Budget 2019: Union Finance Minister Piyush Goyal will unveil the Interim Budget 2019 on Friday, the last Budget of the incumbent government before the country goes to Lok Sabha polls in May. Though it is an Interim Budget, the government could throw several surprises to please the biggest drivers of the economy, including farmers, middle class, and corporate sector. Among these three drivers, the corporate sector is the heavily taxed sector. As the BJP seeks re-election this year, the corporate sector, hit by the government's several structural reforms -- like demonetisation, GST and Insolvency and Bankruptcy Code, Real Estate (Regulation and Development) Act -- is seeking relief in terms of lower taxes and better policies for simple credit flow to boost their businesses.
Priority sector lending status to MSMEs and SMEs
Anirudha Taparia, the executive director, IIFL Wealth Management, says to further augment the MSME and SME sectors, the government could accord them priority sector lending status, which would facilitate faster and better access to credit. Most of the small scale industry has been affected by tight government policies on access to loans. They have been demanding to the government to ease policies to ensure easy availability of loans, less regulatory compliance.
Do Away with Angel Tax
Union Commerce Minister Suresh Prabhu had recently pointed out that the government would soon come up with a solution to address the problems being faced by startups with regard to angel tax. Several startups have raised concerns over levying taxes on angel funds under Section 56 and 68 of the Income Tax Act, which provides for taxation of such money received by an entity. "For start-ups, doing away with Angel Tax is something on the wish-list. That would ease the burden on young startups, which are looking to raise growth capital from investors," says Anirudha Taparia.
The government in its last year's Budget had slashed the corporate tax for companies with a turnover of Rs 250 crore 25 per cent from earlier 30 per cent. The industry has been demanding to reduce it further to 20 per cent. The government has taken several measures to curb the cost of healthcare and realise its vision of making healthcare accessible. However, measures like imposition of un-nuanced price control on a number of drugs and medical equipment like stents and knee implants have attempted to reduce cost without ensuring the industry viability.
Lower customs duty on MedTech devices
India is a country with one of the highest customs duty on medical equipment, with 8.25 per cent customs duty on orthopaedic appliances, artificial implants, and surgical instruments. Other neighbouring countries like Sri Lanka Bhutan and Nepal have negligible customs duty on such life-saving products. "Ideally, the customs duties should be cut to 2.5 per cent, including all surcharges, to enable the industry to enhance the accessibility of healthcare to the un-served and under-served while also warding off the threat of smuggling low-quality devices into India," said Pavan Choudary, Chairman and Director General Medical Technology Association of India.
Real estate sector
Housing remains the top priority for every Indian regardless of their income levels, education or any other possible factor. "Budget 2019 would play a pivotal role in the grand dream of 'Housing for all by 2022'. Allocating separate industry status to HFCs in the bank exposure will ease liquidity scenario. Steps like extension of Sec80-IBA until FY22 to promote affordable projects, tax-sops on green housing projects, housing corridors development akin & adjacent to industrial corridors, increased allocation of funds for infra development push in Tier-3 and smart cities, increased allocation to Amrut-Saubhgya-Ujjwala Yojna etc will certainly ensure the right push in the supply side of real-estate," says Arvind Hali, CEO and MD, ART Housing Finance.
Edited by Manoj Sharma