What Private Sector of India thinks about Budget 2013-14 ?

Private Sector of India (India Inc) has responded with mixed opinions regarding the Union Budget 2013-14. While Healthcare, Exports and Automobile Sectors expressed dissatisfaction over the budget, IT  Sector gave a very positive Response to it. IT  has welcomed Budget as a laudable effort to kickstart the next cycle of investment while addressing inclusive and sustained development.

Healthcare Industry

Healthcare experts in the private sector that little was done to recognise their contribution. “Considering the fact that the private sector serves 75 percent of the healthcare diagnostics responsibility for the country, the union budget has yet again missed the opportunity to recognise the private sector in terms of both provision of high quality affordable services and geographic reach,” said Sanjeev Chaudhry, doctor and managing director of SRL Diagnostics.

However Malvinder Mohan Singh of Fortis Healthcare said: “There is something for all sectors. Outlay on rural development is up 46 percent and infrastructure has been given a significant boost. The initiative for a women’s bank, a first in the world, is laudable.”

IT Industry

NASSCOM was very apprensive about the Budget. “Angel investing is critical for the country and recommendations on structuring through regulator Sebi (Securities Exchange Board of India) and providing pass through benefits is a step in right direction,” Nasscom president Som Mittal said in a statement. It  however, sought amendment to section 56 of the Income Tax Act, 1961, to make the pass through benefit applicable to investments above Rs.5 crore.

Indian IT bellwethers Infosys, TCS and Wipro  termed the union budget for fiscal 2013-14 pragmatic, progressive and growth-oriented.  “Looking at the current global uncertain economic environment, the budget 2014 is a pragmatic one,” Infosys executive co-chairman S. Gopalakrishnan told IANS .

Echoing Infosys, Tata Consultancy Services (TCS) chief executive N. Chandrasekaran said Finance Minister P. Chidambaram’s intentions were very clear – to move India back to a higher growth plane despite constraints.

Jewellery Industry

India’s jewellery industry  gave a thumbs down to the budget saying it was a “non-event” for the sector. “This budget turned out to be a non-event for us,” Gems and Jewellery Export Promotion Council’s eastern region chairman Pankaj Parekh told IANS, saying none of the recommendations of the task group to make India as an international diamond trading hub was announced by Chidambaram.

Electronics and Semiconductor Industry

The Indian electronics and semiconductor industry is happy with the Budget. The 15 percent investment allowance in addition to depreciation benefits will attract investments into the fledgling sector. Levying higher import duty on set-top-boxes will boost domestic manufacturing and address the unfair advantage imported set-top-boxes get in one of the fastest moving electronics products in the country.  Hailing zero customs duty on import of equipment to set up a semiconductor chip-fabricating (fab) facility, IESA chairman Satya Gupta said the proactive step would help in improving the viability of such projects to investors.

Silk Industry

In order to give a measure of protection to domestic sericulture, Chidambaram in his budget speech proposed to increase the duty on raw silk from 5 percent to 15 percent. “It could help a little bit domestic raw silk producers as they will now get a better price realisation. But the measure would hit the country’s silk fabric exporters very badly. Chinese raw silk yarn would become expensive due to the hike in custom duty,” Silk Association of India president Vikram Tantia told IANS.  “Till now we are very much dependent on raw silk yarn imported from China as the domestic raw silk does not have the same quality,” Tantia said. According to him, the duty hike of 10 percent would increase the production cost of finished silk fabrics by the same proportion and it would make India’s exports more  un-competitive compared to China’s in the overseas markets. Indian silk product exports have already been facing a major slowdown with the economic downturn in the US and Europe. “This will give a further setback,” Tantia said.

Steel & Heavy Industry

Both private and public sector steel companies  hailed the union budget for 2013-14, terming it one with potential to achieve growth leading to inclusive and sustainable development. “The Union Budget 2013-14 is along predictable lines and is in sync with the government’s mantra to achieve growth leading to inclusive and sustainable development. Given today’s scenario, it is a fairly realistic budget combining populism and economic prudence. It has ensured status quo and gives a message of stability and continuity,” said Ravi Uppal, MD & CEO, Jindal Steel and Power Limited (JSPL).

Other Industries

Industry in Andhra Pradesh hailed the national budget for 2013-14 as balanced and growth-oriented.  “This is a balanced and growth-oriented budget with good intentions for inclusive and sustainable development. The budget has a long-term aim of reviving the ailing economy. The announcements are positive, but implementation is key,” said G.V.K. Reddy, founder chairman and managing director, GVK Group.

“The budget brings good news for the radio industry. Benefits like news, networking, current affairs and sports, will add the fillip to further fuel listenership growth through reach and content diversification,” said Tarun Katial, CEO, Reliance Broadcast Network.

 

Industry Bodies and Associations

CII

“The budget meets most of our concerns regarding fiscal consolidation, investment incentives and inclusive growth,” said Adi Godrej, president of the Confederation of Indian Industry (CII).  Fiscal deficit has been kept below the target at 5.2 percent for 2012-13, and has been pegged at 4.8 percent for 2013-14. The CII particularly welcomed the emphasis on inclusive growth and development, with Plan expenditure raised almost 30 percent and inflationary pressures from the supply side sought to be depressed.

“On the policy front, the major ‘breakthrough idea’ is the Independent Regulator for the roads sector. This is most welcome,” said Vinayak Chatterjee, Chairman, CII National Task Force on infrastructure projects.

FICCI

The Federation of Indian Chambers of Commerce and Industry instead welcomed the proposal to move from profit sharing to revenue sharing for exploration projects as this would do away the ambiguity in calculation of cost recovery and approval of capital expenditure incurred by companies before sharing profit petroleum with the government.

The IT and electronics manufacturing industry, which was looking forward to budgetary support, is disappointed that the government has not removed excise duties on seven key components, said Jaijit Bhattacharya, co-chair, FICCI Electronics Hardware Committee.

IEEMA

The Indian Electrical and Electronics Manufacturers Association (IEEMA), however, said the domestic electrical equipment industry is generally disappointed as the budget proposals do not provide the desired impetus essential for growth, sustainability and viability.

IESA

“We believe steps outlined for the electronics sector by Finance Minister P. Chidambaram in his budget will help attract large investments, promote entrepreneurship and boost domestic manufacturing,” India Electronics & Semiconductor Association (IESA) president P.V.G. Menon told IANS.

IACC

“This budget is hopeless. The hike in duty on raw silk yarn imports will have a huge negative impact on the country’s exports of finished silk products to the international markets,” said Arun Kumar Agarwal of the Indo-American Chamber of Commerce.