Budget 2019 India: The digitalisation and faceless electronic tax assessment will provide huge comfort to taxpayers saving transaction time and cost.
By Sharad Kumar Saraf
Union Budget 2019 India: The first budget of the new government clearly reflects the road map for the New India which meets the aspirations and expectations of the millennials both in rural and urban India. The focus of the Budget has rightly been on social issues, but it adequately addresses the concerns of Indian entrepreneurs. It aims to develop an eco-system based on trust, transparency and equity. I am hopeful, the trust reposed by the government would be responded by the trade and industry so that we enter into a win-win situation.
The global liquidity crunch and almost banking paralysis at the home turf have compounded the problems of exporters. Export credit disbursement declined 22% in 2018-19 despite almost double-digit growth in exports. Rs 70000 crore allocated to public sector banks for recapitalisation will help in easing the flow, benefitting manufacturers as well as exporters. Continuance of 2% interest subvention will reduce the cost of credit for MSME though I am looking forward for general reduction in the interest rate by the banks.
Watch FE Explained video: What is Union Budget?
Proposed investment in infrastructure in next five years along with flagship programme of Sagarmala and Bharatmala will improve logistics, reduce transportation cost and increase competitiveness.
The e-invoice, to be introduced in January 2020, will revolutionise the transportation and help in reducing overall logistics cost. Merging of all Labour Laws into four codes would help in simplification and easy compliance.
Pradhan Mantri Matsya Sampada Yojana for robust fisheries management framework will give a boost to marine exports from the country, which declined in recent times. While we are the world leader, but we are nowhere near our potential. Such an exports would help in doubling farmers’ income as well. The cluster-based scheme for bamboo, honey and khadi will not only create employment benefitting artisans but such products have huge demand and e-commerce marketplace should be exploited to give remunerative returns to artisans.
The thrust on exports of GI products would also help local artisans/farmers, besides encouraging state governments to identify more such products for preserving our heritage or produce. The sports goods exporters will now be able to import foam/EVA foam and pine wood duty-free adding to their competitiveness. The reduction in export duty on hides and skins and tanned/untanned leather would open up their exports. However, I hope that sufficient quantities would be available to value-added exporters in the country.
Increase in customs duty on gold, silver is basically intended to check excessive import of gold much more than what was required for gold jewellery exports, accentuating the trade deficit. Since the exporters of jewellery have the option to get gold from banks/nominated agencies free of customs duty, the increase tariff will have no impact on our jewellery exports.
Increase in the threshold limit for lower corporate tax from Rs 250 crore to Rs 400 crore is a welcome move though industry was expecting this to be available for all corporates. Many US and Chinese companies are exploring the possibility of shifting to India to avoid high tariff but lower corporate tax may be a dissuading factor. For attracting investment from these nations as well as from corporates with turnover of over Rs 400 crore, investment linked tax deduction may be extended so that additional capacities are created to give a flip to jobs.
The digitalisation and faceless electronic tax assessment will provide huge comfort to taxpayers saving transaction time and cost. Such a move will encourage people to come forward adding to the tax base of the country.
The real challenge lies in implementing noble intentions. However, if the track record of implementation of Ujala Scheme or Rural Housing Scheme is any indication, we are assured that we are ushering into a 5 trillion economy, an equitable and inclusive economy.
(The author is President, FIEO)