less the same over the years.”

Meanwhile, a ‘Green Industrialist‘ of Nagpur Shyamala Sanyal, asks why there was no mention of Solar energy or any form of non conventional energy in the budget? “With the amount of sun shine India has, it is criminal to waste this resource for power. On the other hand, emphasis has been laid on increasing coal mining that surely leads to more environmental damage and destruction of forests.

Nuclear power can also be a recipe for disaster in the case of a mishap. The world has had enough examples of those.” She also bemoans the fact that exploration and sourcing of Gas from high seas is being promoted instead of Solar or power from urban waste. “What a tragic waste is that?” 

CAIT National President B C Bhartia and CAIT Secretary General Praveen Khandelwal: Union Budget will strengthen economy and increase cash flow in market

Union Budget will increase cash flow in the Country & will strengthen economy. It is creditable that focus of Budget has been shifted from corporate to non corporate & farm sector but​ allowing 100%​ FDI in food processing will enable MNCs to control & dominate food sector and neither farmer will be benefited nor the food ​industry. ​The Confederation of All India Traders will submit its concerns to Finance Minister and urge him to reconsider this proposal as it also runs contrary to the promises of BJP for not allowing FDI in Retail.

​CAIT National President B C Bhartia and Secretary General Praveen Khandelwal said that ​removal of 13 types of CESS, tax rebates to small taxpayers, incentives to small entrepreneurs and encouragement to declare tax evasion money will increase cash flow in market.​Opening of 1500 multi skill training institutes will promote skill development in the Country.​

They further said that ​increasing target of MUDRA to 1.80 lakh crore will pave way for financial inclusion of  ​u​unfunded enterprises but​ demanded that ​ Mudra should be declared as an independent regulator​ and refinancing should be done through NBFCs, MFIs, Trust & Societies​ and Trade Association should be involved in carrying Mudra to actual beneficiary. Model Shop & Establishment Bill allowing 7 days opening of small shops is an attempt to compete with big retail. Banking Board Bureau will streamline banking in the Country. Development of 160 Airports, construction of 10 thousand km roads will improve connectivity and transportation and will benefit trade. 

Past Chairman, Nagpur Branch of ICAI – CA Ashwini Agrawal:
Amid tough financial conditions, beset with huge demand on resources and harsh global headwinds, Finance Minister Arun Jaitley has tried to put spotlight on rural and social sectors, pumped some money into the infrastructure sector, while keeping his budget math balanced to meet the 3.5 per cent fiscal deficit target, which will be crucial point for this budget to be called a successful one. Without altering the personal income-tax slabs, Finance Minister has offered some extra incentives on rent allowance and others. Levying of 0.5% Swacch Bharat CESS on all services will effectively increase Service Tax rate to 15% and is a step towards preparing for GST at Higher Rate. Announcement of Voluntary Disclosure Scheme of Income will help to resolve litigations and disputes. Bank recapitalisation target at Rs 25,000 crore seems to be very little keeping in view the growing volume of NPA of Public Sector Banks but he also proposed a bankruptcy code and other measures to address the NPA concerns. A new system of credit rating for Infra Sector, policy for renegotiation of PPP Projects and Grievance Redressal System for Public Utility Project is a good step for pushing growth in Infrastructure Sector and helping stalled projects. Allowing 100% FDI in Food Processing Units may help Vidharbha as in recently concluded Make in Maharashtra event Government of Maharashtra has signed various projects in this sector for units to be set up in Vidharbha. By proposing to frame Model Shops & Establishment Act, allowing retail traders to keep open their establishments for all days of week is a welcome move. Overall no big bang measures in the budget, but this year’s budget needs to show real execution towards the government’s intent of making India an easier destination to do business.

CA Ashish B. Mukim’s Budget reaction: Overall great Budget:
Many things for poor people and Rural India
Rs 5,500 crores for Crop Insurance, Rs 15,000 crores for Interest Subvention on Agriculture Loan, 19,000 crores for Rural Roads, 38,500 crores for MANREGA, Rs 8,500 crores for Rural Electrification, 2,000 crores for poor family for LPG connections, Total 1,80,000 crores for MUDRA Loan. Health Insurance Scheme of 1 lakhs for every family, 3 years Income Tax benefit for Start Ups and many benefits to Companies providing affordable housing. In Income Tax, TDS provisions have been rationalized, Limit U/s 44AD increased to Rs 2 crores, Rebate U/s 87A increased to 5,000, Interest benefit on Housing Loan increased to 2.5 Lakhs. These provisions will benefit lakhs of Taxpayers.

Overall every sector and every section of Society will be benefited. Growth oriented, Pro poor and Rural India Budget.

Executive President Federation of Associations of Maharashtra (FAM) Dipen Agrawal’s: “The year of Implementation”

The adherence to fiscal discipline with emphasis on growth and development, increasing infrastructure spending are key elements of this year’s budget. It is encouraging to see that fiscal discipline has been given priority at today’s budget. Budgetary assumptions, especially nominal GDP will be the key. Focus on rural/social sector spending and road/highways are along expected lines and positive. But less than expected support for banks re-capitalisation has disappointed. Service Tax was left unchanged and long-term capital gains tax fears were left misplaced.

FM had a tough task of balancing between needs of the farm sector as well as the industry expectations. He has sought to garner resources to boost public spending for higher growth and global headwinds. Budgetary allocations for Farm, Rural, Infra and Social Sectors is welcome with balanced view on infra, irrigation and rural sector, budget will usher higher levels of growth.

Budget has indicated moving towards a simplified tax regime. Announcement of limited period compliance from June 1, 2016 to September 30, 2916 is welcome.

It’s pro-poor and farmer’s budget says Kishor Tiwari
” For the first time in  NDA Govt., has brought hope and cheer for all the farmers across the country as it covers the core issues of agrarian crisis and hostile rural economy related farm credit, irrigation facility, health security, restoration of sustainable agriculture, food crop promotion , E-marketing and intervention with price stabilization fund  ,food security, crop insurance ,rural employment under MNREGA and Mudra scheme  , LPG and road connectivity ,thin is right move  to address the present agrarian crisis and stop farmer suicide but more sensitivity and proper implementation is need of the hour”, said President of Late Vansantrao Naik Sheti Swavalamban Mission (VNSSM), a Government Maharashtra’s Special Task Force for Farmers in 14 Distressed District of Vidarbha and Marathwada Kishore Tiwari reacting on budget 2016. The budget of 2016, for the first time, a record farm credit  allocation has been made  of Rs. 9.35 lakh crore in fact  It has quadrupled since 2013. Finance Minister introduced special 0.5% Agricultural Welfare Tax to be collected thru Service Tax. Its welcome move, much needed for welfare farmers, , but this amount of Special Tax must be made available to Farmers Distress Proven Areas in India specially like Vidarbha & Marathwada where maximum no of unfortunate incidence of farmers suicides have been occurred, to provide direct help to Govt of Maharashtra to give helping hand to Farmers in Real Distress. So this Special Agro Welfare Tax of 0.5% must be spent for Distressed Areas instead of General Pool, as it has been specifically added due to our VNSSM demands”, Tiwari added. Tiwari welcomed Central Govt for not announcing any Big unwanted, Mindless & BOT Mega Project to please big corporate, further demanded that Union Govt while amending MNREGA Act must provide to allow States to give direct benefits to Farmers such as 100% grants for digging wells & small water ponds under MNREGA in Rain Fed Areas like Vidarbha and Marathwada.” Agro Priority Sector Lending enhanced to Rs.9.35 Lacs Crores to be made directly available to Farmers, instead of Agro Processing Sector, virtually turning to NPAs. There should be separation of Direct & Indirect segments in Agro sectors so that Farmers can be benefited directly & can get Credits from Nationalized Banks in Public Sectors instead of Cooperative Bank. Similarly, Food Security schemes tobe strengthen to give direct benefits to families in distress regardless of Agro holding”, Tiwari demanded. We are pleased to know that the budget aims to double the farmer’s income by 2022 with ehlp of a dedicated Irrigation fund worth Rs.20000 crores to be set up under NABARD and bringing .5 lakh acres to be brought under organic farming over three year period, implementation of 89 irrigation projects will be fast-tracked,.Rs.35984 crores is the total allocation for farmer’s welfare. This shows the priority of the government is to provide additional resource to the rural areas, Tiwari said.
We welcome the move to give extension of credit to   very marginal segment of farmers with Kisan Credit Cards (KCCs) has the benefit of interest subvention scheme prolonged for further period of up to six months (post-harvest) against Negotiable Warehouse Receipts (NWRs), at the same rate as available to crop loan. This is done to dampen the agonizing sale of crops by small farmers, provision of Rs.15000 crores towards interest subvention to reduce burden of loan repayment has been made, Tiwari said. Government has earmarked Rs 86,500 crore for irrigation under the Pradhan Mantri Krishi Sichaai Yojana. Total allocation for agriculture for the coming fiscal is to be Rs 35,984 crore. Further the government has said that 89 irrigation projects are to be fast tracked by the on a priority. Out of this 30 projects are to be completed by 2017. Tiwari said that the focus on irrigation, MNREGA, crop insurance was important. now babus  should convert it in to reality ,TIwari added.

Secretary of Nagpur Branch of ICAI-CA. Umang Agrawal:
Budget affirming that economy is on right track
“The Finance Minister has tried to present the budget affirming that economy is on right track however the common man feels totally neglected. Minor relief for salaried class through Rs. 3000/- Tax Rebate and other small changes would not give the required increase in Purchasing Power amongst taxpayers. The Finance Minster has very intelligently tried to be away from any major announcements regarding GST. Senior Citizens without pension are once again left with their own personal savings without any social security. The FM should have concentrated more on laying the roadmap for the economy rather than announcing numerous new schemes and programs not directly affecting the common man. It would be difficult for the FM to take benefits from the Income Disclosure Scheme launched by him due to high Percentage of Tax Rate for disclosure of undisclosed income. Difficult times ahead for Banks since Rs. 25,000 crores allocation is just a patch on Rs. 1, 80, 000/- crores need that the Economic Survey had identified. It would be interesting to see how the government ensures its promises made for year 2022 after 2019 General Elections for farmers and rural India.”

President of VTA J P Sharma: Budget in the interest of Agriculturists
This budget will be remembered as the budget which resulted in upliftment of the agriculturists’ of the country, which forms major portion of our population. Announcing Rs 2.87 lakh crore as Grant in Aid to Gram Panchayats and Municipalities as per the recommendations of the 14th Finance Commission; likewise taking every block under drought and rural distress as an intensive Block under the Deen Dayal Antyodaya Mission and a sum of Rs 38,500 crore being allocated for MGNREGS few steps for improvement of rural sector, including 100% village electrification by 1st May, 2018 are commendable steps.

Taxing marginally to the high taxpayers’ and providing incentives to buyers of small flats is welcome step. Union Government is focused in bringing new taxpayers in their net and with sincere efforts they are gradually achieving this target too. Infrastructure sector is also very well covered wherein total investment in the road sector, including PMGSY allocation, would be Rs. 97,000 crore including allocation of Rs. 55,000 crore in the Budget for Roads and additional Rs. 15,000 crore to be raised by NHAI through bonds. Similarly 10,000 km of national highways in 2016-17 and 50,000 km state highways to be converted to NH roads are correct steps.

Secretary of VTA Tejinder Singh Renu:
Well balanced & growth oriented budget
This budget is more focusing on rural areas, simultaneously promoting growth on the lines of Make in India and further bringing some positive efforts in reducing tax litigations. Although I was expecting some relief in 10% bracket of direct tax, however both threshold limit as well as tax slabs are kept untouched by the Finance Minister Arun Jaitley. Taxing marginally more to super rich and to those, who can afford is fine. With rising farmers’ suicides, it is good that government is more focused on agricultural sector by promoting efforts to double their income by 2022, linking of rural roads, 100% electrification by 2018 are appreciable steps. Similarly an attempt to address problems of black money from domestic market is another noteworthy proposal.

Promoting affordable housing will be highly beneficial for the Indian economy in multiple ways. By offering tax benefits to small tenements up to 60 square meters builders will be encouraged to construct such size flats and buyers will get affordable flats with tax benefits with extra advantage to first time buyers.

Likewise proposal to form regulatory body by amending appropriate acts and introduce bankruptcy code to control gaps in the current insolvency and bankruptcy regime is a step in the right direction. I rate this as a good budget with marks of 8 out of 10.

Former Vice-Chairman WIRC of ICAI: CA Julfesh Shah:
It’s a prudent, growth oriented & balanced budget
In a critical economic scenario, Finance Minister did considerably well by doing a tight rope walk and announcing an overall prudent, growth oriented and balanced budget with lesser populist measures. Major thrust on infrastructure, rural development, agriculture employment, pension and educational skill & development & also trying to give a boost to the sagging banking sector by declaring an capital infusion of 25000 crores for PSU’s. Also he announced some challenging tax reforms & reassured assessee friendly atmosphere. To give a boost to the new manufacturing companies liberalized tax at the rate of 25% is announced & also proposal regarding exemption from capital gains tax for amount invested in start up’s will give a dimensional fillip to this sector. Finance Minister announcing various measures to reduce litigation & quick disposal of disputed cases & also the announcement of compliance Window scheme like earlier VDIS is a encouraging step & will provide boost to the revenue.

Arun Lakhani, Chairman and Managing Director, Vishvaraj Ltd. Commenting on the Union Budget:
 “The union budget 2016-17 is a step forward for the welfare of the people and growth in the country. For the infrastructure development the government has announced fund allocation of at Rs 2.31 lakh crore that would aim to enhance the infrastructure base of the country. Guideline for renegotiation of PPP contracts is a long standing demand from international investors and will make the investment environment much more risk neutral. It is a big step towards overseas funding comfort for PPP in infrastructure. 228% higher grants to gram Panchayats & urban local bodies in accordance with FFC recommendations will augment development process significantly in terms of providing basic facilities like clean healthy water, sanitation, and other basic amenities leading to smart towns of future.   This budget restores balance in Rural Bharat and India Inc. The approach of the Finance Minister is one of quantum jump rather than tinkering, which would accelerate the development process and put the Indian economy on a sustainable growth trajectory, while further expediting the “Make in India” programme and ‘Swaach Bharat Mission”.

Budget an exercise to stall declining popularity of BJP: MPCC chief Ashok Chavan
The MPCC President Ashok Chavan has described the Union Budget as an exercise to stall declining popularity of Bharatiya Janata Party. “It was expected that the BJP Government’s coffer, brimming to the full by the money of declining prices of oil since the past two years, would be opened up for farmers and common people. However, unfortunately, the Government has shown its generosity. Words of loan-waiver have proved empty. The Government is sidelining the urgent effective measures in the name of long term measures. There is a provision in the Budget of making available Rs 9 lakh crore instead of Rs 8.50 lakh crore for agriculture loans. But this hike is natural. This provision gets increased every year. The increased amount of money for agriculture loans does not show Government’s love for farmers,” said Chavan in a sarcastic remark.

“The Government is fetching money from the rich by the spades and giving to the poor by the spoons,” said the MPCC President.

Radhakrushna Vikhe-Patil: Budget is nothing but straw wrapped in attractive packing
Commenting on the Union Budget presented on Monday, the Leader of Opposition in Assembly Radhakrushna Vikhe-Patil said “The Budget is nothing but straw (Bhusa) wrapped in attractive packing.”

“Is the Government on ‘wind up mode’ in the name of ‘Start Up India” and ‘Stand Up India.’ The policies of the Government show the same. Due to the great work during Congress rule, the nation’s economy has not collapsed despite global slowdown. The present Government has now remembered the MGNREGA at the time of crisis. This very MGNREGA was tainted by the Prime Minister during his speech in Lok Sabha. The Government is now forced to increase the provision for the same MGNREGA. This shows that the BJP Government has accepted Congress policies as vast and people-oriented,” taunted the Leader of Opposition.

City NCP President Ajay Patil:
“The Union Budget is totally a disappointing one. At the time of ISIS threat, no extraordinary provision has been made for Defence Forces. This Budget will prove a boon only for corporates and black money holders,” said Ajay Patil the City NCP President.

This budget is back-breaking budget for middle class people. The sops provided to farmers are insufficient. There are no concrete measures for development of industries, said Patil.

Executive President Federation of Associations of Maharashtra (FAM) : Dipen Agrawal
The adherence to fiscal discipline with emphasis on growth and development, increasing infrastructure spending are key elements of this year’s budget. It is encouraging to see that fiscal discipline has been given priority at today’s budget. Budgetary assumptions, especially nominal GDP will be the key. Focus on rural/social sector spending and road/highways are along expected lines and positive. But less than expected support for banks recapitalisation has disappointed. Service Tax was left unchanged and longterm capital gains tax fears were left misplaced.

FM had a tough task of balancing between needs of the farm sector as well as the industry expectations. He has sought to garner resources to boost public spending for higher growth and global headwinds.

Budgetary allocations for Farm, Rural, Infra and Social Sectors is welcome with balanced view on infra, irrigation and rural sector, budget will usher higher levels of growth.

Budget has indicated moving towards a simplified tax regime. Announcement of limited period compliance from June 1st to September 30th is welcome.