The Confederation of Indian Industry (CII) in association with PriceWaterHoouse Coopers today organized a post budget analysis and panel discussion to understand the implications of the budget on various sectors and to clarify key aspects of Direct & Indirect taxes as envisioned in the budget.
Delivering the keynote address, Mr. S L Rao, Former Director-General, National Council of Applied Economic Research (NCAER), complimented the Finance Minister on the budget. He said that while the budget signaled the governments intent for change, transformation cannot be expected overnight. Speaking on 4.1 percent fiscal deficit Mr. Rao said that there was no clear proposals laid out as to how the Finance Minister intended to achieve the target. Bank recapitalization, opening up of FDI in defense & insurance and smart cities were steps in the right direction. Mr. Rao said that nontax revenue up by Rs. 20,000 crore over the previous fiscal and an expected revenue of Rs. 75,000 crore from disinvestment as per the budget statement, if attained will be a major achievement by the government.
Mr. Kaushik Mukerjee, Executive Director, Pricewaterhouse Coopers said that the Finance Minister has announced a number of tax measures to assuage investor sentiment which had suffered on account of retrospective tax measures, instability in policy and delay in decision making. In his attempt to reduce tax litigation, he has proposed to allow residents to approach the Advance Rulings Authority, extend Advance Pricing with roll-back provisions, and enlarge the scope of the Settlement Commission. As an administrative reform process, he has ironed out a lot of creases in the existing law and also promised a consultative forum with industry and clarifications on issues to be issued by tax administrative bodies within two months.
According to Pramod Banthia Executive Director, Pricewaterhouse Coopers, The Union Budget has taken a major step towards certainty in tax legislation by extending Advance Ruling to resident assessees and by providing a forum to address the issues faced by industry. The FM has promised action during the year to resolve various issues for the advent of GST. The Budget has also taken steps to address inverted duty structure for specified sectors, rationalization of duty rates, review of negative list and exemptions for services. Overall, the Budget reiterates the Government’s commitment for tax reforms and clarity in tax legislation.
“This has been one of the longest awaited budgets in recent years and it has received a thumbs up from not only Industry captains but from trade bodies as well. The Finance Minister has made an attempt to address all sectors with uniform allocations and incentives. 10,000 crore for startups is a major highlight of the budget, however as in all policies implementation is the key” saidSandeep K Maini, Chairman, CII Karnataka.
The Budget has introduced measures to roll back Advance Pricing Agreements, extension of advance ruling mechanism to resident for income tax matters and resident private companies for service tax matters, simplification of transfer pricing rules, measures to make settlement commission authority more effective for income tax litigation.
Overall, the Finance Minister has attempted to cover the needs of the country in totality, within inherent limitations. The session threw light on the implications of the budget on several sectors including, manufacturing, infrastructure, education, information Technology etc. The Budget has presented a broad road map of the economic policy of the new Government and outlined its plan for reviving the growth spirit of the Indian Economy. The targets for the present year are a growth rate of 5.4 to 5.9 per cent with the fiscal deficit being capped at 4.1 per cent. Maintaining prices at comfortable levels also demands prompt attention.