Prologue: As part of our series focusing on the Union Budget 2019, we’ll be highlighting the opinions of industry experts and see what they think and expect from this year’s Budget. In this article, Manoj Barve, who’s a financial expert with over 30 years of industrial experience in Indo-German relations talks about his Union Budget 2019 expectations. Read on!
Union Budget 2019 – Expectations From Sectors And Industries
I believe the primary focus of the Government through this budget should be job creation and tackling the prevailing issues in the agricultural sector, especially the welfare of the farmers in the country. Apart from that, infrastructure will continue to receive significant attention in Union Budget 2019 and the Government will aim to ensure that it continues to perform well.
One key area that the Government will look to revive is the amount of private investments in the manufacturing sector, which have taken a dip in the past few years.
Budget 2019 – Job Creation Is Vital Via MSMEs And Start-Ups
I believe Budget 2019 will also be keen on creating jobs through MSMEs and start-ups, which will only be realized with an increase in the number of MSMEs and start-ups. I do not foresee large companies, MNCs and even the agriculture sector to contribute much in job creation.
Keeping that in mind, I believe start-ups can expect to receive more tax incentives. MSMEs, on the other hand, could expect major revamps in terms of working capital finance and investments, in the form of concessional funding from SIDBI and other Government banks. I expect the implementation of strict laws ensuring timely payments of MSMEs and keeping them motivated and monetized to continue their operations.
FDI Expectations And German Interest in India
I believe “Make in India” has not been as successful as it was predicted to be, largely due to lack of substantial benefits to increase FDI. Despite that, I am hopeful that the ease of doing business will continue to improve in India and I expect an increase in the funds coming from Germany in areas like engineering services, defence, infrastructure and capital equipment manufacturing.
With the growing middle-class population in India, the consumption of the economy is also going to increase. To cater to the growing needs of the middle-class, consumer products may experience an increase in FDI. Food products and pharmaceuticals are the other two industries that are expected to receive more FDI.
Speaking of Germany, I am not expecting much investment in food products and the pharmaceutical industry, requiring immense machinery for food processing and packaging. Consumer-driven products are expected to incur major investments. Even though the automotive sector has been experiencing a decline in the past few years, I am expecting upward projection in the coming years.
Personally, I am hoping and expecting changes in the e-mobility sector as we need to stop using ICE vehicles as early as possible. Secondly, sustainable energy is also expected to undergo major changes and I am hoping for better co-operation between Central and State Governments to bring about stable policies and work towards a better future for the country. Thirdly, waste management would be an area of focus considering the ever-increasing rise in consumption levels of the average Indian. Therefore, I am hoping for more foreign investment to enhance these industries in India.
Budget 2019 – Expectations Of The Common Man
Union Budget 2019 will most likely bring about some changes to the life of an individual taxpayer. As a matter of fact, long-term capital gains tax was reintroduced a couple of years ago at 10%, which was at 0% before that. I believe that 10%, though an increase from the earlier number is still a relatively low figure and the budget could bring about changes with respect to that to cater to the larger goal of more long-term investments.
Apart from that, the MUDRA loan has impacted people in retail, along with the people living below poverty line and in rural areas. In light of that, I am expecting better allocation in these areas.
Furthermore, the Government’s ‘Housing for All’ by 2022 could lay the foundation for the changes to come in the housing sector. The Government will be keen to provide incentives to enable housing for more people. As a whole, Budget 2019 will be focusing on reaching out to the poor of the nation. I am expecting an inclusive budget which will focus on alleviating the problems of the poor and the urban poor and I do not foresee any major benefits for the upper middle-class of the country.