India Inc today said the budget builds a positive sentiment that government will take all steps to boost growth with its focus on rural economy and infrastructure but rued no cut in corporate tax for large companies. “Overall a safe and balanced budget, which could have been bolder. Good allocations for rural development, affordable housing, agriculture and infrastructure sectors. Some incentives for MSMEs but corporate tax reduction linked to job creation and investments was missing which would have spurred much needed private sector investment.
“Removal of FIPB is a good move which will ease FDI inflow. Sadly no impetus for exports, science & technology, manufacturing sector which would have boosted the Make in India initiative,” Biocon CMD Kiran Mazumdar-Shaw said.
However, while welcoming reduction in income tax for smaller firms to 25 per cent, a section of India Inc rued that larger firms did not get relief in the form of lower corporate tax.
“This Budget would tremendously strengthen the economic muscle of the country. It is directionally correct, fiscally prudent and strengthens the governance fabric of the nation,” Ficci President Pankaj Patel said.
Softening the demonetisation blow, the Budget for 2017-18 today halved the tax to 5 per cent on income up to Rs 5 lakh but proposed a new surcharge of 10 per cent on income between Rs 50 lakh and Rs 1 crore, and raised duties on cigarettes and pan masala while stepping up allocations for infrastructure, rural, agriculture and social sectors.
Finance Minister Arun Jaitley presented a historic Budget in which the railway budget has been merged. He retained the 15 per cent surcharge on taxable income above Rs 1 crore. He also slashed the income tax for smaller companies with annual turnover up to Rs 50 crore to 25 per cent, to make MSME companies more viable and also encourage them to migrate to company format.
“While the reduction of corporate tax for the small and medium enterprises with turnover less than Rs 50 crore, is a welcome move, the India Inc was expecting it for large firms as well,” Assocham President Sunil Kanoria said.
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Mahindra Group Chairman Anand Mahindra tweeted that he was “elated” by the reforms in political funding, merging of the rail budget, abolition of FIPB and removal of plan/non-plan labels.” CII Director General Chandrajit Banerjee said, “Overall, the Budget builds positive sentiments among Indian industry and overseas investors that the Government would remain on the path of fiscal prudence while taking all possible measures to boost growth”.
PHD Chamber of Commerce President Gopal Jiwarajka said, the government has provided a balanced budget to strengthen the economy from grass roots. tax benefits to small tax payers, MSMEs and infrastructure status to affordable housing are encouraging and would pave the way for a higher growth trajectory.