Budget 2019 Expectations: Challenges before PM Narendra Modi, FM Nirmala Sitharaman
Lifting the GDP, rationalisation of the GST, the level playing field for the NBFCs and banks, incentivising digital transaction, etc. are the challenges that Modi 2.0 Government is facing.
The captains of commerce have listed the challenged ahead of the Budget 2019 towards the Prime Minister Narendra Modi and the Finance Minister Nirmala Sitharaman. The industry experts have said that lifting the GDP, rationalisation of the GST, level playing field for the NBFCs and banks, incentivising digital transaction, etc. are the challenges that industry insiders are expecting the Finance Minister to address in her maiden union budget that she is going to present in the parliament on July 5th.
Speaking on the challenges toward the Modi 2.0 government Thomas John Muthoot, CMD, Muthoot Pappachan Group said, "The challenge in front of the Central government will be to lift the GDP growth which is now projected at 6.6 per cent for FY2019-20. The key sectors of agricultural and manufacturing have contracted, the global environment looks fragile from both emerging political and economic factors." He said that a lot of hope is residing on this budget has given the dismal shadow cast on the NBFC sector. We are expecting significant measures towards incentivization, consolidation and sustainability, as that will give some impetus to spending in the domestic economy. Rural economy, particularly the agricultural sector, needs comprehensive measure like higher allocation for Kisan Samman Nidhi along with sustainable employment opportunities. There is a need to drive growth by enhancing private consumption through measures like policy rate cuts and direct tax sops. We are looking forward to measures ensuring that policy rate cuts benefits are passed on to NBFCs and end-consumers. There has to be a transparent, structured and process driven framework for NBFCs to be able to access credit from banks.
"We also expect GST rates to be rationalized, particularly from the insurance sector. There is a need to bring it down substantially, in the interest of improving insurance coverage. In addition to this, we are hopeful that the rationalization and reduction in Corporate Taxation will be executed,” said CMD of Muthoot Pappachan Group.
On his part, Dr. Arun Singh, Chief Economist at Dun and Bradstreet said, "Given the moderating investment demand and stress in the NBFC sector, big announcements for the BFSI sector are expected in the upcoming Union Budget." He said that as the credit supply of PSBs is affected due to provisioning for Non-Performing Assets (NPAs), the government is likely to propose recapitalization of Public Sector Banks (PSBs). "The budget may outline a plan for selling stakes in some PSBs and/or further consolidation in the PSB segment," said Dr. Arun Singh of Dun and Bradstreet.