Budget 2019: BFSI Industry Outlook


Budget takes into account real issues faced by budding enterprises

Lizzie Chapman, ZestMoney

The budget takes into account real issues being faced by the budding enterprises, and the measures suggested for GST are well received by the startup community.

With the increase in consumption of mobile data and the number of people who have joined the formal financial system, India is on the cusp of a promising future where the financial inclusion for everyone is not far. With AI and financial solutions that address the capital requirements of every Indian, we can make India a financial powerhouse.

Budget 2019 has given a huge boost to middle class population

Ramaswamy Venkatachalam, FIS

The Union Budget 2019-20 has given a huge boost to middle class population of the country by providing tax rebate to individuals earning up to Rs 5 lakh per annum. This will indeed persuade people to purchase more goods and services, which in turn will boost overall digital banking transactions. The government’s proposal to connect 1 lakh villages with digital services in the next five years will definitely drive financial inclusion in the country and boost digital banking in the economy. The JAM (short for Jan Dhan-Aadhaar-Mobile) trinity is already making good progress, and with this move we are at the cusp of a digital revolution that will create opportunities for Fintech companies. We are already witnessing a surge in digital payments in urban areas, the trend is likely to expand in remote parts of the country through easy availability of data services. The government has also envisaged to create a Digital India reaching every sector of the economy, every corner of the country and impacting the life of all Indians. We believe this budget has laid the foundation for the next digital uprising in the country.

Markets seemed to be satisfied with the fiscal prudence shown by the FM

Nikhil Mantha, Piggy


Markets seemed to be satisfied with the fiscal prudence shown by the FM especially before elections with fiscal deficit target being 3.5% and Current Account deficit target being 2.5% of the GDP in line with expectations. Though the final mathematics of expanding benefits and foregoing taxes remain to be seen. Biggest plus is introducing the Rs.3,000/month pension scheme for the unorganised sector. Also positive steps taken for Agriculture with the interest rate subvention and Rs.6,000/year direct benefit to farmers with upto 2 hectares land. The budget seems to have covered major constituencies of Farmers, SMEs and Middle class. Yet I feel not enough was done for job creation and to boost our crumbling industrial infrastructure.


No clarifications on Angel tax was disappointing. But the increased focus on AI from announcement to launch a National Artificial Intelligence (AI) Portal is a step in the right direction. AI will have a major role in disrupting multiple Industries and as a nation it is important that we understand it’s significance and take steps to promote innovation in it.

Taxation and Middle Class Benefits

Welcome move by the FM to give tax breaks to people with income upto Rs.5 lakh and effective income of Rs.6.5 lakh taking section 80C into account. Also increase in standard deduction to Rs.50,000 and exemption on interest income on savings to Rs.40,000 are a big plus. This will go a long way in boosting consumption in the economy. No sops for mutual funds though which is a little disappointing.

Gaurav Gupta, MyLoanCare

Budget 2019 was an opportunity for the government to provide the much-needed relief deserving sections of the society and it lived up to the expectations by rolling out many such measures in today’s budget. The tax payers finally earned praise and reward of their contribution to nation building as the government increased the income tax exemption limit to Rs 5 lakh and an increase in standard deduction limit. Similarly, the farm sector has been extended direct income support, the GST compliant MSMEs get easy access to loans and the unorganized sector has now been covered under a pension scheme, the first of its kind in India. The real estate sector and home buyers can cheer for measures such as capital gains tax exemption on gains of upto Rs 2 crore even if sale proceeds are invested in two properties and extending the tax exemption on notional rent on unsold real estate inventory to two years instead of 1 year earlier. The budget also highlights government’s commitment towards rapid digitalization, online economy and simplification of tax procedures which should further improve ease of living and ease of doing business in India. Though the fintech sector wasn’t a prime focus as it has always been over the recent years, we are of the view that fintech-centric collaborations will also be announced during the full budget later this year.

We feel that the budget had all the positive notes and is a step forward in the right direction.

Banking reforms have yielded good outcomes

Dharmesh Kant, IndiaNivesh

Considering the fiscal situation, the budget announced today is a very good one. Provisions with a major focus on rural per capita income growth (doubling by 2022) will be good for many sectors including FMCG, Automobile, particularly tractor makers, domestic appliances makers, electric and electricals, white goods, and television makers, among others. The direct benefit transfer to vulnerable farmer families a big positive. An outlay of Rs. 20,000 crore for the current year and Rs. 75,000 crore for 2019-2020 will boost consumption from this segment in a big way.

Banking reforms have yielded good outcomes with over Rs 3 lakh crore being recovered. From what has been presented more banks will now come out of PCA, which is a big positive for PSU banks. The confidence on recovery of NPAs by banks should see banks like Bank of India, PNB, Syndicate and Union Bank as good stocks for accumulation.

The impetus on rural infrastructure development – roads, affordable housing, schools, electricity, healthcare – are good propositions. Infrastructure companies like NBCC, Housing Finance companies with a focus on affordable housing and pharmaceutical companies with a focus on the domestic market will benefit.

Low inflation, fluctuating IIP/Core sector growth lays down a strong case for interest rate cut by RBI in its forthcoming policy. Given these facts, one could expect a repo-rate cut of 25 basis point in the February monetary policy meet of the RBI. Fiscal deficit will not be a concern for the rate cut. In fact, a rate cut will enable bringing down Fiscal deficit.

Since the economy is on the mend as evidenced by Coal, Steel, Cement & Electricity production data in FY2019 so far, any incentive by way of lower cost of funds will bolster this foundation. Among other measures, the interest subvention of 2% to MSMEs on loan ticket size of less than Rs. 1 crore is a step in the right direction. Also, an increase in defence budget to Rs. 3 lakh crore for FY20 is good for focussed companies like BEL, L&T, Astra Micro.

Budget 2019 has provided several direct and indirect benefits to the real estate sector

Ravinder Sudhalkar, Reliance Home Finance, Co-Chairman of ASSOCHAM National Council Committee on Real Estate, Housing & Urban development.

The Interim Budget 2019-20 has provided several direct and indirect benefits to the real estate sector, especially to affordable housing. For home buyers, the tax exemption of Rs 5 lakh, which benefits over 3 crore taxpayers, will now enable many households to invest their surplus income into housing. More direct benefits for home buyers are in the form of exemptions of Capital Gains tax of up to Rs 2 crore on investment in a second home. It is also heartening that the government is considering reducing the GST burden on home buyers and have recommended the GST Council to appoint a Group of Ministers to take a decision on the GST rates at the earliest. There are many benefits for builders as well in the Interim Budget proposals. Extending the benefits under Section 80-IBA of the Income Tax Act for one more year, i.e. to the housing projects approved till 31st March, 2020, will provide relief to the builders operating in the affordable housing segment. The burden on the real estate sector due to unsold inventory will also reduce with the decision to extend the period of exemption from levy of tax on notional rent, on unsold inventories, from one year to two years.