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The last full Union Budget will be read out by the Finance Minister Arun Jaitley on Thursday. This is Narendra Modi-led NDA government's fourth Budget and is likely to set the tone for the General elections in 2019.
Various sectors have their own Budget 2018 expectations which is due in less than an hour. It is being said that Finance Minister Arun Jaitley will be reading the financial statement for the year 2018. Here are the expectations across the sector from the Union Budget.
“In the past two decades, we have not seen an increase in various allowances offered to the salaried population in the country. For example, medical expenditures are exempted only to the tune of Rs. 15,000 per annum and children education expenses to the tune of Rs.100 per month. These numbers have remained unchanged for the past several years, even though the costs in the country have risen many-fold during the same period. It would be of great benefit for the salaried people if the Union Budget 2018 considers increasing the limit of such employee tax benefits.
Also, in line with the government’s vision of promoting digitisation in India, it becomes imperative that it is made easy for people in the lower socio-economic strata to become a part of this revolutionary change. For example, people without a PAN number, still have to rely on paper-based Form-60 to complete the account creation process. So, I would request the government to work out a strategy to manage this digitally.
From an ordinary salaried citizen point of view, I feel that our current tax slabs are not in line with the current inflation. It would be a joyous moment for the lakhs of tax-paying citizens if the Honourable Finance Minister revisits the tax slabs in light of the current inflation rate.”
~ Ramki Gaddipati, Co-founder and CTO, Zeta
We expect rural economy; infrastructure and affordable housing to have key impetus in the last full budget of the current government. To take our country in next cycle of growth we believe continued efforts towards financial inclusion is of paramount importance. Till date, vast majority of Indians remain excluded from access to loans, insurance, mutual funds etc. Although, in last 2 years, we have successfully implemented intricate policies like DeMo, GST and RERA. Going forward, to continue to reap the benefits of the same, we expect government should adopt simple strategies to keep the enthusiasm high. To increase digital penetration, the government may consider tax exemption for a) customers conducting transactions digitally/electronically over a certain limit, b) vendors/merchants exceeding a certain threshold in value of digital transactions.
We also expect the TDS for NBFC interest should be raised from the current Rs 5,000 (NBFC) / Rs.10,000 - (Bank) especially as the limits were last set two decades ago in 1997.
Recently, interest rate subsidies on home loans have been provided to Middle Income Group households. Currently, households earning between Rs. 6 - 12 lakh a year can claim a 4% subsidy on home loan amounts up to Rs. 9 lakh. Similarly, households earning between Rs. 12 -18 lakh annually receive a 3% subsidy on loan amount up to Rs. 12 lakh. We expect these caps to be raised so that it is in sync with the increasing costs of real estate especially in urban areas.
~ Mr. George Alexander Muthoot, MD - Muthoot Finance Limited
"Over the last three years, the government has kept a very tight fiscal discipline and it has paid rich dividends in the form of lower deficits and consequently lower inflation and interest rates. We expect the government to continue the focus.With demonetization & GST already implemented and their affect monitored, expecting this one to be a budget which encourages big spending. Taxation is something which really needs to be revised. Direct taxes to go down, a Major reforms on the ease of doing business is required & easy access should be given to credit capital.
Also from a digital perspective expect more incentives on digital payments and wont be surprised if we also see some direct tax benefits for Startups
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The upcoming Union Budget 2018 will be a significant one as it will be the first budget after a bold economic measure like GST has been implemented. We are likely to witness a whole lot of business and economy friendly measures being announced. Thanks to the government’s Make in India initiative which encouraged local manufacturing and augmented production, India has emerged as the second largest mobile phone market in 2018. As the country eyes the top position, the mobile phone industry expects the government to maintain and introduce more favorable policies for domestic manufacturers. First, in order to prevent dumping of phones in the Indian market, the government should increase the duty on CBU’s to 20 % (recently govt. has increased duty on CBU’s from 10 % to 15%). This will provide domestic manufacturers a level playing field vis a vis importers and encourage them to expand capacity. Second, we expect the government to lower bank loan interest rate by 2%- 3 %. Mobile phone manufacturing is a capital intensive industry, with long credit cycles. Also, with the introduction of GST, a lot of working capital is tied up, making it tough for manufacturers. Furnishing a bank guarantee rather than blocking working capital would be a big relief. Therefore, to ease the pressure and make manufacturers more competitive, a lower interest rate coupled with bank guarantee would be crucial. Last but not the least; we hope the government extends the IGST benefits to manufacturers.
~ Mr. Vivek Agarwal, Co-founder, M-tech Informatics Ltd
“The Startups are very important part of economic growth, innovation and worldwide competitiveness because we provide eccentric service and in doing so, we are producing great employment opportunities. A Startup is all about new idea, new concept & innovation. So, please support Startup as we are generating new jobs and a promise to provide you something new in the market. It not only gives employees a platform to grow but we also help a lot of new talent and other people who are equally skilled to compete in the market.
As per the Government new tax slabs now, Hotel rooms of Rs. 7,500 & above will have to submit a luxury tax of 28 per cent. It means that for 24-hour hotel stay, one will pay minimum Rs. 2,100 as GST only. We believe that 28 per cent GST is high for a single night stay. It should be decreased to 12 per cent.”
~ Puneet Gupta, Co-Founder & COO, icanstay.com
"This year budgets are going to be significantly crucial as they happen post the year of notable reforms like Demonetization, GST implementation and insolvency & bankruptcy policy. This year budget also marks significant impact on the way our ecosystem functions. Bringing in policies that fosters growth in employment, direct tax reforms, creating more clarity on the way bitcoin operates and its significance on Indian economy can be familiarized for smoother functions. The last year's budget has taken various initiatives to improve the ease of doing business, controlling inflation, digitizing the financial and individual records. Increase in FDI (Foreign Direct Investment) is a pragmatic initiative that has opened up investments from various sectors. Government should capitalize on the growth trajectory of the past year to strengthen the existing framework of the policies and to create sustainable solutions that foster employment opportunities, transparent financial policies to make India USD 6 Trillion economy in a decade of time."
~ Mr. Aniketh Jain, CEO & Co-Founder of Solutions Infini Pvt. Ltd.
“In the rapidly changing landscape, we believe that the distinction between telecom, IT and broadcasting technology has disappeared and that a convergence of these sectors is required. A positive consideration of this demand in the 2018 budget will certainly help in the rapid growth and generation of substantial employment in our country. Also, similar to the telecommunications sector, television broadcasting organisations including Direct-to-Home (DTH), cable services and Headend in the Sky (HITS) require huge investments in setting up technology and distribution networks and, as such, are ‘asset-rich’ organisations. Hence, just like in the software and telecom sectors, it is necessary to allow for the carry-forward of losses in the case of amalgamation or merger of companies in the broadcasting sector.
For the budget FY18, we are also hopeful that the government will issue a clarification stating that transponder hire charges are not ‘royalty’ in order to avoid protracted litigation.”
~ Mr. Punit Goenka, President – Indian Broadcasting Foundation (IBF)
“Like any other budget, the Union Budget of 2018 comes with many hopes and expectations for the country. This year’s budget is a bit special for a few reasons; one being, that it is the last full year budget for the current government (Govt.). Secondly, the country saw two major events the demonetisation and implementation of GST. Thirdly, implementation of IBC as it sinks in is a dramatic mind set change for Corporate India, this year we will witness depth of its effectiveness and the changes that it brings in.
I would like to congratulate the Govt. for bringing in the reforms and its efforts to put the economy on the growth trajectory. Some of the last year’s initiative such as Mudra loans has put a cheer back on the faces of MSMEs; the Govt. has claimed an achievement of 95% in loans disbursal under the scheme.
The monumental step of recapitalisation is a major move in strengthening the public sector banks (PSBs). With focus on themes such as customer responsiveness, responsible banking, credit off-take, PSBs (public sector banks) as Udyami Mitra, deepening financial inclusion and digitalisation and developing personnel for brand PSB, the Govt. is making an all-out effort in creating strong financial institutions.
Initiatives of the government such as Skill India, Make in India, among a host of other steps taken are all coming together like pieces of jig saw puzzle in supporting MSMEs and strengthening the economy.
One of the greatest challenge faced by the Govt today is new job creation. MSMEs actually can play a significant role in meeting this objective and hence we expect the Govt to come out with fresh incentives for the MSMEs going ahead.
Launch of TReDS
Last year, three entities received licence for starting TReDS platforms. The Govt. views it as one of the crucial ways to support MSME sector by providing a tech based access to the much needed working capital through an online and transparent bid mechanism.
The Govt. has supported the growth of the nascent sector by advising PSUs and PSBs to register themselves on the platform. I appreciate the efforts of the government in pursuing with all the stakeholders to increase traction on the TReDS platform.
In the coming budget we expect the Finance Ministry to continue to provide easier access for MSMEs to institutional credit and strengthen them through a more relaxed regulatory framework.
Secondly I would like to focus on the important issue of credit insurance which could be provided to the MSMEs coming onto to the TReDS platform for bill discounting. Just as ECGC has been protecting the small exporters from default risk of the Foreign Buyer, we also need a similar product for small MSMEs to cover default by their buyers in the domestic market.
I look forward to a policy framework which enables a sustainable and inclusive development of the country with strong financial institutions lending to MSMEs.”
~Mr. Kalyan Basu, MD & CEO, Invoicemart