Experts decode Budget 2018 at 'CNBC-TV18 Mint Budget Verdict'

Just a day after Union Budget 2018-19, leading economic and financial stakeholders came together for the third edition of the ‘CNBC-TV18 Mint Budget Verdict’, decoding the biggest economic policy event in the country.

A special keynote address by Piyush Goyal, Minister of Railway and Coal, set the tone for an engaging and holistic discussion.

Joy Chakraborthy

Joy Chakraborthy, President, Revenue, TV18 & CEO Forbes India, said, “The budget has focused on the right areas, particularly the rural sector, which is definitely going to spur demand in time to come. I feel the announcements have been in line with the expectations considering it is the last big policy measure before the critical Lok Sabha elections next year. CNBC-TV18 has always played an instrumental role in driving discussions around this event and this year is no different. Our flagship budget initiative 'Budget Verdict' once again saw relevant and hard-hitting conversations between policy makers from the government and corporate chiefs. Over the years, this property has evolved as the first big stop for post-budget discussions.”

Policy architects and key budget makers who were present included Jayant Sinha, Minister of State for Civil Aviation; Hasmukh Adhia, Finance Secretary; Neeraj Kumar Gupta, Secretary, Department of Investment and Public Asset Management; Subhash Chandra Garg, Secretary, Department of Economic Affair; Ajay Narayan Jha, Expenditure Secretary; Ramesh Abhishek, Secretary of Department of Industrial Policy and Promotion & Amitabh Kant CEO, NITI Aayog.

CNBC-TV18’s Managing Editor Shereen Bhan and Mint’s Executive Editor, Anil Padmanabhan moderated the panel.

Key insights shared by the speakers:

Jayant Sinha, Minister of State for Civil Aviation

• Taxes always do a balancing act between revenue collection and impact on economic growth
• A big positive is that LTCG tax levy is not retrospective; have provided an exemption of Rs1 lakh in LTCG tax to protect a large number of middle-class investors
• LTCG tax targets a large pool of untaxed profits
• Seaplanes for medicine and tourism an exciting opportunity for aviation sector
• Government keen on improving capacity in aviation through next-gen airports
• Idea is to build airports now, when cost of building airports is not as costly as it will be in a few years
• Commercially viable airports will see more private sector partnership and will be more open to private sector for both building and operations
• Air safety is our number 1 consideration, have taken many steps to improve air safety in the last few years
• Privatisation of Pawan Hans is moving faster than Air India privatisation; expecting bids for Pawan Hans, will be a full-scale privatisation
• On Air India privatisation: The info memorandum will be out in a couple of weeks
• Expect to have a winning bidder for Air India by end of June; winning bidder may take an additional four to five months to get clearances, finish closure process
• Strategic privatisation of Air India will mean private operator will unlock value, help taxpayer unlock value
• IndiGo, Vistara-Tata the only ones to have evinced public interest for Air India so far
• Investigative agencies working on investigating people responsible for losses suffered by Air India
• Air India privatisation will involve sale of four separate entities; one entity will hold AI, AI Express, AI-Sats and another will contain the ground handling agency that operates at airports
• Government has decided that as a policy PSU banks should remain in the public sector for the time being
• Planning for implementation of UDAAN-3 is already in process
• Wi-fi on flights over Indian airspace becomes a reality soon

Piyush Goyal, Minister of Railways and Coal

• No proposal to increase railway tariff at present; meeting Rs 2lakh crore revenue target possible for the railways
• Mulling to provide flexibility to get more people to invest in railways
• May do some bond issuances if the market is stable; a little more liquidity could be injected in the bond market
• Last two pay commissions have affected railway finances significantly
• Capex plan for railways has tripled in 2018
• Cannot wait for makeinindia to place orders for steel; will place orders internationally and then create market for makeinindia
• Little bump up in cost of capital will not be determining factor for investors
• There is a mindset change in the top leadership at the Railways
• UDAY has resulted in losses of discoms coming down 50%; Discom losses down from Rs 75,000 crore. to Rs 25,000 crore since UDAY
• Want to ensure housing for 1.3 million Railway and Coal India workers

Amitabh Kant, CEO, NITI Aayog

• Health cess should take care of financing National Health Scheme this year. But the challenge is not in financing national health scheme; It's in achieving perfect implementation
• It will take five to six months to crack and roll out national health scheme; it will be a paperless, cashless scheme
• Primary healthcare is truly the biggest concern of the Government
• Challenge in minimum support price (MSP) hike is that agriculture is a state subject and that different states have different models to support farmers
• Will study different farmer support schemes and models to ensure farmers get higher MSP; hope to have a solution on implementing MSP hike in next three to four months
• Big challenge in agriculture sector is that this sector is riddled with middlemen; must eliminate them in agriculture for benefit schemes to have real impact

Hasmukh Adhia, Finance Secretary

• Many employees don’t get transport and medical allowance
• Agree relief to salaried people has been marginal; in future will give relief to salaried people
• Idea of Long-Term Capital Gains tax is to not leave one class of asset without tax; have given protection of Rs 1 lakh to retail investors
• Even 10% LTCG tax is substantially lower compared to tax on other investment classes
• E-way bill delay sign of flexibility in the GST Council; too much overload on the e-way bill system
• When we reduce rates from 28-18%, we believe compliance will go up; It is possible to bring a three-rate structure
• Could think about moving cement and paint lower depending on revenue
• Inevitable to tinker with tax laws because of need to plug loopholes
• Biggest risk to budget is oil prices; reduction in oil prices came to our help in 2015-16
• GST revenue can give us bonanza but need to fix technical issues

Subhash Chandra Garg, Secretary, and Department of Economic Affair

• We don’t believe in saying cryptocurrency, they are crypto-assets; Finance Minister said we will not allow use of crypto-assets in payment systems
• No legal statutory KYC requirements for crypto-assets; Need to move to a system of regulation for crypto exchanges
• We hope for final recommendations on crypto-assets this year
• Spike in yields based on lack of understanding of budget changes
• Have formalised debt rule of 40% as recommended by NK Singh MP Panel; Arvind Subraman pointed out that real interest gap is widening
• Small proprietors have not been notified of Insolvency and Bankruptcy Code

The channel shared their in-depth analyses on some big-ticket announcements that focused on the rural economy, among other important issues.

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