Seminar on Union Budget 2018, Pune

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Begin:
02.02.2018 | 08:30
End:
- 11:30
Location:
The Crowne Plaza Pune City Centre

Moving from ‘Ease of Doing Business’ to ‘Ease of Living’!

The Indo-German Chamber of Commerce, Pune together with SKP Business Consulting organized a seminar on the Union Budget 2018-19.  Over 140 participants attended the event.

Union Budget 2018, being the last Budget of the government in its present term, was expected to be populist with an eye on the general elections to be held next year. In a heartening development in the context of Indian polity, the Finance Minister has refrained from being populist and presented a

Budget to boost the rural economy and small and medium enterprises. The Budget is largely focused on poverty alleviation, infrastructure development, job creation, healthcare and education.

The Finance Minister succinctly summarized the Budget proposals when he mentioned that the government is focusing on moving from the ‘ease of doing business’ to the ‘ease of living’. The government has aimed for an economic growth of 7.2% – 7.5% and the fiscal deficit has been pegged at 3.5% of GDP, which while not being entirely attractive, is largely realistic.

The government has made noteworthy proposals to uplift rural India and has aimed at providing relief where it is needed the most. For instance, India is set to launch a government-backed healthcare program covering 500 million people, which, in the Finance Minister’s own words, would be the largest government-backed health-care program in the world.

On the tax front, the corporate tax rate has been reduced to 25% for companies with a turnover of up to INR 2,500 million (INR 250 crore) in financial year 2016-17. This will cover all the Micro, Small and Medium Enterprises (MSME) and can enable them to make further investments in business.

India continues to be a thought-leader in dealing with emerging tax issues. The Budget includes provisions to tax the Digital Economy on the basis of significant economic presence in India; operational details of which will evolve in due course.

The personal tax regime has been kept largely revenue neutral with certain smaller benefits presented and certain benefits taken away. As expected, a tax of 10% has been levied on long term capital gains on the sale of listed equity shares and equity oriented mutual funds. The rationale for this tax is not only revenue mobilization but also a macroeconomic objective of ensuring that surplus funds are invested in real business and not only in financial assets.

On the indirect tax front – the Budget proposals were focused on the Customs legislation since decisions on GST is now in the hands of the GST Council. The Customs rate related proposals were a ‘calibrated departure’ from the previous Budgets i.e. majority of products saw a hike in duty of up to 1.5/2 times. The legislative proposals under Customs, however, were extraordinary as they sought to introduce the required machinery for facilitation of customs automated systems, reduction of unnecessary litigation and engaging with foreign boundaries for exchange of information.

Overall, the Budget has a socio-economic flair and reflects the focus areas of the government. All in all, we consider the Budget to be a balanced one without any populist adventures. While it may not be practically possible to satisfy the expectations of all stakeholders of the economy, the Finance Minister needs to be applauded for presenting a Budget that envisions the country’s long-term development.

For more information please write to Monaz Desai Tantzscher on monaz.desai(at)indo-german.com