Budget to spur consumption, drive growth: Britannia chief

Bengaluru: The Union Budget for 2018-19 provides a springboard to spur consumption and lead to faster growth across sectors, said FMCG major Britannia Industries MD Varun Berry on Friday.

“As the Budget is focused on infrastructure, rural development and huge employment generation, it becomes a springboard to spur consumption and lead to faster growth across sectors,” he said in a statement here.

With the expenditure projected to grow at 10 per cent during the year, Berry said development spending was expected to grow faster at 13-14 per cent, especially on affordable housing at 30 per cent and railways at 22 per cent, and these sectoral spends could generate huge employment, “resulting in a healthy and sustained consumer economy”.

Noting that corporate tax reduction to 25 per cent from 30 per cent for MSMEs with up to Rs 250 crore annual turnover, would have a positive impact on the industry growth trajectory, Berry said large companies, however, would have to wait longer though they account for about 90 per cent of tax collection.

“The government’s resolve to improve tax compliance is bearing fruit, as evident from the personal tax collection contributing 3.3 per cent to the GDP, which is more than the corporate income tax at 2.8 per cent of the Gross Domestic Product,” he said.

Berry however said that the proposed increase in Minimum Support Price (MSP) by 1.5 times will improve farmers earnings but may lead to unidentified inflation if it is not carefully managed.

Intuit India Managing Director Nikhil Rungta said the 5 per cent reduction in corporate tax would allow MSMEs easier access to working capital needs.

“MSMEs are the major engine of growth and employment generation. The Budget provides them easier access to working capital needs and highlights the role of online fintech lending firms,” said Rungta in a statement.

With the Goods and Services Tax (GST) coming into force since June 1 last year, Rungta said the MSME sector was still adapting to the next tax regime.

“Of the 51 million SMBs (small and medium businesses) across the country, about 20 per cent of them are digital-savvy. As the government is supportive of making the country digitally tax-compliant, the Budget will help the SMBs adopt better fintech solutions,” he added.

L&T Infotech Chief Exeuctive Sanjay Jalona said the Budget gave emphasis on healthcare, agriculture, education and research.

“Use of technology in delivering education and focused research in technologies like Blockchain, AI, Big Data, IoT and Robotic will create opportunities for the IT sector to contribute in making of a new India,” he said in a statement here.

Jalona also said that the return of long-term capital gains was anticipated and the Budget has brought it in a calibrated manner, adding that it was “overall a good Budget, (but) the execution remains key and to be watched for”.