Page 40 - Banking Finance February 2018

BUDGET

UNION BUDGET 2018

INDUSTRY REACTIONS

Mr. Jimmy Patel, MD & CEO, Quantum Mutual Fund
Most of the big corporations are already moving towards the bond markets to take advantage of the
lower cost. Making it mandatory to raise one fourth of the total borrowing through bonds can push
the supply side of the corporate bond market. But there is lot to be done to boost the secondary
market which is essential to improve the price discovery mechanism. More steps need to be taken to
improve the depth and liquidity in the bond market, while also strengthening the credit rating moni-
toring mechanism.
Fund Houses have to realign the income distribution strategy; dividend stripping may get controlled
Mr. Jimmy Patel
while the investors may end up paying tax even in the short term. This doesn't augment well for the
mutual fund industry as Ulips as per current reading are outside LTCG Tax purview and with commissions riding high on
Insurance mobilization retail savings may get diverted to Ulips. The new proposed definition of equity oriented mutual
fund is also grey in terms of equity fund of funds.

Mr. Raghavendra Pratap Singh (Co-Founder, i2iFunding)

i2i Funding connects verified borrowers wishing to seek loans from investors spread across India who
are willing to fund them.
The Budget 2018-19 has been extremely encouraging for the startups, mainly operating in the Fintech
sector. The government has shown a keen interest in evaluating the policy framework and formulat-
ing an institutional model to create a conducive environment for the development of the industry.
Besides, government's willingness to promote the use of blockchain technology to encourage digital
economy may prove to be a growth catalyst for the P2P lending industry.
Mr. Raghavendra
Imposing 10% long-term capital gain tax on equity investments may create some level playing field Pratap Singh
for the P2P lending industry. So far, the favourable tax treatment on long-term gains on equity investments made them
a preferred choice for the investors. Now, those who are ready to take higher risk for earning better returns may also
think of investing in P2P lending projects which have a better risk profile as compared to equity-oriented investments.

Mr. Kalyan Basu, MD & CEO, Invoicemart
(A.Treds Ltd. - A joint venture between Axis Bank Ltd. and mjunction services ltd.)
"The union budget of 2018 - 19 is focused on job creation, with heavy expenditure on supporting
agriculture and allied activities to upgradation of infrastructure across airports, rail and road trans-
port. We are pleased with the announcements made to bolster the MSMEs. Higher allocation under
Mudra loans, relaxation of corporate tax, to addressing the NPAs and stressed assets.
Linking of TReDS with GSTN is a major move which will enhance usability and credibility of TReDs
platforms. Directing Public Sector Banks and Undertakings to be on TReDs platform will further help
in increasing credit availability. The Finance Minister has provided immense support to MSMEs with
Mr. Kalyan Basu
the intent of providing an impetus for growth through easier cash flows and investible surplus."

40 | 2018 | FEBRUARY | BANKING FINANCE

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