Union Budget 2016-17: What industry leaders expect
Implementing the Goods and Services Tax, however, remains one of the promises that the government still has to deliver.
Implementing the Goods and Services Tax, however, remains one of the promises that the government still has to deliver. (Illustration by C R Sasikumar)
Finance Minister Arun Jaitley will be unveiling the Union Budget for the financial year 2016-17 on February 29. The previous two Union Budgets saw the Narendra Modi government, in a bid to boost investment and economic growth, offer incentives to businesses.
Implementing the Goods and Services Tax, however, remains one of the promises that the government still has to deliver.
The highlights of last year’s budget were 100% deduction for contribution to Swachh Bharat and Clean Ganga projects, service Tax rate hiked to 14%, from 12.36%, and incentivised use of credit, debit cards.
Here are the expectations from business leaders on Union Budget 2016-17:
Ankur Bhatia, Executive Director, Bird Group on aviation industry:
“The Indian aviation industry is on a high growth trajectory and is poised to become the third largest travel market by 2026. The draft aviation policy as well as airport development in tier-I and Tier-II cities is a welcome move in identifying certain relevant aspects affecting the aviation sector. Yet there are several challenges related to complex policies, aggressive price cuts, multi-tiered tax system and infrastructure deterring the true potential of the Indian aviation industry. I look forward these challenges to be addressed in the upcoming union budget. There is an immense growth potential for Indian civil aviation and with the right infrastructure and policies will serve as a key enabler for economic growth, employment creation and tax revenues. It is imperative that success of civil aviation is seen as a national priority, a goal shared by different ministries, government agencies and the industry.”
On tourism:
“Tourism has been a key contributor to the Indian economy with immense possibilities of growth. While the government’s initiatives to strengthen domestic connectivity as well as international accessibility have borne positive results, there is a huge gap in terms of travel facilities, infrastructure, hotels, recreational outlets, high taxes and tourist safety that still needs to be addressed. A thriving tourism industry not only reinforces the hospitality sector but contributes significantly to the economic growth and drives direct and indirect employment. This union budget we are hopeful that the government will focus on the overall environment of the tourism industry and help drive the industry towards its projected growth. It is time to showcase brand India globally and provide sufficient impetus to put India firmly on the international tourist radar and we are hopeful that the government will consider effective solutions for the same.”
Sunil Jose, Managing Director, Teradata India on IT/BPO industry
“India has developed a world-class IT industry that has contributed significantly to its economic growth, technology exports and employment generation. The Modi government is doing a great job in projecting India as a capital investment hub and business-friendly destination and the focus on bringing back investor confidence has worked well for the IT/BPO industry since the last budget announcement. We expect this to have a cascading effect in terms of continued business growth when the new budget is announced. New initiatives announced in the budget to further complement previous initiatives are eagerly awaited. Continued measures and policies to support and enhance India’s competitiveness for Make in India will be a huge enabler for the manufacturing sector. Greater support for Digital India initiatives and enhancing access to internet connectivity in rural India should be a priority to boost economic growth and income-generating activities which in turn will boost domestic spending. The government should also consider reducing excise duty on hardware so that better technology becomes more accessible to a wider market. This would be a huge enabler to the IT industry including us and help provide superior technology to a wider audience at more competitive rates.”
Anuj Puri, Chairman & Country Head, JLL India on real estate:
Offer financial protection from project delays to home buyers
The Union Budget should pay specific heed to this pressing need. On purchase into an under-construction property, buyers can only claim tax benefits of Rs. 2 lakh after possession if construction is completed within three years. The benefits reduce to Rs. 30,000 if the builder delays construction beyond this – and they pay higher interest. First-time home buyers purchasing properties for self-use additionally pay rent.
Instead of allowing home buyers tax benefits post-possession, the Union Budget should make a provision that allows these from the time they start paying interest on housing loans. This will ease their monetary burden considerably and make increase the velocity of home loan disbursements. Similarly, if an under-construction property is purchased from capital gains, its construction must be completed within three years of its sale to avail exemption. There can be delays by developer in such cases too. These deductions should be brought at par and the construction timeline should be extended from the current three years to five years.
Provide more tax saving on housing loan and house insurance premiums
The government should increase the tax deduction limit for housing loans, especially for buyers in metropolitan cities. The current limit of Rs 2 lakh is insignificant given the ticket sizes in cities like Mumbai, where most houses are priced at Rs 1 crore and above. Also, tax concessions on house insurance premiums could be introduced to encourage end users to insure their homes. Similarly, the tax exemption limit should be increased by about Rs 1 lakh and be auto-set to match inflationary trends in a financial year.
Raise house rent deduction limit
Salaried persons get house rent allowance (HRA) as a component of their total salary, and can therefore claim a deduction. This deduction can be substantial in cases where the salary and its HRA component are higher. However, self-employed persons and those who draw lump sum pays without an HRA component can only claim a maximum deduction of Rs 2,000 a month under Section 80GG. The Budget can and should address this anomaly.
Source :- The Indian Express
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