Mr. Hemindra Hazari
Head of Research
Karvy Stock Broking
Simplification and Rationalization of the Contemporary Tax System would be on the wish list as the Government of India should not allow the deadlock on GST (Goods and Service Tax) to remain for an extensive period. It should finish the legal procedures by discussing with the various states and settle all unfinished matters associated to the implementation in order that the new taxation system can be introduced from April 1, 2012 to permit current players to devise their ventures and include their cost of operation. At this moment, it is highly advised that the rate of CST should be cut down to minimum 1% wef from April 1, 2011.
Infrastructure development is the core ingredient to attain and sustain 9% or perhaps double-digit economic growth. Government needs to roll out few incentive schemes to encourage private sector participation and step up investment in the infrastructure sector, especially in power, road, telecom, ports and airports projects
In order to boost Agriculture the government should introduce positive initiatives to attract investments in this sector. Since giving subsidy on fertilizers would impact its subsidy bill which is already stretched due to higher global crude prices, so the expectation from the government would be to come up with a nutrient based policy which favors the fertilizer manufacturing companies.
IT industry has also been contributing immensely to the GDP and to keep the momentum on, industry would appreciate government to oblige by simplifying the tax structure that would encourage investments in the sector and also extend tax benefits under the Software Technology Parks of India (STPI) scheme.
From a common man’s perspective, tackling inflation would be of utmost priority along with continuation of stimulus packages. Considering the present inflationary pressures in a difficult macroeconomic environment, we would expect that the rate of basic customs duty should be brought down.
Mr. Debasis Chatterji
CEO
Netxcell Limited
The real challenge for the Honorable finance minister is to maintain the growth rate at around 8% while controlling the inflationary pressure in one hand and keeping the money supply to the market intact on the other hand.
So, I would expect that the government will not only take necessary steps to control the inflation but also ensure that the accurate quantity of money is supplied to the markets to enable the GDP growth at around 8-9%.
Mr. Ramesh Loganathan
VP – Products and Managing Director
Progress Software-India
I would like to see incentives in the IT act for promoting new Software startups and Product companies based on intellectual property/original product creation which is again a key element to ensure that the industry is forward looking beyond just services. From an IT sector perspective, I would definitely expect the government to extend the STPI tax benefit under section 10A & 10B of Income tax act considering that the industry is on a rebound now it will be good to extend this for some more time as that will help further fuel investments pumped back into the growth of the industry.
Another aspect that I am expecting from the Union Budget this year, is Funds allocation, possibly as part of extending the National Skills Development program that promotes more research scholars and PhD candidates in the universities which is again essential if we were to look forward some years ahead since for a country our size, with the large number of universities and science & tech graduates, we have a dismally low number of PhDs.
Mr. Suman Reddy
Managing Director
Pegasystems Worldwide India (P) Ltd.
“Fiscal consolidation, inflation and growth will form the core of issues for Budget 2011 and the expectations from Honorable Finance Minister Sri Pranab Mukherjee will be to come up with policies and measures to provide a better balance for the key issues. From an IT perspective, a definitive statement on the extension of STPI scheme under Sec 10 (A) is anticipated. The real benefit of this can be attained when the Tax benefits under this scheme are extended to not just big Corporations but also to entrepreneurs and new businesses. In the current scenario, only those companies located in a SEZ get Tax benefits and I hope, Finance Minister would earmark budget this year and create alternative schemes for entrepreneurs and new entrants, so it provides level playing field for the smaller companies to compete with the established ones. Also, I hope to see PPP model (public-private partnership) being adopted in the education sector as it would establish success and create sustainable growth in long-term. While the government’s role could be that of funding the projects, it is the execution ability of the private sector which needs to be banked upon for successful implementation of the model.”
Mr. Samson Arthur
GM (India)
Quinn Group
With Indian and Global economies moving away from turbulent times and returning to normalcy, certain measures in Union Budget 2011-12 will aid speed-up the growth process. And I hope Finance Minister Sri Pranab Mukherjee will present a budget that will augment growth and prosperity in every aspect in India.
While, Finance Minister Sri Pranab Mukherjee has certainly presented a very good Budget last year, best suiting the need of the times then; similar progressive measures are expected from him this time around too.
I recollect a famous quotation of Mahatma Gandhi who said, “Democracy is the art and science of mobilizing the entire physical, economic and spiritual resources of various sections of the people in the service of the common good of all.” And I sincerely would like to see this budget uniting our capabilities to build a better tomorrow.
Personally, I would like to see an increased focus on infrastructure development – an aspect which can propel India to a new level of auto-accelerated growth. With this we could certainly expect the GDP to exceed the highs from previous years.
Mr. Hari Kiran Chereddi
Managing Director
Sujana Energy
The Indian Union Budget for 2011 should focus on creating an outward/International M&A focused environment. This will not only ensure increase of Indian companies foot print to access more resources, better manufacturing skills but also to diversify the overall debt portfolio. As case point being China’s huge move towards international acquisitions in the areas of Energy, Natural Resources, etc.
However, to protect local manufacturing industry import & anti-dumping duties may be continued if not majorly increased.
Mr. Mukul Somany
Vice Chairman & Managing Director
Hindusthan National Glass& Industries Ltd.
· Incentivizing exports:
HNG believes that the DEPB scheme is an excellent initiative, which must be continued and rates should also be increased to 10%. Duty Entitlement Pass Book (DEPB) is a scheme which is offered by the Indian government to encourage exports from the country to neutralize the incidence of basic and special customs duty on import content of export product. This is provided by way of grant of duty credit against the export product at specified rates.
· Cutting down production cost:
The Company also considers that removal of custom duty on soda ash, which contributes to nearly30% of the production cost, zero import duty on packaging machinery, reduced excise duty and input costs on capital goods, infrastructure development, new technology, etc. will help bring down the cost of glass and glassware in India.
According to Mr. Mukul Somany, Vice Chairman & Managing Director, Hindusthan National Glass& Industries Ltd. – “Glass packaging sector is poised to grow consistently and continuously in the coming years at the rate of 10-12% owing to the growing awareness about health and hygiene, and eco friendly packaging products. Also the intake of Indian Made Foreign Liquor (IMFL), which is growing at a considerable rate of 15% annually, will have a fair share in the growth of the industry. Therefore, in order to realize this growth momentum, it is crucial to multiply capacity. Besides, the reduction of inputs cost on packaging material by removal of custom duty on soda ash, lower excise duty on packaging machinery, lower input cost on capital goods, new technology etc will also provide huge impetus to our industry and encourage the corporate sector to invest more and more funds on growth and development.”
Retail Sector
Mr. Dharmendra Jain,
Vice President – Finance & Business Development, HyperCITY
1. Kind of reforms expected by the retail sector of the country
The major impetus expected is that the policy should enable consumption growth which may happen by providing increased disposable income in the hands of the consumers, which is reduction in income tax rates or enhancing the income tax exemption limits and enhancing the slabs at different tax rates . The GST reform would be one of the major reforms which would benefit the retail sector in a great way as this would enable easy flow of goods between states and would reduce the double taxation and reduce overall cost of operations across country.
2. Will Service tax on rentals be revisited as removing this could positively impact retailers’ margins and therefore impact prices
Majority of retail shops of more than 1000 sqft are being operate don rental and the service tax introduction on rental has negatively impacted the profitability of the retailers. We hope that the government would take a pragmatic view on this matter and would provide relief on the service tax on rental , which would enable the retailers to drive growth at much faster rate.
3. Expectations on the FDI front
FDI on multi brand retail has been widely discussed and there is huge amount of momentum at the government department level to drive this initiative. Currently the govt has invited the views on the proposed reforms and would require to drive the consensus before any policy announcement.