Corporate Grapevine

Published: Feb 15, 2022
Updated: Feb 15, 2022

India Inc unhappy

Corporate India is not very happy with the Union budget, though publicly CEOs are saying it’s a good budget due to fear of ‘Big Brother’ reprisal. The budget, as usual, has given a lot of sops to big corporates like Tata, Adani and Ambani, but small and medium sector companies have been left empty-handed. Take, for example, the budget statement that the government has paid a whopping Rs 70,000 crore of Air India’s debt. This was the biggest sweetheart deal ever in the history of India, in which tax payers lost and the Tata group won a bonanza. Similarly, the Adani group will get a huge boost after the government gave infrastructure status to data centres. Adani is planning a big foray in the data centres business.

Reliance will be a big beneficiary with the budget extending the date for investment tax benefits by another year and giving tax incentives under the performance-linked investment scheme. As for the salaried class, the Modi government once again decided to keep them out in the cold while gifting billions of dollars in benefits to large corporates. However, several industrialists lament that inspite of the third wave of the pandemic hitting business activity, the government has not paid any attention to the woes of the business community. They were expecting tax breaks which could have given some relief to them. Raw material prices have been shooting up, adversely affecting margins of companies, many of which are not in a position to raise prices of their products in order to compensate for the hike in raw material prices. Transportation costs are on the rise in view of the rising crude oil prices.

Several MSMEs have been forced to roll down their shutters and there are no remedial actions in the budget to bring them back to life. The past cannot be rolled back, and we don’t know what will happen in the future, through the budget has been designed keeping the next 25 years in mind, as the Finance Minister says. And as far as the present is concerned, the budget has totally neglected it. “The stock market euphoria which was seen on the first two days (after the budget) was over by the third day as the market realised that though there is nothing negative in the budget, there is nothing positive either for the market.