On Wednesday, the High Commission of India, in collaboration with the Confederation of Indian Industry (CII) welcomed senior representatives from the UK businesses and corporate houses operating in India, UK government and media to listen to “India Budget Analysis – A Briefing for the UK Business Community” in the Ambedkar Hall at India House. HE Navtej Sarna introduced the panellists, Ibukun Adebayo, co-head for emerging markets at the London Stock Exchange who chaired the session; Prashant Jhawar, chairman CII India business forum, UK, and also the chairman of Usha Martin. Also present were Phillip Bouverat, director, JCB, John Copley, SVP strategy director and future programmes at Rolls Royce Aerospace, Anuj Chande, partner and head of south Asia group-Grant Thornton and, Deepak Lalwani OBE, chairman, Lacap.
Before their commentary, Adebayo asked the panel to rate the 2016 Budget out of ten, the arithmetic meanwas 7.5/10. The panellists were encouraged by the systemic reforms, the previous liberalisation of FDI and impressed by the smart move de-linking financial reforms from the Budget. Adebayo admired the relaxation of taxation in key areas and the ability for direct investment in insurance. Lalwani said if the fiscal discipline was strictly adhered to it would be a good signal to foreign investors and the signals of accountability were wonderful, as was the positive step of linking of e-commerce to markets. Bouverat said JCB is the poster boy for Make in India and he complemented the Budget as having something for everyone and said that Prime Minister Narendra Modi had found his stride and done a tremendous job but the sums were huge and everyone had to help the government of India make the sums available to the fund managers through the Indian Stock Exchange. Chande likened the Indian economy to an oil tanker that takes a long time to turn around. He praised the incremental structure of the Budget and hoped the rural focus would attract the private investor. Chande doubted the readiness of corporations coping with the GST policy by April 2017. Copley remarked that it was very important for all of India to progress at the same time, this Budget contained helpful reforms to the banking sector and was pragmatically balanced towards long term stability. Copley hoped that civil aviation would build regional connectivity by investing in unused airports. Jhawar gave the highest rating to the budget insisting that big-bang reforms are not part of a financial exercise, the Nine Pillars statement is very important as it means the government is offering to be measured. He said the transformation of a rural population of 6 billion people and the rural economy was the market to be catered for in 5-10 years. Lalwani feared that banking was a civil crisis and the recapitalisation proposed (Rs 25,000 crore) was insufficient, that it would take at least Rs 44,000 crore. This despite the RBI allowing banks to revalue their premium properties, such as Nariman Point, he said the property values would increase by 100’s but it still would not be enough. The big reform greatly anticipated to raise capital was the offshore Rupee aka The Masala Bond.The panel concluded that incentives for R&D, the health sector, the defence sector, Make in India, measures for addressing retrospective tax were not addressed and there was not adequate initiative on how to kick start private investment.