Welcoming the Union Budget, the Bangalore Chamber of Industry and Commerce (BCIC) called it as a “Positive, balanced and a growth-oriented budget” that boosts macro-economics of the country, with specific emphasis on the development of core sectors for the next five years, especially the industry, infrastructure, agriculture and rural sectors which will ultimately translate in employment generation.
Finance Minister Smt. Nirmala Sitaraman presenting the National Democratic Alliance (NDA) Government’s first budget under Modi 2.0, has sought to address agriculture distress, create jobs, increase disposable income for masses and boost economic growth while at the same time stick to fiscal prudence.
The hallmark of the Finance Minister’s presentation was a promise of containing Fiscal Deficit for FY19-20 to 3.4 percent of the GDP without compromising on the spending on development schemes despite increasing oil bill which is putting severe burden on the Fiscal Deficit.
Welcoming the Union Budget 2019-20 Mr. Devesh Agarwal, President-BCIC said: “The Budget has a slew of policy-oriented announcements and targets to build rural and urban economy, create jobs, boost infrastructure, promote MSME sector, further integrate digital India, improve social and agriculture sectors and investments on core sectors, which we believe will spur overall economic growth as it clearly sets the right direction for current fiscal”.
Mr. Devesh Agarwal further said: “With the implementation of GST, there is a growing confidence in the Government’s ability to take on difficult reforms in India. The improvement in investor confidence is evident from capital flows as foreign investors continue to bet on India as one of the best destinations for investments across the emerging markets.”
“Reforms in power, financial sectors, PSE disinvestment, labour reforms and similar Macro-economic policies are all welcome measures which will provide the right impetus to boost the economy to touch the US $5 Trillion economy that Modi Government is aiming” he added.
Commenting on the rural India thrust Mr. Agarwal lauded the government’s proposal to provide every household in the country electricity connection and allotting LPG connections under the Ujjwala Yojana. In the same vein, he also commended the government proposing to allot homes to all by 2022 under PM Awas Yojana. Mr. Agarwal said that providing land from public sector enterprises for affordable housing will help solve land acquisition problems.
Another important announcement proposed by FM is related to creating seamless connectivity through road and port, this will bridge rural and urban divide and create direct and indirect jobs and business opportunities simultaneously. Similarly, FM’s proposal to improve skillsets of youth in neo areas such as Artificial Intelligence, Big Data, Robotics and cloud computing which are valued highly within and outside the country will ensure they can secure high paying jobs both in India and abroad is a welcome measure. Similarly, the reforms proposed for education sector will transform India into a knowledge economy and will significantly improve human capital with rising aspirations.
One important proposal that Bangalore will directly benefit is the announcement by FM to create MRO (Manufacturing, Repair and Operate) industry. Mr. Devesh Agarwal said: “BCIC has been in the forefront pushing this sector as we see a huge business opportunity. We in fact had proposed old HAL airport to take up the role of a MRO base. Today we are happy that FM has considered this proposal and since Bangalore is the right international hub for MRO, we will partner with the Government to see that MRO is brought to our city.”
The Government’s proposal to streamline multiple labour laws into a set of ‘four labour codes’ is also a good announcement which basically will lessen litigations.
Mr. K R Sekar, Chairman, Direct Taxes Expert Committee-BCIC commended the Government for increasing the turnover slab of corporate tax. He said: “Currently, 25 percent corporate tax rate is applicable to companies with an annual turnover of up to Rs 250 crore. This has been extended to companies with turnover of up to Rs 400 crore. That means now only a small fraction of companies will remain outside of this 25 percent rate.”
Further the proposal to abolish Angel Tax through a disclosure mechanism in the returns and the accompanying forms is a welcome measure, aiming to address one of the demands of Start-ups in India. Further making the E-assessments through centralized IT cell is also a welcome measure, aiming to address the challenges arising on the tax assessment.
In conclusion, Mr. Agarwal Said: “The Budget tries to provide a stable, predictable and consistent policy framework to facilitate long-term investment decisions. The Finance Minister has done a balancing act by focusing her attention on all sectors without overtly hurting or appeasing any individual section of the society and all the policy initiatives seamlessly integrate with the introduction of GST. Further the budget has all essential ingredients to achieve the desired growth rate of 7 per cent as projected by the Government for the current fiscal.”