 "Budget was on expected lines: Arun Ganapathy")
Budget announcement by Finance Minister for the financial year 2017-18 was on expected lines. As anticipated, the reduction of personal income tax would increase the disposable income in the hands of individuals.
As mentioned by the Finance Minister, about 96 percent of individuals have an income of less than Rs 5 lakhs and they tend to gain on reduction in income tax rate for income upto Rs 5 lakhs. Also, there were no changes in the indirect taxes as expected by us, though there were some expectations in the market that there would be a change in service tax.
Demonetisation has impacted the retail industry per se. The statement of the Finance Minister that the impact of demonetisation will not spill over to the next year is a welcome one and would augur well for the industry.
Though the reduction in corporate tax rates for SME corporate will help smaller retail entities, it is quite disappointing that the rate reduction was not extended to all corporates. Also, we expect a reduction of Merchant Discount Rate (MDR) charged by banks post waiver of duties for manufacture of POS machines and allied spare parts proposed in the Budget. We need to read the fine print as there were few proposals where the Finance Minister mentioned that though they are not included in his speech, they are a part of the annexure to his budget speech.
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Arun Ganapathy is the CFO of Spykar Lifestyle Pvt Ltd
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