We look at what CEOs at India Inc expect from Union Budget 2017-18 speech to be presented by Finance Minister Arun Jaitley on February 1, 2017.
G V Prasad, co-chairman and CEO, Dr Reddy's
Y K Hamied, non-executive chairman, Cipla
Kiran Mazumdar-Shaw, chairperson & Managing Director, Biocon
Research and innovation are two areas where there is need for greater investment. Start ups will also need a lot of sops and as for corporate India, it is looking for reduced taxation to help us remain globally competitive. On taxation, it also looks like the finance minister may increase the slab for personal taxation for the starting level and it could go up to Rs 5 lakh from the Rs 2.5 lakh currently. Also, given the make-in-India and innovate-in-India, I think, the government procurement must favour domestically made products.
Nikhil Khandelwal, MD, Systematix Shares and Stocks
In my view, the government needs to make the following 3 inclusions in the budget from a capital markets perspective:
1. Raising the basic exemption limit to Rs 4- Rs 5 lakh: We believe that with a wider set of public under the tax net through the demonetisation process, the government can pass a benefit to middle income households through increasing the tax exemption limit up to Rs 5 lakh. We believe that this will enable significant capital coming in the hands of the middle class consumer, thereby fuelling the consumer products demand which has been partially dented due to demonetisation.
2. Bring transparency and clarity in the AIF Category III funds taxation structure, to enable more participation of public equity funds through this structure. Also its important that the structure provides a level playing ground for funds operating from India, so that the funds don't have to open offshore offices to route the capital.
3. From a brokerage industry viewpoint, removal of STT will further improve the flow of capital into Indian equities and will simplify the overall taxation structure for investors.
Amit Oberoi, National Director, Knowledge Systems at Colliers International India
Post demonetization, the real estate industry will closely follow the budget. In my opinion, more than the small benefits accrued from interest subvention on home loans or lower individual and corporate tax or extension of SEZ sunset clause, etc is to look at the bigger picture - which is the need to expand the economy.
The sector needs a spurt in demand for residential, office, retail and industrial spaces. This comes from growth in the economy, that in turn result in higher business confidence, job security and more spending. This government has made bold decisions in the past to reform and galvanize the economy, thus the industry has high expectations.
Shilpa Kumar, MD and CEO ICICI Securities
The upcoming union budget is unarguably the most anticipated policy event post demonetization and is expected to be a major catalyst for resurrecting GDP growth. The government is comfortably placed on the fiscal side given buoyant tax collections.
We expect the budget to focus on job creation and consumption revival without losing sight of fiscal consolidation. The employment agenda is expected to be driven through higher allocation towards social sector schemes such as MGNREGA.
More importantly, quality spending on job creating infrastructure segments with focus on low cost housing, road, irrigation and ports among others would also boost jobs and drive consumption specifically in rural India. The consumption stimulus could also come from tweaking tax rates and increasing tax exemption limits.
This would free up money in the hands of middle class which would eventually boost consumption. Additionally the government might further initiate measures to bring more transparency in reducing the shadow economy and expanding the formal GDP for sustainable growth.
In short, a big push for jobs and consumption and a continued focus on fiscal consolidation through tax base expansion and spending efficiencies.
MK Dhanuka, Managing Director, Dhanuka Agritech Limited
Agriculture is the mainstay of the Indian economy because of its high share in employment creation and GDP. The sector accounts for 17 per cent of India's GDP and employs almost 53 percent of the country's workforce.
Despite technological advancements, agriculture in India is still dependent on nature. With this year's budget we have several expectations in order to boost the economy which in turn will help India achieve the national goal of food security and doubling the farm income.
Currently, there is no excise duty on Seeds, Fertilizers and Farm Equipment's, while Pesticides attract 12.50 percent excise duty. Due to the excise and VAT burden, pesticides become costly for farmers. Removal of excise duty and VAT would make pesticides more economical for farmers which would further help in increasing productivity.
Also, the Industry has been impacted by 10-15 per cent due to demonetization. The demand for agro-chemicals has also been impacted due to this reason. We expect budget to make provisions for a sizable fund for industrial as well as on new technological education and training of farmers. Even today, large segment of Indian farmers are unaware of the new technologies which is hindering acceptance of digital modes of transaction.
We appreciate the initiatives taken by the government in the last budget and look forward to more such initiatives and enhanced focus on implementation of government schemes.
Yashish Dahiya- Co-Founder and CEO, Policybazaar.com
Every year Budget is a much-awaited event for industries and consumers. Post the revolutionary move of demonetization by the government, expectations are much higher from the coming Budget. We look forward to a sea change in certain policies.
Recently, the government has incentivised transactions made through portals of public sector insurance companies for both life and non-life.
To engorge message to masses and further build encouragement levels in the insurance sector, we expect government to extend this benefit to other channels of distribution such as agents, brokers and aggregators etc.
Further, government should put insurance in the lower slab rate under GST. This will make insurance products economical and will help in increasing the penetration levels. We expect government's support to make insurance products accessible and affordable for the masses.
Raghu Kumar, Director, Upstox, one of India's leading online broking firms.
In general, the government is expected to raise taxes through a plethora of ways. Prime Minister Modi has already made it clear that he feels those who profit from the markets should give their fair share of returns back to it.
One way is to change the rule on the duration for which you don't pay taxes on long term capital gains. As it stands, that duration is one year. There are rumors that it could be increased to 2-3 years. An extreme measure would be to completely eliminate any sort of tax free long term capital gains transactions. This would adversely affect the markets; investor participation is low enough as it is already.
In general, Dalal Street is not looking for a favorable Budget and has already priced that in. If if turns out that no changes are made, the markets should surge upwards since the markets have priced in a Budget that will not favour the markets.
Varun Khanna, Managing Director, BD India & South Asia
Introduction of GST would put various sectors under the ambit of service tax. Healthcare is currently exempt from service tax and should ideally remain exempted after the implementation of GST. The healthcare sector needs concessions if we want health to be available for all. Levying service tax on healthcare services and facilities right away will prove to be a regressive step in the efforts to provide universal health care.
Tom von Bonsdorff, Managing Director, Volvo Auto India
India requires critical thinking about environmental pollution and should be receptive of new technologies adopted by automobile industry. There is a need to revisit the existing import duty structure for hybrid vehicles. We are expecting that the Union Budget 2017 will introduce more incentives or schemes like Faster Adoption and Manufacturing of Hybrid and Electric (FAME) scheme to promote eco-friendly driving and mobility.
Akshay Dhoot, Head, Technology and Innovation, Videocon
The smartphone sector is eagerly awaiting for a consumer friendly budget which will promote positive sentiment among the people and will help to further strengthen the economy. We believe that upcoming budget should address and encourage alternative ways for payments especially cashless transactions and offer additional benefits on digital payments. Further, we expect differential duty on mobiles to continue as it has helped the Make in India. Videocon believes that the government will announce a budget that will favor local manufacturing and support Government's Make in India and Startup India campaigns.
Varun Khanna, Chairman, AdvaMed India Working Group and Executive Committee
The Drugs and Cosmetics Act, 1940 treats devices at par with pharmaceutical products and the rules, regulations and policies for pharmaceuticals are applied to medical devices by agencies and government officials that come from a pharmaceutical mind frame and education background. This leads to an unpredictable regulatory environment that is inconsistent with global norms for regulating medical devices. It is essential for the government to Amend the Drugs and Cosmetics Act to include a new globally harmonized definition of a medical devices and in vitro diagnostics (IVDs) removing any reference to medical devices under the drugs definition work with the global medical devices industry and relevant stakeholders to finalize the Medical Device Rules, 2016 ensuring that all provisions are harmonized with global best practices.
Raaja Kanwar, Vice Chairman and Managing Director, Apollo International
Budget 2017 will be one of the most awaited budgets for obvious reasons: one of the key expectations that people across section of the society have is the modification in the Income tax slabs to ease the pain of Demonetization, as with the lowering of the individual tax slabs, the disposable incomes in the hands of the common person would be the biggest beneficiary of GST, allowing for a transparent and effective working and reducing corruption. GST would help in faster, better and healthy movement of goods across the various states, which will save time of transportation and also reduce the cost of transporting goods, which in turn would benefit the end consumer.
Sandeep Sabharwal, Group CEO, Sohan Lal Commodity Management
We can see the intent of the government to encourage post harvest agri-produce management and distribution network. This can be further improved through strategic Public Private Partnership. Adding to it, the government should consider incentivising the Non Banking agri financing companies with low cost of funds which will further pass on the benefit to the agri value chain. Research and Development should be encouraged for using innovative techniques to cut post harvest losses, collateral financing and agri loans with tax and other fiscal incentives.
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