I expect this Budget should address three specific areas. 'Make in India' requires equity capital to entrepreneurs both at start-up and growth stages. Introduction of complete pass-through taxation for all AIFs (alternative investment funds) as well as ensuring the certainty of non-applicability of permanent establishment rules for India-based fund managers of India-focused foreign funds will be an important step.
On the policy side, an explicit roadmap for GST implementation and specific announcement on how the taxation regime is going to be simplified so that the tax payer is happy to pay all taxes. Ideally, this should be achieved by separation of tax collection from tax-policy making and the tax dispute resolution bodies. This way, the tax collectors are freed from the onerousness of line-item wise numerical targets, and instead, can focus their efforts on ensuring compliance of tax payers to tax codes.
As far as the priorities are concerned regarding government spending, the administration should actively and directly invest in the legitimate and core government role of building infrastructure - things like highways, roads, power plants, urban development as well as irrigation projects - rather than wishing it away on PPP, a vehicle that has not worked well in India, for many macro policy and micro-economic reasons.
As told to Sarika Malhotra
Gopal Srinivasan is Chairman & Managing Director at TVS Capital Funds Limited.