Budget 2017: From GST implementation to tax cuts, industry hopes FM will deliver

The budget will be presented at 11 am today. Will there be much-needed sops after the pain of demonetisation? What will Finance Minister Arun Jaitley deliver? Here are the expectations from the various segments of industry:

GST implementation: Freudenberg India, a Germany-based manufacturing company engaged in developing and producing seals, vibration control technology components, filters, nonwovens, release agents and specialty lubricants as well as mechatronic products. Georg Graf, Regional Representative India, Freudenberg Group on Budget, 2017, says that the Indian Economy is in a good shape. Overall, we do see a positive business sentiment.”

However Graf believes that there will be no further delay implementing GST. “We hope the budget has something for all stakeholders - Industry, States and the people of India. ‎However,  we do observe certain weaknesses such as slow infrastructure development, a low “ease of doing business” rating, existing and accepted corruption - dirty money, high gender / social inequality and unclear laws. Further measures should help improve them within the scope of the budget as well.

While there is a wish list of reforms that the sector deserves, a few points need to be considered on priority, said Prakash Tulsiani – Executive Director & Chief Operating Officer – Allcargo Logistics. "At the outset, GST implementation is key for ease in movement of goods in the domestic market, the benefits of which are well discussed in the recent past. Secondly, focus on provisioning for infrastructure development, including better transportation system that will improve business efficiencies, thereby benefiting the sector immensely. The government should also look at fast tracking approvals for new infrastructure projects to boost foreign investors’ confidence. The government should consider giving tax benefits for capital intensive infrastructure. This will incentivize the private sector to invest significantly in infrastructure projects, a positive step towards realizing the ‘Make in India’ motto of the government. The development of logistics parks across the country for speedy delivery is also the need of the hour. Logistics parks will help provide services and facilities to reduce costs, boost efficiency and improve the flow of both raw material procurement and finished goods."

Incentivize digital payments: Demonetisation has put digitized payments to the fore and consequently digital payment firms. More and more consumers are opting to swipe their plastic cards and use e-wallets to purchase goods and services.  Sashank Rishyasringa, Co-Founder and MD, Capital Float wants the budget to have proposals that will incentivize digital payments and provide for enabling infrastructure. “This will encourage SMEs to adopt digital finance channels and become a part of the formal financing ecosystem. On the tax front, the expectation is the government reduce personal income tax and corporate tax rates by revising the tax slabs. By revisiting corporate tax slabs, there is less incentive for tax evasion, and this will push the economy towards digital money."

Budget 2017 is widely expected to encourage digital payments and universal access to financial services. “It’s important for our country to create a robust infrastructure to offer high-speed, reliable Internet access to one and all. Improving access to digital services with tax rebates on the production of affordable smartphones and offering subsidized data will also go a long way in democratizing India’s payments sector. We need to focus on digital money to stay digital, by strongly encouraging digital payments of all forms, as compared to ATM machines. Waiving off transaction fees for low-ticket purchases and increased access to credit would also help bring millions of unbanked and under-banked individuals into the folds of the mainstream economy,” says Madhur Deora, Chief Financial Officer, Paytm.

Union Finance Minister Arun Jaiitley

Union Finance Minister Arun Jaiitley

Real estate wants 12 percent tax slab: The GST rates have been finalized and the slabs fixed at 5 percent, 12 percent, 18 percent and 28 percent. The real estate sector is curious to know which tax rate will be applicable for it. Surendra Hiranandani, Chairman & Managing Director, House of Hiranandani, hopes a 12 percent slab will be applicable as it will ‘reduce the cost of apartments and increase  affordability for end users”. This, he feels will help developers and also impact sales. A higher rate of 18 percent is expected to increase the cost of homes, especially in under construction projects, unless there is clarity provided on the composition scheme (abetment of cost of land), VAT charges if they have been paid by developers for under construction properties), he said.

Increase spending in Digital India: The government needs to significantly increase spending in their vision for Digital India and Education. The impact of demonetization on the economy will be long lasting if it’s not now bolstered with an Indian equivalent of quantitative easing similar to what the US and western economies did after the 2008 banking collapse, says  Suneet Singh Tuli founder and CEO, DataWind Inc.

Boost consumer spend: Demonetisation has affected consumer sentiment with some withholding of purchase decision specially in the discretionary category. We expect the Government to give a boost to the consumer sentiment by lowering taxes and giving tax breaks for buying affordable houses, says Abhijit Roy, MD & CEO of Berger Paints.

Startups expectations:  The three reforms, that many small and medium businesses, and start-ups would be expecting from the government are, rapid implementation, and roll out of GST, unemployment experienced due to demonetization needs to catered to, and the government needs to invest in large infrastructure in projects such as the Sagar-mala (a necklace of ports, surrounding India), and a massive increase in road building target to 50km, per day and, recognizing a much more inclusive, and tax paying nation, thecCorporate Tax rate needs to come down to a more reasonable 25 percent, says Yashovardhan Gupta, Torero Corporation.

A stronger push towards the entrepreneurial ecosystem from the budget is being expected. "While last year, the Government supported our cause with the Startup India, Standup India initiative, amongst Make in India and Digital India, we need to now tread on the uncovered grounds, said Atul Rai, CEO and Co-Founder, Staqu - an artifical intelligence-focused startup. "Startups continue to invest their time and effort into sorting several tax-related and regulatory issues, which makes the operations further cumbersome and challenging. By extending the tax-free regiment to 5 years and taxing ESOP (Employee Stock Ownership) at the times of sale, would really give a boost to the startup environment today. Since R&D happens to be a crucial part

Updated Date: Feb 01, 2017 12:08 PM

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