Budget 2020- Make or Break chance
is currently on an inflection point where the big businesses/ companies are
becoming bigger and the SME is still not able to revive from the GST/ Note ban
shock. NBFC fund freeze is haunting both the SME as well as those sitting on
the Indian policy desk in Finance ministry
This budget will
lay down the path for the $5 Trillion economy vision seen by our PM. There are
many factors which need to be balanced in the right direction, so the fiscal
and growth both engines work to propel the economy in the balanced way.
Many expect this
budget to be a non eventful budget as most of the capital booster does are
already being announced by the FM before the budget, nevertheless BUDGET is and
always be a time of expectations, resolutions and commitment for Economy and
Indian markets both, with many factors ranging from slowing demand, low
industrial output and the overall GDP growth pegged at an 11-year low of 5%.Lets
see what expectations does India Inc has from the budget.
Tax cut sweetener: This
is the major demand from both the industry and tax payer community at large
this time. There is a major tax outgo for an
individual earning income between Rs 5 to 10 lakh. As the middle class is the
real growth driver of the economy a cut from 20% to 10% will add a cheer to the
Beneficiaries at large.
80C: This is a most
loved Income tax section by Tax payers, which ironically is not enhanced since
2014, despite a dynamic change in spending of individuals. This section mainly
includes investment in government securities, LIC, mutual fund ELSS along with
payments for children’s tuition fee and housing loan repayment etc.
cut for Partnership and LLPs:
Government got a historic applause when it tweaked the corporate tax cut on the
downside recently, but still MSME sector is on the Partnership or LLP mode of taxpaying,
where they pay around 30% plus cess. Section 32AC should be tweaked in order to
provide some relief to the ailing this business community.
specific boosters: Government
has done marathon meetings with almost all sector heads recently; we could expect
some specific sectors viz. NBFC, Real estate, Infrastructure etc.
Ex-chequer is feeling the heat of slowing GST collections and funding the GST
deficit of states, we could see a major recalibration GST tax regime where
there could be only two GST slabs covering the whole GST spectrum and a gradual
start of covering products like petrol and diesel in the GST regime.
Madam FM is
walking on a very tight rope this time with slowing of GDP and increase of
deficit, it will be very interesting to see the balance route taken by the
government this time and how the capital market participants sitting both in
domestic and international territories respond the to the Budget initiatives