Housing Development Finance Corporation chairman Deepak Parekh said for the first time in last 25 years the rate structure is so complex and those who are not saving anything and wanting to spend will get something more.

Parekh told CNBC-TV18 as savings rates are going down substantially, he is not sure whether the thrust is right.

He added, “First time in last 25 years we have the most complex rate structure. So, you have one rate structure for individuals and another for them and they can opt between the two. We have similar two regimes for companies - you can either chose this or you can chose that.”

Talking about tax benefits for individuals Dinesh Kanabar, CEO of Dhruva Advisors, said: “Clearly on the exemptions and deductions go away so your leave travel concession, your house rent allowance everything else goes way, LIC savings etc.

Ashok Wadhwa, Group CEO of Ambit, found it difficult to rate the Budget, he said: “The intention has to be to give the benefit but perhaps the outcome is not exactly that-- that is how I would place it at this point of time."

"You removed dividend distribution tax (DDT) which is great but it is not as if you are making a sacrifice on tax because you are going to collect more than that so don’t treat it as a sacrifice. Treat it as a simplification of legislation and something that foreigners wanted to get.”

“The best thing we have done is on the infra side related to the sovereign fund so that is the big one. If infra needed capital they have provided a natural incentive for infra projects to gain lots of capital,” Wadhwa added.

Sanjay Nayar of KKR India said, “There isn’t that much to play with, I had never thought there is going to be big bang reform because of the resource are very limited. If you just look at the resources that she is managing within there is a massive focus on what it looks like on farm, MSME, to the extent of infrastructure under the NIP plan and also a lot on the governance side."

"So, just from positive point of view if you look at these four areas there is a massive focus. What I liked about the Budget is that the 10 percent nominal growth was a very sensible and a very conservative assumption and that is why the deficit of 3.5 percent probably looks more real for the next year.”

Speaking about bond market reactions to Budget, Niraj Gambhir of Axis Bank said: “It is a bit of a sigh of relief for the bond market first of all with all the clamour for easing fiscal and doing a big bang sort of expenditure."

"The worry was what will that impact be on fiscal deficit. It feels like they have taken cautious approach there. 3.8 percent for this year, 3.5 percent for next year seems to be pretty much in line with what the bond market would have liked to see. In that sense per se, I think the bond market would possibly give a 5-10 basis point rally.”

Nirmal Jain, Founder & chairman of IIFL Group, said, “Expectations were very high and therefore market is a bit disappointed but there are lot of incentives for the foreign investors."

Dividend Distribution Tax (DDT) has been abolished and therefore obviously foreign investors will benefit but then it becomes fully taxable in the hands of shareholders which, he said, is not the right way of doing it because shareholders are also owners and as owners of company they pay tax on profits and it gets taxed again.

So, this might change the dividend culture of many companies, it will impact the private sector investment which has been very sluggish for the last 2 to 3 years at least, he added.

He further added: “The insurance stocks are down because of removal of deductions and exemptions for investment in insurance. On LTCG there were lot of expectations but that has not happened."

"Bond market if we see, most of the incentives are for the foreign investors but domestic savers, domestic entrepreneurs, domestic investment is a huge force and I wish that it was not ignored the way it has been. So, expectations were very high, vis-à-vis it has fallen short of many things and that is why initial reaction of the market has been a bit of a disappointment.”

First Published:Feb 1, 2020 3:40 PM IST