union budget 2017 industry impact analysis

Perspectives

Union Budget 2017: Impact on industries

A breakdown of this year's budget vis-à-vis the industries

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Impact on Infrastructure

Infrastructure investment and development agenda has been one of the key priorities of the extant Government and the earlier budgets also focused on substantial outlay for infrastructure sector backed with policy announcements to address its key concerns. Budget 2017 continues to place emphasis on infrastructure development with an increased outlay of INR 3,961 billion. This Deloitte report analyzes the high budgetary allocations to the infrastructure sector, along with the additional measures announced to address some long standing issues in the sector.

Impact on Consumer Business

Budget 2017 would certainly increase the purchasing power of the rural population, with an impetus to bring more than 1 crore households out of poverty by attempting to increase their livelihood. Also, the disposable income of Indian consumer is likely to increase due to direct tax incentive in form of reduced individual taxes and reduction in corporate tax rates for small and medium players. Read this Deloitte India report to learn how the consumer sector will certainly benefit from these changes.

Impact on Manufacturing

In the past couple of years, the Government seems to be focusing on building a long term growth plan for the manufacturing sector by investing resources in infrastructure and rural market development. The finance budget 2017 provides for substantial allocation towards these areas.

Impact on Regulatory and Financial Measures

Union Budget 2017 is devised to boost transparency in funding of political parties and regulatory payment systems. Along with this, the new provision will also prevent generation of unaccounted money, broaden investment avenues of private trusts, and benefit the farmer community. In this report, Deloitte India analyzes the impact of Union Budget 2017 on various regulatory and financial measures.

Impact on Technology, Media & Telecommunications (TMT)

Digital economy being one of the key themes of the budget, large scale technology investments have envisioned to enable this paradigm shift. India’s TMT sector could be considered as the platform that will accelerate our country’s economic growth in the coming years. This Deloitte report analyzes how the overall direction for the TMT sector from the union budget is positive, given the focus on digital economy, built on digital transactions to broaden the tax base, and the opportunities for technology interventions across sectors such as infrastructure, financial services, education, healthcare, governance, and public services.

Impact on Financial Services

The Finance Minister seems to be rather pleased with the Financial Services sector this year. He has announced a few key reforms such as setting up the Long Term Irrigation Fund, Micro Irrigation Fund and Dairy Processing & Infrastructure Development Fund. Further, additional INR 80,000 million has been allocated to complete 10 million houses under the Pradhan Mantri Awaas Yojana – Gramin, increasing the total fund allocation to INR 230,000 million. Affordable Housing has been reclassified under “Infrastructure” and conditions for tax holiday for the same have been rationalised on a pan-India basis. On the stressed assets front, legal framework has been strengthened and INR 100,000 million has been set aside to re-capitalise banks to deal with stressed assets. On direct tax front, taxation of JDA has been streamlined. Read this Deloitte India report to learn more about the budgetary announcement's details for the Financial Services sector.

Impact on Energy & Resources

Given India’s dependence on Oil & Gas, the Government has taken several steps to increase domestic production of Oil & Gas and secure resources abroad for energy security. Deloitte India's budget analysis looks at the steps indicated by the government such as creation of an integrated oil company, reduced basic customs duty (BCD) on LNG from 5% to 2.5%, commitment to achieve 175,000 MW of Renewable Power capacity by 2022, among others, which highlight substantive promises to the energy and resources sector.

Impact on Life Sciences & Health Care

The Indian Union Budget 2017 was tabled in Parliament on 1 February 2017. At the outset, the Government has acknowledged the need to amend the Drugs and Cosmetics Rules to get drugs at reasonable prices and promote use of generic medicines. The Government also proposes to formulate new rules for regulating medical devices which will attract investments and reduce the cost of such devices. Read this Deloitte India report to learn more about the budget's imapct on the life sciences and health care sector in India.

Impact on Foreign Portfolio Investment (FPI)

Allowing foreign portfolio investors to directly access bond trading platforms, the government and corporate paper will increase the investor base. Deloitte India's budget analysis explains how this step is likely to push FPI inflows.

Economic indicators for Foreign Portfolio Investment

India continues to clock high growth rate despite demonetization and global slowdown. The Finance Minister of India presented the Economic Survey for the year 2016-17 in the Parliament today. In this report by Deloitte India, learn about the key economic indicators relevant for FPI.

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