Kolkata: Complimenting Finance Minister Nirmala Sitharaman on her maiden Budget placed in Parliament yesterday, Mr Vishal Jhajharia, President of Merchants' Chamber of Commerce & Industry (MCCI) said that the Union Budget 2019-'20 is a well-balanced one and it will provide a boost to the Industry, the social sector, and the rural economy.
Welcoming the many pro-growth measures, Mr. Jhajharia said the annual turnover limit for 25 percent Corporate tax raised to Rs 400 crore from Rs 250 crore. This would cover 99.3 percent of the companies operating in the country and boost industrial activity and growth.
"Opening up of the Civil Aviation, Insurance & Media sectors to more FDI would provide more growth stimulus to these key sectors. Especially the proposed enhancement of FDI in Civil Aviation will bring the necessary investments and would lead to healthy competition and could also ease the proposed divestment of Air India. Allowing 100 percent FDI in Insurance Intermediaries will help in the growth of the Insurance sector," he stated.
Mr Jhajharia said, For further encouraging the critical MSME sector the Govt. has announced a few good measures including - 2per cent interest subvention for GST-registered MSME on fresh or incremental loans ; extension of pension benefit to retail traders with annual turnover less than Rs 1.5 crore; easing of angel tax for startups ; proposal to commence an exclusive television channel for start-ups etc. Funds raised by Startups will also not face any scrutiny by the income tax department.
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Proposal to provide Rs 70,000 crore capital for PSU Banks will help in the rejuvenation of the banking sector and could further reduce NPAs, he pointed out. The NPAs recovery of Rs 4 lakh crore has been done over the last four years, NPAs were down by Rs 1 lakh crore in the last one year, he mentioned.
"The proposal to let FIIs and FPIs invest in debt securities issued by NBFC, would provide a much-needed boost of capital to a sector now starving of capital and this is an important impetus to several sectors, particularly, real estate and automobile which are reeling for lack of finance to purchasers/buyers,"he said.
He said the Govt. has announced a number of positive steps for the Education sector like the unveiling of a new National Education Policy; allocation of Rs 400 crore for world-class higher education institutions in FY20; creation of a National Research Foundation for funding, coordinating and promoting research in the country.
"These will strengthen the education infrastructure and will create a stronger human capital pool," he felt.
"In order to provide a stimulus to the rural economy & the Agriculture sector, a number of critical steps have been taken - New Jal Shakti Ministry will work with states to ensure "Har Ghar Jal" for all rural houses by 2024 ; Pradhan Mantri Gram Sadak Yojana phase 3 is envisaged to upgrade 1,25,000 km of road length over the next 5 years with an investment of Rs 80,250 crore ; Every single rural family to have electricity by 2022. The Govt. has also decided to set up 80 Livelihood business incubators and 20 technology business incubators in 2019-20 under ASPIRE to develop 75,000 skilled entrepreneurs in agro-rural industries," he stated.
"Interchangeability of PAN and Aadhaar for Income Tax Returns for those who don't have PAN cards will enhance ease of living. Introduction of Inter-operable One Nation One transport card, a National transport card for universal travel which can be used on various modes of transport (road, railways, etc) and also as an ATM card for withdrawing money, would improve ease of living, too," he said.
"Measures like the proposed implementation of more PPPs to unleash faster development and the delivery of passenger freight services and comprehensive restructuring of National Highways Programme for creation of National Highways Grid will further boost Transportation infrastructure.
Legacy dispute resolution scheme under indirect tax is a big move to clear the pending backlog of indirect tax disputes under the central laws covering central excise duty and service tax giving immediate revenue to the government," he said.
"Although there have been many pro-Industry announcements in the Budget, the move to raise income-tax surcharge in the highest tax bracket could be retrograde and could lead to flight of capital to other low-tax destinations,"he commented.
"Overall, the MCCI feels the Budget has sent out positive vibes to the Industry, and if the country can implement the measures announced in a time-bound fashion and maintain fiscal deficit targets, India can become a $3 trillion economy this year. We need to continue to take many more structural reforms to achieve a $5 trillion economic goal, feels the Chamber," Mr. Jhajharia concluded.