BUDGET 2009-10
The UPA government's return to power sans Left parties has sent Corporate India's expectations soaring high. The stock market has already given the government thumbs up.
The mood among Corporate India honchos is quite upbeat. They are quite hopeful that the new finance minister Pranab Mukherjee will present a Dream Budget. They are hopeful that the government will move fast on the reforms front and hopes this Budget will address long pending reforms Bill like the Insurance sector reforms – hiking FDI caps 26% to 49%. Similarly, they are hoping for a smooth passage of the Pensions Bill reforms; Enactment of the Banking Regulation Amendment Bill. The Corporate Sector is also hoping that the government would open up the Higher Education sector for foreign participation.
While expecting substantial incentives and a strong push for growth, Corporate Chieftains are also hopeful that the government will do its book-balancing by going for PSU Disinvestment. Some say government could mobilise around Rs 50,000 crore this year through disinvestment alone. With stock market looking up this could be an opportune time.
Essentially, they are hoping also that while widening the tax base, the government will also bring down corporate taxes, put an end to subsidy (already it is talking of bringing down fertilisers subsidy by Rs 60,000 crore this financial year 2009-2010.
Of course, the government will push infrastructure spending as it will give a big fillip to the economy. Here it is hoping that the Land Acquisition Act needs to be revamped completely so that Infrastructure project does not get delayed. The industry body CII feels that public-private partnership models needs to be made into a robust working model so that infrastructure gets a real boost.
To sum it, the corporate sector is pinning its hopes on the budget 2009-10 to lend a big push to growth.
Some of the key issues that corporate india likes to be addressed are:
- Surcharge and cess to be abolished, so as to have one single rate of taxation.
- Fringe Benefit Tax to be abolished or to be allowed as a credit against income tax or MAT payable.
- MAT should be abolished, or at least the increase in the rate should be withdrawn i.e. to be brought down to 5%.
- Exports sector-- Removal of sunset clause for STP units u/s 10A and EOU u/s 10B.
- Adhere to schedule of introduction of GST w.e.f 1st April 2010 and for this purpose, announce time schedule for each important step such as :Most preferred option is a unified, single rate of 12% for GST = this would be the biggest stimulus package for economic revival and the first step towards unification of the Indian market.
- Central Sales Tax (CST) Reduce CST rate from 2% to 1%.
- Wealth Tax to be abolished.
- Commodity Transaction Tax to be withdrawn.
- Pension and insurance fund reform (Fast Track PFRDA)
