you are here: HomeNewsBusiness
Live now
auto refresh
January 28, 2021 / 10:59 PM IST

Budget 2021 Highlights | Concessional corporate tax rate of 15% should be extended to new IT service sector ones: EY India's Tax Partner Ravi Mahajan

Budget 2021 Highlights: The Budget Session will commence from January 29 and the first part of it will conclude on February 15

Budget 2021 Highlights: The Union Budget 2021-2022 will be presented on February 1. According to PTI, the CCPA has said the Budget will be presented on February 1. President Ram Nath Kovind will address a joint sitting of both the Houses of Parliament on January 29. The Cabinet Committee on Parliamentary Affairs

(CCPA) also recommended that the budget session be held from January 29 to February 15. The second part of the budget session will be held from March 8 to April 8. According to Union Minister of Parliamentary Affairs Pralhad Joshi, the Budget Session will commence from January 29 and the first part of it will conclude on February 15. "In the first part, Budget and President’s address will be there, necessary bills will be taken and there will be question hour as well as zero hour," he told ANI.

Expectations

COVID-19 and its spread have left a devastating trail of destruction across the economic landscape, blowing into smithereens the very framework of orthodox fiscal policy planning. The lockdowns and the prolonged restrictions have forced many a company to shut or curtail operations, lowering the government's tax collections. Gross domestic product (GDP)—the total value of goods and services produced in the country—fell 23.9 percent in April-June 2020, and then again by 7.5 per cent in July-September.

India has now slipped into a technical recession, which takes place when real or inflation-adjusted GDP contracts in two successive quarters. From being toasted as an engine for global growth with the status of the world’s fastest-growing major economy, India’s GDP has fallen for two successive quarters. The bigger question now is: how long will the impact last? Will it last for months or for years, if social distancing measures need to be kept in place for protracted periods?

Expectations are running high on the Budget 2021-22 for “big-bang measures." The Union Budget may just be the right occasion to be a little more courageous and to press the foot on the accelerator.

Full coverage of Budget 2021
  • January 28, 2021 / 10:56 PM IST

    This Budget live blog has concluded for the day. Please check the MoneyControl website for latest updates on Budget 2021 and other stories. 

  • January 28, 2021 / 10:51 PM IST

    Budget 2021 Startup Expectations | Concessional corporate tax rate of 15% should be extended to new IT service sector ones: EY India's Tax Partner Ravi Mahajan

    Budget 2021 will be presented on February 1 in the backdrop of a pandemic that has profoundly changed the economic landscape not only in India, but globally. Having tackled the downturn head on, the government issued a slew of fiscal incentives, with the year seeing highest quarterly GST collections. However, direct tax collections have understandably slowed.

    With India Inc. looking upwards towards recovery from an overall economic slump, ensuring stability and impetus for growth should be key in this Budget. While the government is likely to incentivise each sector, as the global epicentre for information technology, performance of the Indian IT industry is likely to be crucial.

    The recent reductions in tax rates for domestic companies have been greatly appreciated, and they should be extended to non-corporate domestic taxpayers as well. Not permitting the claim of unutilised Minimum Alternate Tax (MAT) paid in earlier years has been a dampener in opting for the 22 percent regime by those who have significant MAT credit accumulated and it is suggested that the restriction should be removed. The concessional corporate tax rate of 15 percent introduced for new domestic manufacturing companies should be extended to new service sector ones too, to place them on an equal footing.

    Read More Here. 

  • ADVERTISEMENT
  • January 28, 2021 / 10:11 PM IST

    Budget 2021 Startup Expectations | Accelerate growth by releasing the regulatory brakes: IndiaTech CEO Rameesh Kailsam 

    While multiple sectors of the industrial economy and ICT (Information and Communications Technology) have done their bit in bringing India this far, the next exponential jump for taking India towards a $5 trillion economy depends on the start-up story.

    Start-ups and disruptive business models are poised to lead India towards economic growth, innovation, ease of living, livelihoods and a connected economy. While the societal thinking shift is happening from job seekers to job creators, the entrepreneurial thinking is from India to the world. Read more here. 

  • January 28, 2021 / 08:52 PM IST

    Budget 2021 Expectations | Long-term financing institution for NBFCs will be right revival strategy for MSMEs: U GRO Capital MD Shachindra Nath

    U GRO Capital MD Shachindra Nath: 
    "The MSME sector is vital for India's economy, responsible for employing over 120 million people. Unfortunately, the sector was severely hit by the pandemic.  Aware of its importance, the government has already undertaken exceptional work with TLTRO, TLTRO 2.0, Partial Credit Guarantee Schemes, and the Emergency Credit Line Guarantee Scheme (ECLGS) in 2020. Rescuing the sector from the pandemic should be the top priority for the government in the upcoming Budget 2021.


     
    The crucial challenge would be to address lenders' risk appetite in the face of loan default fears. Lending can be encouraged by bringing the existing Credit Guarantee Scheme in line with the ECLGS.


     
    The government must also ensure that NBFCs can access liquidity. This, in turn, would give them the tools to support MSMEs. The 2021 budget needs to set up a dedicated institutional framework for the same (existing or new), which would provide credit enhancements to NBFCs in different formats. A long-term financing institution for NBFCs would be the right revival strategy to tide through a liquidity crisis.

    There are several schemes and systems in place to democratize credit in India, such as OCEN, account aggregators, and co-lending initiatives. The Budget should put into place a governance and oversight framework to protect customer interests. Provisions for the right framework and liquidity will empower them to digitize and make this the year of recovery for MSMEs."

  • January 28, 2021 / 07:46 PM IST

    Budget 2021 Expectations | Budget must promote a new social contract that commits to jobs, growth and sustainability: CEEW founder Dr Arunabha Ghosh


    Council on Energy Environment and Water founder and CEO, Dr Arunabha Ghosh: “India's Union Budget 2021 must promote a new social contract that commits to jobs, growth and sustainability along with a razor-sharp focus on tail risks, like pandemics and extreme climate events that can overturn years of progress in economic growth. The focus should be on investing in climate-resilient infrastructure and low-carbon technologies, revitailising MSMEs, ensuring food and water security, driving capital to accelerate India's energy and electric mobility transitions, and exploring innovative financing models for disruptive technological innovation. Each of these opportunities also creates additional jobs. 

    The resources for these interventions could come from a reform of energy and electricity subsidies, targeting those who need the support while increasing the competitiveness of industry. Similarly,  decommissioning old and inefficient thermal power plants can be a huge source of savings to the public exchequer. Finally, developing a circular economy and strategic reserves for critical minerals can increase India's energy and industrial security for the industries of the future.”

  • ADVERTISEMENT
  • January 28, 2021 / 06:46 PM IST

    Budget 2021 Expectations | Reducing cyclicality of rural household income may get priority 

    The central government is dealing with mounting expectations of strong reforms to stimulate growth amid a painful COVID crisis.  In recent years, the spending patterns have taken a hit due to implementation of demonetisation and introduction of GST. The COVID crisis has further disturbed the purchasing power as well as behaviour of consumers. Revival of consumption cycle remains a key priority in Budget 2021 to boost domestic growth as it forms the core of India’s GDP. Moreover, history suggests that the economy displayed robustness during the financial crisis of 2008 due to resilience in core consumption.

    Read more here. 

  • January 28, 2021 / 06:00 PM IST

    Economic Survey Explained:  Growth, recovery, pain points, what to watch out for and other things you need to know

    On January 29, when finance minister Nirmala Sitharaman tables the annual Economic Survey in Parliament, policy wonks, researchers and those who track the Indian economy will be keenly watching out for one number: the growth projections for 2021-22.

    The survey, often described as the government’s official report card on the economy, will contain growth projections and much more. Here's More

  • January 28, 2021 / 05:55 PM IST

    Budget 2021 | Good economics is good politics, this Budget will be game changer: BJP 

    Ahead of presentation of the Union Budget in Parliament, the ruling BJP on Thursday said it will be a game changer and usher in a new era of economic growth in the country.

    Citing a recent International Monetary Fund (IMF) report which projected India to grow at 11.5 per cent in 2021, BJP spokesperson Gopal Krishan Agarwal said the country's economy has witnessed a 'V' shaped recovery after being hit by the pandemic.

    Adressing a press conference at the BJP headquarters here, Agarwal along with the party's another spokesperson Zafar Islam said the Index of Industrial Production (IIP) figures and labour force participation also point that the economy is witnessing a 'V' shaped recovery.

    "Good economics is good politics that has been the motto of the Narendra Modi government. Working with the same theme, the Union Budget 2021 will be a game changer," Agarwal said.

    Read More on Budget 2021 here. 

  • January 28, 2021 / 05:34 PM IST

    Budget 2021 Expectations | Time has come to give incentives for investment, without being prescriptive about identifying sectors: EY India National Leader Sudhir Kapadia

    EY India National Leader Sudhir Kapadia, while expressing his opinion on the Union Budget stated that time has come to give incentives for investment, without being prescriptive about identifying sectors.

    "Why should Investments be restricted to only a few sectors, or only manufacturing.. Every investment should be welcome, incentives should be sector agnostic." CNBC-TV18 quoted Kapadia raising his concern. 

  • January 28, 2021 / 05:29 PM IST

    Budget 2021 Expectations | Need to recognise corporate India has shown agility in raising capital: Everstone Group's VC Dhanpal Javeri

    Everstone Group's VC Dhanpal Javeri while expressing his opinion on the Union Budget, while speaking at CNBC-TV-18, stated there is a need to recognise that corporate India has shown agility in raising capital and the government needs to show the same pace.

    "We have innovative financial minds to help raise funds, it is only about putting thrust behind such a drive," he said. However, he was of of the opinion that lack of tax deductibility on interest paid for housing loans is a big issue. "Removing Capron interest rate subvention would give a big leap up to construction, banking sector," he said. 

  • ADVERTISEMENT
  • January 28, 2021 / 05:20 PM IST

    Budget 2021 Expectations | On taxation side collecting more revenue is going to be difficulty: EY India National Leader Sudhir Kapadia

    EY India National Leader Sudhir Kapadia while expressing his opinion on the Union Budget, while speaking at CNBC-TV18, stated that on taxation side collecting more revenue is going to be difficulty for the government. 

    He said, "For now tax mobilization measures government is looking at divestment, the issue is one of speed." He added that on the corproate tax side, various measures such as lowering of the corproate tax rate has already been done, no further leeway, hands tied.
    On personal tax, collections have been improving.

    Commenting on the personal tax, Kapadia collections have been improving, but added that on taxation side collecting more revenue is going to be difficulty. Apart from this, he said that levy of various cess is a limited option availible. He mentioned that huge opportunity in divestment, foreign money is available.

  • January 28, 2021 / 05:01 PM IST

    Budget 2021 Expectations | Budget should ensure growth momentum is both robust, sustainable: Religare Enterprises' chief Dr Rashmi Saluja


    Dr. Rashmi Saluja, Executive Chairperson, Religare Enterprises Ltd.: “The Indian economy is witnessing a rebound and we expect the forthcoming Union Budget to focus on further strengthening this economic recovery and ensure that the growth momentum is both robust and sustainable. The budget could be a continuation of the Rs 20 lakh crore Atmanirbhar Bharat package that the government announced in 2020, to combat COVID. Given that the budget will also need to make sizeable fund provision under various schemes to support growth, the government is likely to amend the FRBM Act to make room for higher fiscal deficit. At the same time, the budget should explore ways to monetize its non-core assets to shore its finances.

    Adequate flow of low cost credit is crucial at current juncture as businesses reinvigorate and get back on their feet. This is particularly needed for MSMEs and start-ups as they are among key growth drivers in the economy. The budget should look to significantly improve the enabling environment for businesses by ensuring easy availability of working capital, new incentives to boost revenues, hiring and digitization, quicker refund of GST and easier tax compliance. The Production Linked Incentive (PLI) scheme has received an encouraging response and it should be extended to more sectors. All these measures will not only provide fillip to local manufacturing but will also boost India’s Ease of Doing Business ranking."
     

Sections