Indian Budget Lays Definitive Roadmap for Future

A panel discussion on ‘Implications of Union Budget 2020 – 21’ was organised by MVIRDC World Trade Center (WTC) Mumbai and All India Association of Industries at WTC Mumbai. Dr. Sachchidanand Shukla, Chief Economist, Mahindra Group said, “Union Budget 2020-21 will revive growth through fiscal policies. Higher allocation for green revolution such as contract farming, land leasing and reforms in APMC are praiseworthy. Implementation of National Logistics Policy and Education policy will be difficult owing to coordination required with states. The government is promoting ‘Assemble in India’ to support ‘Make in India’ which is working well in sectors such as smart phones.”

Dr. Shukla further said the government expects divestment proceeds to the tune of INR 2.1 trillion in FY21, of which INR 1.5 trillion seems achievable with the help of LIC, Air India and BPCL divestment. However, this huge target along with non-tax revenue receipts pegged at INR 4 trillion appears over ambitious. He also suggested that the disinvestment proceeds should be utilised towards funding infrastructure projects.

Mr. M. S. Mani, Partner, Deloitte India said, “The products where customs duty is raised are the ones where Indian companies have self sufficiency. It seems that the efforts are to tax products that are not of national interest. The focus on tightening of ‘Rules of Origin’ is important, considering widespread instances of misuse of FTAs by certain countries. The introduction of new Health Cess to promote Make in India in certain healthcare products should encourage their manufacturing and help in strengthening India’s position in pharma and healthcare sectors in international trade.”

Mr. Firoze Andhyarujina, Senior Counsel, Supreme Court said, “As regards to income tax provisions, the budget is fraught with complications. Introduction of a choice-based income tax regime will make it complicated especially for employers to calculate tax liabilities of employees and thereby applying TDS. Abolition of DDT (dividend distribution tax) will create difficulties for individuals. Further there are no benefits for senior citizens and women. If perequisites exceed INR 7.5 lakhs, the excess will be taxed. This can be termed as ‘Upper Middle Class Tax’. Multiple instances of TCS, i.e. tax collected at source at 5% will further make individuals and corporate shelling out more tax.”

In Photo:

From (L-R): Ms. Rupa Naik, Senior Director, MVIRDC WTC Mumbai; Dr. Sachchidanand Shukla, Chief Economist, Mahindra Group; Mr. Firoze Andhyarujina, Senior Counsel, Supreme Court; Mr. M. S. Mani, Partner, Deloitte India and Y. R. Warerkar, Director General, MVIRDC WTC Mumbai.