Post-Budget sectoral PoVs | KPMG | IN

Post-Budget sectoral PoVs

Post-Budget sectoral PoVs

Post-Budget sectoral PoVs

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Building, Construction and Real Estate

The Indian economy is among the fastest growing economies globally. The GDP growth in Financial Year (FY) 2016-17 is projected to be 7.1 per cent, a tad slower than last year due to the effect of demonetisation. However, the real estate and construction sector - a pivotal cog of economic growth for India - has witnessed subdued growth over the last few years.

But for now, we are delighted as affordable housing grabbed centre stage in Union Budget 2017. Several measures to augment the supply of low-cost houses were announced with one of the most prominent being the granting of infrastructure status to the affordable housing sector. On the flip side, not many incentives were announced to support housing demand, commercial real estate and REITs.

Overall, the budget is pragmatic, growth-oriented and promotes ease of doing business in India. Overall, one can sense the good intentions behind the Budget provisions and the direction that it seeks to provide to the economy.

Against this backdrop, we present to you our in-depth analysis of the key budgetary proposals impacting the real estate sector. We hope you find this report useful.

Download POV (PDF, 651KB)

 

Consumer Markets

The eagerly-awaited Union Budget 2017–18 post the government’s demonetisation move has been perceived to be broadly in line with the expectations. Presented with a ‘Transform, Energise and Clean India’ agenda, the Budget announcements were segregated under 10 broad themes with a primary focus on agricultural economy and rural infrastructure.

The Budget focusses more on prudence instead of populism, and is thus considered growth-oriented and progressive. It supports the cause of manufacturing within the country, creating a conducive environment for business and improving the transportation infrastructure. Further, it has increased the focus on farmers’ income and agricultural productivity, upskilling the rural population, developing basic infrastructure, reducing individual tax rates, supporting Micro, Small & Medium Enterprises (MSMEs), and augmenting digitalisation, aligned to the country’s growth targets.

Overall, the government has driven its agenda on financial inclusion and economy’s long-term growth further through the Budget. Against this backdrop, we present our ‘Point of View’ of the key budgetary proposals affecting the Consumer Markets sector. We hope you find the in-depth analysis useful.

Download POV (PDF, 553KB)

 

Education

Education (PDF, 694KB)

 

Energy and Natural Resources

Against the backdrop of the demonetisation exercise and the debate around its impact on the economic growth, a sluggish pick up in the industrial activity, and the lack of private sector investments, the Finance Minister presented this year’s Budget on 1 February 2017. He presented the Budget around 10 key themes essentially centred around transformation, energising, and the clean India vision. Given the conflicting demands, and need to manage the fiscal prudence, there was not much room left with the Finance Minister to do a lot for the energy sector

Therefore, the focus has been on increasing and securing the supply of energy to meet the ever rising demand from one of the fastest growing emerging economies in the world, and build on the country’s commitment to increase the consumption of clean energy. We were hopeful of concrete steps towards addressing the high amount of stress in the thermal sector with its cascading impact on investments and capacity creation, especially when the Economic Survey released a day earlier did cover at length the alarming rise in Non-Performing Assets within the banking system. However, we did not see that happen. We do hope that going forward we will see a number of key policy initiatives by the Ministry as these can very well be undertaken outside the Budget.

Download POV (PDF, 480KB)

 

Financial Services

‘Transform, Energise and Clean India (TEC India)’ has been the stated theme of the Union Budget for 2017–18. In the backdrop of global, political and economic uncertainty and new challenges to globalisation, the Budget highlights India as a bright spot on the global economic map.

The Budget proposes a slew of measures for the government’s stated 10 themes of increasing farmer incomes, rural employment, energising the youth, strengthening the underprivileged, infrastructure, growth and stability of financial sector, digital economy, effective governance in public services, prudent fiscal management and tax administration.

The Budget is directed at furthering the government’s commitment to the eradication of black money and expansion of the tax base, extending digital reform, ease of doing business and simplification in governance.

The budget is realistic, growth-oriented and forward looking with an aim to revive rural economy, contain fiscal deficits and boost economy’s long-term growth potential. Against this backdrop, we present to you our in-depth analysis of the key budgetary proposals impacting your sector. We hope you find this report useful and insightful.

Download POV (PDF, 377KB)

 

Healthcare

The eagerly-awaited Union Budget 2017–18 has many proposals for the healthcare sector, including the much-needed increase in allocation to healthcare by 23 per cent. The Budget has focussed on healthcare development for the under-privileged and the bottom-of-pyramid section of the society.

This year, the Budget has envisioned a plan to eliminate certain communicable diseases and reduce IMR and MMR. The government has also given a thrust on reducing the cost of drugs and medical devices. Two new AIIMS and the addition of 5,000 PG medical seats are steps in the right direction to make tertiary care as a prime focus area. However, the long-awaited UHC plan and infrastructure status to the healthcare sector has remained obscure.

Against this backdrop, we present to you our in-depth analysis of the key Budget proposals impacting the healthcare sector. We hope that you find this report useful.

Download POV (PDF, 335KB)

 

Industrial Manufacturing

The Indian manufacturing sector, despite the continuous effort of the government, has been facing the challenge of flat demand leading to poor investment activity. Amidst a muted global economic scenario, the Finance Minister Arun Jaitley presented a progressive Budget focused on a 10 point agenda. This aligns with the underlying ambition of the government to transform India into a manufacturing hub by improving the country’s infrastructure and ease of doing business. Several key proposals that were announced are aimed at rural development and making India a ‘less cash’ economy, which in the long run is likely to have a positive impact on the sector.

The Budget 2017 is a fine balancing act of three aspects: growth impetus, economic prudence and digitisation. Overall, one can sense the good intentions behind the Budget provisions and the direction that it seeks to provide to the economy.

Against this backdrop, we present to you our in-depth analysis of the key budgetary proposals impacting your sector. We hope you find this report useful.

Download POV (PDF, 584KB)

 

Life Sciences

The Indian life sciences sector is at crossroads, on one hand there are increasing lifestyle diseases and a fast-improving awareness about health, and on the other hand we have a sector facing intense competition, rising prices and regulatory pressure both in the domestic and international market. Life sciences had great expectations from the Budget not only from the fiscal incentives perspective, but also from a regulatory angle, given how crucial the sector is to healthcare and also to the overall economic development in the country.

In line with the move to eradicate certain diseases, while the proposal to set up two new AIIMS, additional post-graduate medical seats, amend the Drugs and Cosmetics Rules and establish new rules for medical devices are welcome, the Budget has not specifically addressed the sector’s imminent challenges.

Against this backdrop, we present to you our in-depth analysis of the key Budget proposals impacting the life sciences sector; we hope you find value in the report and also look forward to your feedback and suggestions to help us constantly improve and innovate.

Download POV (PDF, 576KB)

 

Private Equity

The high growth trajectory of the Indian economy is expected to take in a correction in FY16-17 on account of the transient effects of the government action on remonetisation. As per IMF projections released earlier in January 2017, GDP growth in Financial Year
(FY16-17) is projected to be 6.6 per cent, a 100bps reduction from the earlier forecast of 7.6 per cent. The overall Indian economic story remains strong and resilient and the IMF expects the GDP growth to catch up with its earlier projection of 7.7 per cent per annum in FY18-19.

With a view to keep India moving firmly on its growth path, Finance Minister (FM) Arun Jaitley, presented a progressive Budget that is a fine balancing act of three aspects – fiscal prudence, electoral populism and growth impetus. The Finance Minister eased investor concerns by not tinkering with the holding period of listed securities for long term capital gain calculations and also assured the investor community that further tax clarifications and pro-investor policies are expected to be announced in the near future.

Overall, Budget 2017 has managed to allay a lot of investor concerns and the FM’s messaging seems to indicate that more clarity over challenging tax and regulatory matters is in the offing. We believe this will enhance investor confidence and build on the investment momentum. Against this backdrop, we present to you our in-depth analysis of the key budgetary proposals impacting the private equity and venture capital sector. We hope you find this report useful.

Download POV (PDF, 247KB)

 

Technology

The Indian economy is on a high growth trajectory. The GDP growth in Financial Year (FY) 2017 is projected to be approximately 7 per cent. India is on the cusp of a massive digital revolution and this is the reason why ‘Digital Economy’ featured as one of the main themes of the Union Budget 2017-18 proposals. With India moving firmly on its growth path, Finance Minister Arun Jaitley presented a progressive Budget focused on a 10 point agenda. Several key proposals that were announced can contribute to the technology sector’s increased participation in the government’s agenda of building a cashless India. The budget is pragmatic, growth-oriented and promotes the ease of doing business in India. Overall, one can sense the good intentions behind the Budget provisions and the direction that it seeks to provide to the economy.

Against this backdrop, we present to you our in-depth analysis of the key budgetary proposals impacting the technology sector. We hope you find this report useful.

Download POV (PDF, 289KB)

 

Tourism and Hospitality

India continues to be one of the fastest growing large economies worldwide, with an expected GDP growth of 7.6 per cent in FY18, according to the World Bank. Amid such high prospects and correspondingly higher expectations from the country, the Finance Minister Arun Jaitley presented a progressive Union Budget for the upcoming fiscal year — announcing some key proposals with an agenda to ‘transform, energise and clean India’.

Recognising the significance of the tourism sector as a key generator of direct as well as indirect employment in the country, the government announced two key measures to promote the sector: the development of five special tourism zones in partnership with the state governments, and the launch of the ‘Incredible India 2.0’ campaign to promote Indian tourism globally.

Against this backdrop, we present to you our in-depth analysis of the key budgetary proposals impacting your sector. We hope you find this report useful.

Download POV (PDF, 572KB)

 

Transport and Logistics

The transport and logistics sector has demonstrated growth in the past year in the backdrop of a challenging global economic situation. Continuing on the reform agenda, the Union Budget 2017‒18 is built on forward-looking themes to spur economic growth and provide a strong impetus to the sector.

The Union Budget laid focus on infrastructure development as one of the key themes, with the total outlay for transport infrastructure increasing by about 10 per cent to INR 2.4 lakh crore in FY18.

The transport sector, roads, rail, aviation and ports are all likely to benefit from the positive economic outlook facilitated by enhanced investment in infrastructure, focus on improving rural India, Ease of Doing Business, ‘Make in India’ related initiatives, implementation of GST and a more stable and predictable tax regime assured by the Finance Minister.

Against this backdrop, we present to you our analysis of the key budgetary proposals impacting the transport and logistics sector.

Download POV (PDF, 789KB)

 

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