Budget 2020 Financial Express Online survey: In the run-up the to Budget, Financial Express Online surveyed economists to find out the top two immediately doable ideas the Central government can take up on Saturday (February 1).
Budget 2020 Financial Express Online survey: People’s wishlist from Finance Minister Nirmala Sitharaman’s Budget Speech presentation on Saturday is growing longer. However, the Budget document can’t address all ideas, or fulfil wishes of everyone. At best, the government may take up some immediately doable ideas that would help the economy and the people in the long run. In the run-up the to Budget, Financial Express Online surveyed economists, policy analysts and experts to find out the top two immediately doable ideas the Central government can take up in the Budget. The ideas shared by the economists vary from tax to economy to infrastructure to agriculture and more. Take a look:
For economy, Vikas Vasal, National Leader – Tax, Grant Thornton India, suggested that the PMO should take up, or supervise, the top 25 infrastructure projects of the country and ensure all roadblocks are removed. Also, all sectors should be opened for 100% FDI under automatic route, except for strategic sectors like Defence.
Vasal also said that the government should bring an attractive Amnesty scheme for past litigation cases in Direct Tax and avoid unnecessary disputes and litigation, which costs time and effort on part of both the taxpayer and tax administrator.
The Budget should raise the allocation for MNREGA and use the scheme for building low-cost storage infrastructure in rural areas, said Ranen Banerjee, Leader Economic Advisory Services, PwC India.
“Put significantly high allocation to MGNREGA and utilize the same for building low-cost storage infrastructure in rural areas for the farmers to store their produce and manage supply for better price realization,” said Banerjee.
“Announce all payments for procurement of goods and services by the government within 30 days and enforce the same. It will have twin benefits – first, it will lead to savings for the government by way of lower cost of procurement as the suppliers will pass on some of the working capital cost and second it will free up the working capital locked in the system thus helping companies to grow their scale of operations without getting constrained by working capital credit availability,” he added.
Sachchidanand Shukla, Chief Economist, Mahindra Group, was of the view that the Budget announcements should “use the leeway of 50 basis points to create infrastructure and augment incomes.” Income Tax structures should also be simplified, he added.
A leading financial lender made the following two suggestions:
- Though this may not strictly be connected to the budget, a one time restricting of the real estate loans with effective conditions will help. This will not need any fresh funds from the government and will not impact the fiscal targets but at the same time, it will provide much-needed relief to the real estate sector. Restructuring of loans will allow more lenders to come in and provide funding for stuck projects with proper safeguard and the project can be completed. This was done in 2008-09 and it worked extremely well.
- Capital Gain Tax – Introduction of LTCG on sale of shares which included grandfathering clause has created a lot of confusion and I guess tax collected by the government on this may not be significant to compromise on the negative sentiment in the market which can turn positive if LTCG is removed.
According to DK Srivastava, Chief Policy Advisor, EY, the Budget can focus on reforms on personal tax front in terms of simplifying the structure. Also, aggressive investment in infrastructure should be made.
Radhika Rao, Senior Vice President & Economist at DBS Bank, said the Budget should provide relief to NBFC and Asset Quality Review (AQR) system should be introduced for NBFCs and HFCs.
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Anita Gandhi, Whole Time Director, Arihant Capital Markets Ltd said that Budget should have provisions for making use of large talent pool of economy and support new emerging businesses.
“A bad bank for NBFCs/ A TARP (Troubled Asset Relief Program) sort of program to deal with toxic assets in the NBFC sector. And, Focus on Direct Benefit Transfer – improving implementation and coverage of schemes like PM-Kisan, expanding DBT to food and fertilizer subsidies,” suggested a large private sector bank.
Indranil Pan, Group Economist, IDFC FIRST Bank, said, “On the agricultural front, the targets for MNREGA should be revised. This will help create infrastructure. That’s the biggest thing that has been missed out on. There is need to make PM Kisan and MNREGA funds fungible.” He also said that eNAM needs a relook.
Shubhada Rao, Chief Economist, YES Bank, suggested the recreation of long term financial institutions – Development Financial Institutions ( DFIs ) for Infra Financing.