The Union Budget 2021-22 drew mixed responses from the corporate sector. While it was largely welcomed by India Inc, which termed it a ‘budget for growth’, sectors such tourism and telecom expressed disappointment that their concerns were not addressed. Analysts too pointed out that the Budget does not provide any specific support for sectors stressed due to the pandemic.
The two major industry bodies — CII and FICCI — hailed the Union Budget. Uday Kotak, President of CII, said the Finance Minister delivered on her promise of unveiling a ‘Budget Like No Other’, adding that she had announced a “raft of prudent measures aimed at rejuvenating government spending towards critical areas of increasing allocation on infrastructure expansion, education, housing and health as India rolls out a vaccine drive to inoculate 1.3 billion people.”
Likewise, Uday Shankar, President, FICCI said, “Today we saw an outstanding, clear-headed and growth-oriented budget that lays a strong foundation for an Atmanirbhar Bharat. The fact that the government chose growth over fiscal consolidation is indeed heartening. There is a sharp focus on capital expenditure.”
Meanwhile, various tourism-sector related industry bodies such as Federation of Associations in Indian Tourism & Hospitality (FAITH) and Indian Association of Tour Operators, expressed “deep disappointment” on the lack of immediate direct support for the sector, which has been one of the worst hit by the pandemic.
“The tourism, travel & hospitality industry was looking at support for immediate and short-term measures for critical revival. This has not happened in the budget announcements,” FAITH said, adding that many infrastructure proposals may boost tourism over the long term, after their implementation.
Likewise, while welcoming the budget as pro-investment, the Cellular Operators Association of India (COAI) said they are a bit disappointed that concerns of the telecom sector, which is the backbone of digital India, remained unaddressed.
“We were expecting a reduction in the burden of levies, such as LF and SUC on the telecom sector. The government has also not considered the request of the industry to exempt GST from the payment of government levies such as LF, SUC and spectrum installments etc. As the telecom operators are going to launch 5G services in the country, it is imperative that 5G enabled telecom equipment are available to them at a reasonable price. Thus, there was the need for a reduction in customs duties on telecom equipment,” Lt. Gen S.P. Kochhar, DG, COAI said.
Abheek Barua, Chief Economist, HDFC Bank noted that the Budget does not adequately address concerns over inequitable growth which has been a worry across the globe due to the pandemic. There has been no specific support for sectors stressed due to the pandemic like the hospitality sector.
“While the government did not increase any direct taxes, as some sections of the market feared, there has also not been any cushion provided for households — especially in the informal sector that has been hit the most by the pandemic. Therefore, while the budget focuses towards pushing the long term growth potential it does little to prevent a K-shaped growth recovery,” he said.