(MENAFN - Khaleej Times) The non-resident Indian community in the UAE welcomed the interim budget presented by newly-appointed Finance Minister Piyush Goyal as a smartly-balanced election-year budget envisioning a totally re-imagined 'Nava Bharat' by 2022.
While there was virtually nothing in the budget for NRIs to cheer about, they have been almost unanimous in voicing support for proposals on sharp income tax reduction and a spate of other pro-middle class and agrarian-friendly measures the government seeks to implement.
NRIs seem to have been equally impressed by the grand blue print for economic growth for the sixth largest global economy over the next eight years. The promise that the nation's GDP would grow two-fold to $5 trillion in five years and further steam ahead to hit $10 trillion in another three years is an ambitious but highly possible target as some of the prominent NRIs like to believe. They believe that Modi government has twin challenges to tackle: Ever increasing unemployment in the country and the agrarian crisis. As per the National Sample Survey Organisation's Report, India faces the gravest unemployment rate of nearly 6.1 per cent, the highest in 45 years. They feel disillusioned as the government could not deliver its 2014 pledge of creating 20 million jobs every year, and prepare India as the home for the largest labour force globally in seven years. "Having not been able to deliver what was promised in 2014 would become a major political battle for the ruling NDA front in the upcoming election. As long as the political parties walk their talk with utmost sincerity and commitment to uplift India, there is a bright future for India," said a Dubai-based senior accounting professional.
Meanwhile, increasing exemption limit for income tax up to ?500,000 will help over 30 million people in saving on taxes. Considering second house as self occupied and not including it for notional rent is a critical step. Allowing developers two years' time after completion to levy notional rent is another significant thought. As a long time NRI, I get inspired by the strong positive vibe, which India generates from various countries. As an active investor in India, the current budget and its details give me immense confidence in Narendra Modi's leadership and dedication in taking the country forward. This very confidence has made me invest significantly in India, especially in the sectors of healthcare and education.
Following are excerpts from reactions of a cross-section of prominent NRIs:
Promoth Manghat, executive director and CEO at Finablr and group CEO at UAE Exchange: For the most part, the 2019 interim budget can be described as an inclusive one in terms of its focus on the middle class, the rural population and the farming sector. The budget clearly seeks to stimulate domestic consumption as a means to boost economic growth and the various outlays and income tax concessions announced will be beneficial in this regard. It is also encouraging to see the 'Vision 2030' programme, which amongst other things focuses on infrastructure, digitisation and rural industrialisation.
Dr Ram Buxani, chairman of International Traders:Finance Minister Piyush Goyal has very successfully presented the final balance sheet of the present government promising end of the term bonuses for the tax payers. Very well-balanced presentation. Income tax relief up to ?500,000 is a good move. It would have been better if reliefs were included in the overall limit.
Mohan Valrani, senior vice-chairman and managing director of Al Shirawi Group: India is on the right track. It is heartening to note that India is poised to become a $5 trillion economy in the next five years and $10 trillion economy in the next eight years. Emphasis on cleanliness and sanitation by the Modi government in the last five years is finally producing good results.
Rizwan Sajan, founder and chairman of Danube Group: The last budget of the current BJP-led NDA government before 2019 general polls looks positive and will help to address the challenges faced by the agrarian sector, stimulate consumer demand and thus propel greater investments and higher growth. With simplified tax structures and an easy tax administration it would be easier and faster for brands to enter in India and generate more business and provide employment opportunities.
Adeeb Ahamed, managing director, Lulu Financial Group and Twenty14 Holdings: The budget is conservative with no big-ticket changes, on account of it being an interim budget. Good emphasis has been given on the agro-economy, defence spending along with infrastructure and MSMEs. The most marked proposal in this year's budget was tax exemption for those earning up to ?500,000, which will stand in good stead with the larger population in India.
Suresh Kumar, chairman of IBPC amd founder mentor of Tricolour Values Group: This is a smartly-balanced budget. It is most friendly to the farmers, middle and lower income-earning Indians and the MSME, affordable housing and real estate sectors. Allocations have been substantially increased while targeting an acceptable 3.4 per cent fiscal deficit. The twin deficits of current account and budgets are manageable and credible. The boost to pensions and rural roads is timely. Overall the interim budget is pro-growth and healthily equitable. Contribution of ?100 per month for workers in the unorganised sector will benefit a large population of India. However, this budget has very little to offer for non-resident Indians.
Mahmood Bangara, chairman of ICAI Dubai: There are enough takeaways for lower- and middle-class income people who are at large getting the benefits by exempting tax on individual taxpayers having taxable annual income up to ?5 lakhs, increase in standard deduction of salaried person to ?50,000, exemption on levy of income tax on notional rent on a second self-occupied house, etc.
James Mathew, senior partner and group CEO, Crowe Mak in UAE and Oman: Increased government expenditures for farmers, defence, middle class, SCST community and unorganised workers will definitely increase the spending appetite which is good news for the MSMEs and SMEs. Presenting a wholesome and inclusive 10-dimensional vision for the nation, irrespective of the political affiliations, having a vision document for the nation is a welcome move.
Kamal Vachani, group director of Al Maya Group: A balanced interim budget. A number of social schemes announced by the finance minister are welcoming steps, which includes assured income support scheme for small and marginal farmers, new pension scheme, etc. Full tax exemption for incomes up to ?500,000 is a major step taken that will benefit middle-income tax payers in a big way. The other important steps are raising of standard deduction from ?40,000 to ?50,000, TDS interest limit from ?10,000 to ?40,000, capital gains exception available on two properties up to ?20 million, abolishing of custom duty on 36 capital goods are welcome steps.
Paras Shahdadpuri, chairman of Nikai Group of Companies: The Modi government has given an economic roadmap of 2030, but in the democracy of India, unfortunately no party can give a long-term vision. However, an attempt has been made by this government by giving 10 dimensions of their Vision 2030. This budget has shown further commitment to the cause of poorer section of our society.
Anuj Puri, chairman of Anarock Property Consultants: The interim budget was more or less a vote bank-facing exercise - an electoral pitch that drew attention to past achievements. Vote-bank directed announcements included benefits to 12 crore small farmers via credit of ?6,000 a year directly into their bank accounts, and also to 10 crore labourers by way of direct pension bonanza.
Naveen Sharma, director of internal audit at Al Shirawi Group: The finance minister hit a last ball six in the interim budget. The minister has announced a series of benefits including no tax on rental income of up to ?2.5 lakhs on a second house. Capital gain benefits under section 54 EC doubled to ?2 crores. The budget will increase purchasing power of the middle class, farmers, and the lower tier of the society. It will drive the Indian economy in a big way.
Nimish Makvana, honourary director of the Institute of Directors UAE Chapter: The finance minister has brought in many pragmatic initiatives in order to benefit the individual taxpayers. He has provided a tax relief to all tax payers on their taxable income, increased the standard deduction from 40,000 to 50,000, extended the self-occupied house tax benefit criteria from one to two, raised the TDS threshold on interest income up to 40,000, and provided a one-time benefit to invest capital gains for up to two houses. These measures will certainly alleviate the common problems faced by the taxpayers.
Krishnan Ramachandran, CEO of Barjeel Geojit: The finance minister has done a fine balancing act of maintaining the fiscal deficit at 3.4 per cent for 2019-20 and by providing liquidity to the farmers by way of direct income transfer of ?6,000 per annum and to the middle class employed persons by way of tax rebate on for taxable income up to ?500,000. These measures are likely to improve the disposable surplus to the common man thereby increasing their consumption and demand for products and services.
Raju Menon, chairman and managing partner of Kreston Menon: The interim budget 2019 is a feel-good budget and an inclusive one to accommodate every relevant sect of the Indian community. Keeping away the election and politics, it boosts farmers, salaried class and startups alike. The proposals to get urban infrastructure to villages was a dream for many years; now it is in the budget.
Sahul Agarwala, managing director of Sahul Group: With 2019 being an election year, there was an emphasis to provide relief to rural and urban middle class in the interim budget. While there were no specific measures announced for NRI/foreign investors in the budget, but stable regulatory regime, growing economy and strong fundamentals make India an attractive investment destination for both NRIs and foreign businesses. Healthcare and infrastructure continue to be focus area of the government, which will provide investment opportunities to businesses owned by NRIs based in the Middle East including the UAE.
Bharat Bhatia, CEO of Conares: The interim budget does not have any announcement for non-resident Indians. The elections are around the corner and the government's position is understandable. The only announcement that stood out in the infrastructure sector is the increase in funds for the rural parts of the country.
Joe Verghese, managing director, Colliers International India
If the government is looking for a silver bullet in an election year when the threat of 'jobless growth' is rearing its head, injecting liquidity into the real estate/ construction industry, the biggest generator of jobs the last 25 years, is one of the most viable options. An election year interim budget is normally not something that the industry looks forward to as its agenda tends to be election focused (at the cost of industry). The real estate industry is hoping that this year we are in for a pleasant surprise!
Aashish Agarwal, Head-Consulting Services at Colliers International India: The government has reiterated their commitment to electric vehicles, but the Budget remains silent on tangible steps to provide the supporting infrastructure to achieve the objective. Collaborative commitment of utilities, planning agencies and real estate developers will be required to ensure sustainable adoption.
Issac John Associate Business Editor of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE's mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.