Yesterday, Finance Minister Nirmala Sitharaman presented the Union Budget 2021-22. This has come at a time when the Indian economy is recouping from the aftermath of Covid-19. Evidently, India Inc was anticipating incentives that would boost businesses and help them recover as fast as possible. While some are happy with the budget, some are very disappointed.
Read what the leaders of the Indian luxury industry have to say about this year’s budget.
Martin Schwenk, Managing Director and CEO, Mercedes-Benz India
“We welcome the policy stability that the budget provides to the industry by no new announcement of direct taxes, though we would have liked some reduction in compensation cess. It’s good to see some positive movement through the scrappage policy and we also expect the capital expenditures to indirectly help the industry. The decision to spend more on infrastructure despite the high fiscal deficit will boost the overall economic revival and we should see a positive impact on the PV market. However, the increase in the rise in auto component duties is unexpected in such a revival period, and it will increase the production cost, leading to higher costs for consumers. There could have been a further push towards e-mobility by lowering import duties on EV.”
Balbir Singh Dhillon, Head of Audi India
“We welcome the announcements by the Hon’ble Finance Minister with regards to increase in spending on road infrastructure and more economic corridors. These initiatives will lead to a more efficient supply chain besides boosting the overall economic growth. Furthermore, the scrappage policy, though voluntary to phase out old vehicles is a step in the right direction and will encourage demand for newer vehicles.
Auto industry is burdened under high duties, GST/Cess and Registration costs. Therefore, we continue to urge the Government and the GST Council to rationalize the whole tax structure ; which eventually will lead to higher volumes and revenues for the State.”
Gaurav Mehta, Founder & CEO, Jaipur Watch Company
“I think the budget is positive in the sense that it will drive consumption and encourage consumers to spend like they were doing in the pre-COVID times. The announcement on rationalization of custom duty on gold, silver, and other precious metals is a huge positive for us in the bespoke watch industry. The demand for bespoke gold watches is at an all-time low, a lower customs duty will help us reduce our input costs, which we can pass on to consumers. Await to hear details on custom duty for imported watches.”
Sachin Jain, Managing Director, De Beers India
“Import duty reduction on gold and silver from 12.5% to 7.5% is a step in the right direction and will boost the diamonds, gems and jewellery sector. As a result of this cut, prices of precious metals will fall, which in turn will spur demand and footfalls into the retail/online stores. As we did not see any drastic increase in taxes, the demand for precious diamonds, gems and jewellery will continue to be strong among consumers. Overall, the budget announcement for the sector has struck an optimistic chord in the new year.”
Rachel Goenka, CEO & Founder of The Chocolate Spoon Company
“The budget is extremely disappointing as yet again the hospitality industry has been left out. Considering the fact that we employ almost 8 million people and contribute towards 10% of the country’s GDP, and then to get to zero consideration is just disheartening. At the very least we expected some support towards regenerating employment. Given the severity of the impact of the pandemic on the hospitality sector, we were hoping for impactful, immediate and near-term support. We were equally disappointed with the continued denial of the input tax credit, which is critical for survival.”
Hemant Mediratta, COO and Co-Founder, Antara Luxury River Cruises & Founder One Rep Global
“Tourism is a fairly sizeable contributor to GDP at 10% and employs over 75 million people directly and indirectly. The business has been hit hard due to the pandemic. The allocation laid out for enhancing rail, road, ports and PPP in buses will boost infrastructure, thereby will help tourism growth in the long term. The expectation was for tourism to be on the concurrent list. Improved connectivity, better airports in tier 2 and 3 cities should augment tourism.”
Anuj Puri, Chairman, ANAROCK Property Consultants
“As anticipated, affordable housing and rental housing got a big boost with the govt. extending the period for extra deduction of INR 1.5 lakh available for loans up to 31st March 2022. This will keep demand buoyant for affordable housing in 2021 as well. Further, the extension of the tax holiday for affordable housing projects for one more year will help bring in more new supply within this segment. As per ANAROCK Research, affordable housing already accounts for more than 35% of the supply across the top 7 cities in the country.
The announcement to set up 7 mega textile parks with plug-and-play facility in 3 years will unlock the potential of new markets for development and provide an impetus to real estate assets, including logistics and warehousing.”
Designer Gautam Gupta, Label Asha Gautam
“The textile industry needs big support and the textile park seems to be a great step towards it. Handloom industry need more support as it is the biggest strength of our county and more and more steps will help Make in India a bigger reality.”
Arun Chittilappilly, Managing Director, Wonderla Holidays
“The first paperless Union Budget presented today has been envisioned on a self-reliant or ‘Atma-Nirbhar’ Bharat. At the onset, it is a balanced budget that has identified various avenues to deal with immediate and long-term aftereffects of the economic slowdown. However, we are disappointed with no provisions made for the Amusement Park business as it had suffered huge losses due to the pandemic. We directly employ more than 2,500+ individuals and are one of the largest single-site employers in the villages/districts we operate. The government should positively look at generating employment through this non-polluting industry. And relief in terms of reduced GST, exemption from e-invoicing or any state-level tax burden like local body tax (LBT) would have been a blessing for the amusement park industry”.
Sairaj Dhond – Founder & CEO of Wakao Foods
“This budget places India firmly on the path of becoming a Startup Nation. It’s heartening to hear the word “startup” find at least 15 mentions in the Union budget speech. From an infrastructure boost to easing tax burdens, this budget has proposed more benefits for Indian startups than most others in the past. Certain path-breaking initiatives like the proposed seed fund to support ideation and development of early-stage startups, an extension of the tax holiday for start-ups by one more year, the incentivising the set-up of the one-person company by allowing them to grow without any restrictions on paid-up capital and turnover and the major infrastructural boosts, will prove to be a game-changer in the startup ecosystem.”
Krishna Gupta, Managing Director, 1441 Pizzeria
“The budget was very well balanced and looked at a lot of government spending to boost various segments in the country. A lot of the factors were looking at boosting confidence within customers for the service industry and helping brands like us to benefit from increased customer expenditure as well. We hope that the large sum allocated towards COVID-19 will help curb the spread and assist to normalize the country soon.”
Banwari Lal Sharma, CEO of CarWale & BikeWale
“Firstly, we would like to applaud the government for rolling out a budget that is progressive, remedy-inclined and development focused. The much-anticipated scrappage policy will give a boost to the automotive sector by generating demand for newer vehicles. This will curb environmental stress caused due to pollution in the long run and will also catapult the adoption of e-vehicles in the next 5 years.
Also, the vision of ‘Atma Nirbhar’ Bharat coupled with increased impetus on FDI will boost domestic manufacturing of automotive components in India. Allocation of funds on building rural and agricultural infrastructure will also trigger demand for automobiles in smaller and lesser connected markets. Furthermore, simplification of GST and the incentivization of digital payments will ignite the sector through means of customer confidence, convenience, and fair practices. Directionally, it’s a great budget as it has set the perspective for the coming years.”
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