Budget 2015, the first full budget from the Modi government, has been
hailed as a positive, forward looking budget. However, it fell short on
certain parameters:
Mehul Choksi, Chairman of the Gem & Jewelry, Luxury & Lifestyle Forum (GJLL) of FICCI: The FM has ignored one of the biggest issues faced due to smuggling of gold to the tune of 180 tons that has come into India through ‘un-official’ channels in 2013. The impact of this ‘un-official’ supply of gold is valued at about US$ 10 billion, leading to a loss in foreign exchange inflow of a similar amount and a loss in revenue of over US$ 1 billion on account of Customs Duty. The 2% import duty on gold levied two years back to control the current account deficit should have ideally been rolled back given the current, positive state of affairs. This did not find any mention in the sectoral or taxation reforms announcements.
Devendra Shah, Chairman, Parag Milk Foods Pvt Ltd : The government has proposed a hike in the service tax from 12.3 percent to 14 percent, which will create a stronger competition among retail players in the market. This hike will effect the overall buying intensity of the consumer which will reflect on the revenues of companies that thrive on large mass selling.
Naveen Aggarwal, Partner - Tax, KPMG in India on IT Industry:
The Budget speech does not address specific industry expectations on
MAT rate reduction and retro amendment on expanded royalty definition.
Bhaskar Pramanik, Chairman, Microsoft India: Many of the announcements made in the previous budget, which were geared to minimize/resolve transfer pricing litigation are yet to be implemented. We will also need to see if some of the other tax related concerns of the IT and ITES sector have been addressed. These include resolving ambiguities in taxation of software products and services. In that context, the service tax rate going up is a concern, because of the impact it could have of driving people to use pirated software. Especially, because of the dual tax on software – the net tax rate for software is above 20 percent.
Utkarsh Palnitkar, Head of Advisory and national leader of Pharma sector, KPMG in India: It was expected that specific impetus be given to pharma manufacturing through announcements of clusters and, concession related to taxation related to manufacturing, as well as irritants such as service tax on clinical trials. As such other than the overall announcement of ‘Health for All’ and creation of NIPER in 3 states, the budget does not provide any specific impetus to the pharma sector.
Moorthy K Uppaluri- CEO, Randstad India: There was no mention of reforms in labour laws, a key aid for doing business and key indicator for attracting funds from international markets. We are hoping for the best execution of what is planned in the Budget, and then double-digit growth is sure to be a reality.
Mahesh Singhi, Founder & MD, Singhi Advisors: Given the government itself needs to take charge in investments, the FM delayed fiscal deficit target of 3% by one year.
Ramakrishnan, Vice Chairman, Joint MD & Group CEO, Polycab Group: The budget is a statement of the government’s intent, but the devil lies in the actual execution.
Harkirat Singh, Managing Director Woodland: We were expecting total removal of excise duty on footwear.
Alok Sanghi, Director, Sanghi Industries Ltd.: Areas of concern include increase in service tax, no focus on coastal shipping as well as increase in clean energy cess on coal from Rs 100 to Rs 200 per tonne.
S.V.Sukumar, Partner & Head of Manufacturing Sector , KPMG in India: More was expected to support MSME segments. There were a lot of expectations on ‘Labour Reforms” but there was nothing major excepting announcement of the National Skill Mission. The government can and should take up this critical area even outside of budget as this is one of the major irritants for both global / local players.
Vishal Bali, Co-Founder and Chairman of Medwell Ventures: It does not deliver to the expected transformation of the healthcare sector in the country under the promise of the Universal Healthcare coverage or the `Make in India' initiative. The allocation of Rs 331.5 billion for the sector is similar to the outlay in the previous budgets and does not translate to the much anticipated 2 percent of GDP spend by the government. The budget is silent on the promise of the National Health Assurance program and a distinctive thrust under the Make in India program for the medical technology sector.
Pratik Jain, Partner – Indirect Tax, KPMG in India: Reduction of customs duties on many raw materials and reduction of special additional duties would help incentivising 'make in India' campaign.
Eberhard Kern, MD and CEO, Mercedes-Benz India: The commitment to infrastructure, announcement of GST with a specific timeline and a simplified tax structure greatly enhances ease of doing business in India. It is crucial now that these measures are implemented within the next 12 – 18 months to accrue desired results.
Mehul Choksi, Chairman of the Gem & Jewelry, Luxury & Lifestyle Forum (GJLL) of FICCI: The FM has ignored one of the biggest issues faced due to smuggling of gold to the tune of 180 tons that has come into India through ‘un-official’ channels in 2013. The impact of this ‘un-official’ supply of gold is valued at about US$ 10 billion, leading to a loss in foreign exchange inflow of a similar amount and a loss in revenue of over US$ 1 billion on account of Customs Duty. The 2% import duty on gold levied two years back to control the current account deficit should have ideally been rolled back given the current, positive state of affairs. This did not find any mention in the sectoral or taxation reforms announcements.
Devendra Shah, Chairman, Parag Milk Foods Pvt Ltd : The government has proposed a hike in the service tax from 12.3 percent to 14 percent, which will create a stronger competition among retail players in the market. This hike will effect the overall buying intensity of the consumer which will reflect on the revenues of companies that thrive on large mass selling.
AFP
Bhaskar Pramanik, Chairman, Microsoft India: Many of the announcements made in the previous budget, which were geared to minimize/resolve transfer pricing litigation are yet to be implemented. We will also need to see if some of the other tax related concerns of the IT and ITES sector have been addressed. These include resolving ambiguities in taxation of software products and services. In that context, the service tax rate going up is a concern, because of the impact it could have of driving people to use pirated software. Especially, because of the dual tax on software – the net tax rate for software is above 20 percent.
Utkarsh Palnitkar, Head of Advisory and national leader of Pharma sector, KPMG in India: It was expected that specific impetus be given to pharma manufacturing through announcements of clusters and, concession related to taxation related to manufacturing, as well as irritants such as service tax on clinical trials. As such other than the overall announcement of ‘Health for All’ and creation of NIPER in 3 states, the budget does not provide any specific impetus to the pharma sector.
Moorthy K Uppaluri- CEO, Randstad India: There was no mention of reforms in labour laws, a key aid for doing business and key indicator for attracting funds from international markets. We are hoping for the best execution of what is planned in the Budget, and then double-digit growth is sure to be a reality.
Mahesh Singhi, Founder & MD, Singhi Advisors: Given the government itself needs to take charge in investments, the FM delayed fiscal deficit target of 3% by one year.
Ramakrishnan, Vice Chairman, Joint MD & Group CEO, Polycab Group: The budget is a statement of the government’s intent, but the devil lies in the actual execution.
Harkirat Singh, Managing Director Woodland: We were expecting total removal of excise duty on footwear.
Alok Sanghi, Director, Sanghi Industries Ltd.: Areas of concern include increase in service tax, no focus on coastal shipping as well as increase in clean energy cess on coal from Rs 100 to Rs 200 per tonne.
S.V.Sukumar, Partner & Head of Manufacturing Sector , KPMG in India: More was expected to support MSME segments. There were a lot of expectations on ‘Labour Reforms” but there was nothing major excepting announcement of the National Skill Mission. The government can and should take up this critical area even outside of budget as this is one of the major irritants for both global / local players.
Vishal Bali, Co-Founder and Chairman of Medwell Ventures: It does not deliver to the expected transformation of the healthcare sector in the country under the promise of the Universal Healthcare coverage or the `Make in India' initiative. The allocation of Rs 331.5 billion for the sector is similar to the outlay in the previous budgets and does not translate to the much anticipated 2 percent of GDP spend by the government. The budget is silent on the promise of the National Health Assurance program and a distinctive thrust under the Make in India program for the medical technology sector.
Pratik Jain, Partner – Indirect Tax, KPMG in India: Reduction of customs duties on many raw materials and reduction of special additional duties would help incentivising 'make in India' campaign.
Eberhard Kern, MD and CEO, Mercedes-Benz India: The commitment to infrastructure, announcement of GST with a specific timeline and a simplified tax structure greatly enhances ease of doing business in India. It is crucial now that these measures are implemented within the next 12 – 18 months to accrue desired results.
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