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Union Budget 2019: Expectations from Indian Organizations

New Delhi, India, July 03, 2019- India's much awaited Union Budget for the fiscal year 2019-20 will be presented by the Finance Minister Nirmala Sitharaman on July 05, 2019. This budget is expected to lay focus on start-up eco-system in the country and announce various incentives for the next few years.

Here are some of the organizations in India with their expectations from this year's budget (Fiscal 2019-20)

Indroneel Dutt, CFO, Cleartrip: "We are optimistic and hopeful that the government will continue to be open-minded and maintain the impetus of its past initiatives while bringing necessary reformations to further enable the aviation sector. The Regional connectivity Scheme titled UDAN needs particular attention and allocation in this Budget. Increased digital penetration in the last few years has been one of the biggest contributors to the rise of the Indian travel industry. So, we expect the budget to sustain and accelerate India’s digital journey. We also hope that the Government will bring necessary provisions to accommodate four different slabs under ‘One GST Rate’ in this budget. Simplifying input credit mechanism on air and accommodation services including big-ticket transactions like travel bookings, along with processes like GST filing, will provide a fillip to the sector. As this sector is one of the most organized and tax compliant industries in India, we further hope that the Government will take necessary actions to remit or remove TCS entirely. This will alleviate the unnecessary financial burden on the airlines and the OTA’s which will translate to passengers getting superior aviation services at lesser fares."

Saru Tumuluri, CEO, Khosla Labs: "Innovation in fintech should be driven more aggressively by the regulators. The regulatory sandboxes initiative needs to go live as quickly as possible starting with all the financial regulators enabling all the fintech players to develop more products in an accelerated manner - this will be a big boost in for the fintech landscape of India. A fintech innovation fund should be created to help boost startups in digital identity and fintech space."

Saurav Goyal, CFO, Money View: "The Indian government is taking numerous positive proactive steps to create a stronger ecosystem for the nation’s vibrant start-up market. Yet beyond physical spaces and support systems, the policy ecosystem must also be shaped to encourage risk-taking, innovation and growth. The Government as part of the budget should provide necessary clarity in terms of taxation norms and make a requisite change in the policies in accordance with the latest business practices, post factoring another regulatory requirement. The way forward on policy-making in India must follow a truly consultative and multi-stakeholder model that ensures a wide representation of interests at all stages of the process. This not only complies with international best practices but will also allow India to balance its national interests with access to global markets.

Digital India requires a private and public sector synergy. The engagement of the private sector in national development programs has the potential to serve and develop ends across any and all sectors. It will support the government by providing suitable infrastructure and technology-led facilities to consumers. Besides this, there will be a good inflow of innovative ideas and modern technologies from the private sector that will give a boost to the Digital India Programme."

Mahhaguru Gaurav Mittal, M.D., Mahhaguru Navgrah Private Limited: Products which have a quick turnover, and relatively low cost are known as Fast Moving Consumer Goods (FMCG); Examples are toiletries, soap, cosmetics, tooth cleaning products, shaving products and detergents.

Expectation of FMCG industry from Budget 2019-2020

1. FMCG industry has now become a low margin industry business and one in FMCG business can sustain only on high volumes. GST on branded products starts from 5% to 12, 18 and 28% where on unbranded items its zero percent; somewhere there is a need to bring the whole FMCG industry under just one lowerest most GST range else its giving boost to unbranded items.

2. A major cost component for deciding the product landing cost is dependent on Transportation cost. Freights play a significant role in cost of the product and hence govt to look into fuel cost, toll taxes etc. and bring the transportation cost significantly down.

3. Unnecessary monthly returns are headache; Monthly GST returns are really headache (2 returns are on month basis GSTR-1 & GSTR-3B right now). some simple way and just quarter/ annual returns should be sufficient otherwise they are giving chance for corruption.

4. If GST remains same on each category of product then there is no need for each category license; single HSN code and license should suffice. It's a headache and giving chance for corruption.

5. Companies expect government to reduce Corporate tax 20%.

6. Payment of TDS should be quarterly basis for small scale or MSME Regd. companies etc.

7. Assessment or order should be complete within 1 years.

Subhash Nagpal, CEO and Founder, “We expect some big bang reforms in the insurance sector like creating a provision for making pension from life insurance products tax-free, and also provide tax exemption for life insurance pension plans under special sections. The sector also requires a separate tax exemption for pure protection life insurance policies. Most importantly, there is an urgent need to increase FDI limit in insurance and insurance intermediaries.

We also believe that the government needs to shed more light on the Ayushman Bharat scheme and also enlist processes to fund and operate it better. There is also the need to link Home Insurance to Home Loans so that losses to property arising out of catastrophe can also be covered. When it comes to corporates, employee health insurance should be made mandatory across industries and sectors.”

Nilyanka Bhushan, Managing Partner and Co-founder at Sigma Ventures: The budget should focus on the generation of employment through growth targets that exceed the past twenty year performance.

For this purpose, the government should actively increase support to small and medium industries. Increase of facilities for seed and growth equity funding for startups and SMEs, provision of simplified and incentive-based credit facilities to help the manufacturing sector grow should be among the top priorities. This will catalyse the innovation and entrepreneurship that are India’s natural strengths.

Additionally, with the residential real estate sector in doldrums and near jobless growth, government needs to put into place measures to revive the troubled housing market. Purely lowering interest rates might not work. Long term resolution of the liquidity crisis in NBFCs will also need to be addressed. As the revival of real-estate is a must for employment, it will be very important to look at what the government proposes in the budget.

Addressing NBFC debt crisis- A financing crunch is hurting India’s economic growth that the non-bank financing companies have compounded and are finding their troubles worsening as a crisis of credibility starts to escalate. We will have to wait and watch how the budget will address these issues.

Focus Areas- The two sectors that should receive maximum attention are defense and agriculture-based businesses. The reduction of India’s defense imports bill can be achieved by strongly encouraging indigenous suppliers in preference to imports. Integration of the defense sector into the civilian economy to the maximum extent possible will enable a quantum jump in employment as seen in all advanced economies. Similarly, agriculture-based businesses should be encouraged through the provision of finance and infrastructure incentives. This will also enable a quantum jump in productive employment and reduce the migration from villages to cities that has occurred during the past fifty years.

While presenting the budget; government should seize the opportunity to reshape India as an innovation economy instead of remaining a services and agriculture economy. Benchmarks should be set for both the public and private sectors to perform to a uniform set of standards both financially and ethically. This will lead to a complete transformation of the Indian landscape from a few select affluent clusters surrounded poverty to a more equal and broad-based economy where a rising tide truly lifts all the boats.

Amit Gossain, MD, KONE India and Chairman, Real Estate & Building Technology, CII: “The Union Budget 2019 is expected to be pro-growth and forward-looking as Infrastructure Sector has been identified as the backbone of Nation’s Development and Quality of life by the Government. It is likely to stimulate demand and boost economic growth, on the back of rising urbanization and increasing number of high-rise residential and commercial buildings across the country. Landmark reforms like RERA & GST, that have been instrumental in bringing transparency in the Real Estate Sector, is expected to help accelerate the sector with the New Regulatory regime. The earlier Housing initiatives of the Government, should get a boost with necessary reforms, thus enhancing the overall growth of the Indian Economy. There are many positives anticipated in the Infrastructure Sector; the introduction of Tax-Free Bonds to boost investment, streamlining of land acquisition process and increase capital outlay towards Infrastructure Sector by 12-18 percent, to name a few.

Prime Minister’s Mission of Housing for All by 2022 will enter its significant second phase, which is bound to be an extremely exciting time for all Industry stakeholders. The low-interest rate loans, special interest rate for Women, Tax exemptions with specific investments, Rollover Capital Gains, Capital outlay under PMAY and other such schemes will support the Infrastructure growth.  However, building of such large no. of housing, much of which is based on tenders should ensure houses and their related fixtures such as fittings, Elevators and Building material is of high quality with high longevity and safety factors. The Budget is also expected to provide direction on the long-term projects being undertaken under Smart Cities Mission, and Atal Mission for Rejuvenation and Urban Transformation (AMRUT) programme. To continue the momentum for Indian Realty and Project the next wave of the Economic Growth, government should allow tax benefits for investments in Real Estate Investment Trusts (REITs).

Overall, we are looking forward to an Inclusive Budget and waiting to see a NEW INDIA focusing on positioning the Economy for future sustainable growth."


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