Here are the pre-budget expectations of India Inc from Union Budget 2017:
1.
Encourage digital payments and proper infrastructure: Capital Float
In the process of creating a cash free economy, we expect the budget to incentivize digital payments and provide for ample enabling infrastructure; this will encourage SMEs to adopt digital finance channels and become a part of the formal financing ecosystem, Capital Float Managing Director Sashank Rishyasringa said.
Rishyasringa said: "More and more consumers are opting to swipe their plastic cards and use e-wallets to purchase goods and services. As SMEs become more proficient with electronic payment systems, this is an opportunity for fintech firms to bring these SMEs into the formal lending ecosystem. On the Tax front, the expectation from the budget is for the Government to 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. Reducing the personal tax slabs, will drive consumer spending and hence the economy."
"Also, the implementation of GSTN can create digitization of invoicing across the country by enabling easy filing of returns and tax payments," Rishyasringa said.
Rishyasringa said: "More and more consumers are opting to swipe their plastic cards and use e-wallets to purchase goods and services. As SMEs become more proficient with electronic payment systems, this is an opportunity for fintech firms to bring these SMEs into the formal lending ecosystem. On the Tax front, the expectation from the budget is for the Government to 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. Reducing the personal tax slabs, will drive consumer spending and hence the economy."
"Also, the implementation of GSTN can create digitization of invoicing across the country by enabling easy filing of returns and tax payments," Rishyasringa said.
2.
Simplification in tax administration to bring more people into the tax net: Mindtree
For corporate India and Indians to plan their medium and long term financial and investment priorities, we strongly recommend that the Finance Minister outlines a larger 3-5-year fiscal roadmap for the country, explaining the priorities seen by the government and reforms that are being evaluated, Mindtree CEO Rostow Ravanan said.
Ravanan said: "The biggest problem we face right now is that a country with our population size and GDP has very few tax payers. Consequently, the bulk of the compliance headaches fall on the salaried tax payer. We recommend simplification in tax administration to bring more people into the tax net and reduce the disproportionate burden on salaried tax payers. For the IT industry, the biggest expectation is that the GST implementation plans need to be revisited urgently."
The Mindtree CEO also said that some of the incentives given to an individual tax payer needs to be streamlined and updated for current realities, for example, the limit for medical expenses is set at Rs 15000 per annum which is very inadequate for a family of 4 in urban India.
Ravanan said: "The biggest problem we face right now is that a country with our population size and GDP has very few tax payers. Consequently, the bulk of the compliance headaches fall on the salaried tax payer. We recommend simplification in tax administration to bring more people into the tax net and reduce the disproportionate burden on salaried tax payers. For the IT industry, the biggest expectation is that the GST implementation plans need to be revisited urgently."
The Mindtree CEO also said that some of the incentives given to an individual tax payer needs to be streamlined and updated for current realities, for example, the limit for medical expenses is set at Rs 15000 per annum which is very inadequate for a family of 4 in urban India.
3.
Increase in individual income tax slab limits: Angel Broking
The industry expects the Budget to allocate more funds to infrastructure and focus on capex revival and also slash personal income tax rates so that consumers may have more disposable income to boost auto demand.
Angel Broking said: "We believe that the government is likely to take corrective measures which would offer remedy to the demonetisation wounds. In our opinion, increase in individual income tax slab limits and reduction in corporate tax rate is expected to be the highlight of the budget in order to revive the consumption cycle. Also, higher allocation to infrastructure, housing and urban development will ease the stress level of corporate India's balance sheet."
The firm also wants government to hike capital infusion in public sector banks to improve their capital adequacy position.
Angel Broking said: "We believe that the government is likely to take corrective measures which would offer remedy to the demonetisation wounds. In our opinion, increase in individual income tax slab limits and reduction in corporate tax rate is expected to be the highlight of the budget in order to revive the consumption cycle. Also, higher allocation to infrastructure, housing and urban development will ease the stress level of corporate India's balance sheet."
The firm also wants government to hike capital infusion in public sector banks to improve their capital adequacy position.
4.
Private investment must be revived to boost economy: CRISIL
Government has been taking many steps to improve investment cycle, but it has turned to be an exercise in futility because share of capital in GDP continued to fall, CRISIL said in its pre-Budget report.
CRISIL said: "Private investment was expected to take another year to recover even before demonetisation. But the cash crunch following demonetisation curbed demand. That in turn, could delay revival in private investment. While demonetisation may not have impacted ongoing investment, fresh ones would have been kept in abeyance. That in turn, would further delay recovery in the private investment, so critical for sustained pick-up in investments."
Domestic consumption must be boosted by improving purchasing power, especially among the rural population and workers in the unorganised sector and smoothening of transaction process in cash-driven sectors, CRISIL suggested.
CRISIL said: "Private investment was expected to take another year to recover even before demonetisation. But the cash crunch following demonetisation curbed demand. That in turn, could delay revival in private investment. While demonetisation may not have impacted ongoing investment, fresh ones would have been kept in abeyance. That in turn, would further delay recovery in the private investment, so critical for sustained pick-up in investments."
Domestic consumption must be boosted by improving purchasing power, especially among the rural population and workers in the unorganised sector and smoothening of transaction process in cash-driven sectors, CRISIL suggested.
with thanks : TOI : LINK
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