Nagpur: The Union Budget presented by Finance Minister Arun Jaitley in Lok Sabha on Thursday evoked positive reactions from experts in the city.
Vidarbha Economic Development Council (VED) hailed the budget as a very balanced one that is designed to bring a smile to the urban as well as rural populace taking care of the major heads of the economy. Devendra Parekh, President, VE, appreciated the budget with confidence. He said, “Among the star points are minimum support price of 50% on the agricultural product. This is a long-awaited step expected to be introduced since a very long time and is highly appreciable. Rural India gets a good amount of benefit from this budget the steps announced being, among them a very important one of medical insurance of Rs. 5 lakh per head. In addition, the starting of 1200 adivasi schools, rural digital connectivity with 5 lakh wifi hotspots, Rs 1200 crore have been provided for the Bamboo Mission.”
1.5 Lakh health centres too will be set up and 24 medical colleges. In view of the unbalanced doctor- citizen ratio this is a commendable step as it will balance the ratio and hence the coming of 24 medical colleges in this direction would be a big desirable step towards better healthcare for citizens.
Urban India would benefit from Rs. 2.4 lakh crores for smart city projects and this step is also welcome.
Atul Pande, President – Vidarbha Industries Association, whole heartedly welcomed the reduction in the corporate tax rate from 30% to 25%. Farmers producing companies is also a welcome step.
CA Naresh Jakhotia, Jt Secretary – VIA, said the reduction in corporate tax rate to 25% is a welcome move. Increase in lock in period of 54EC bonds from 3 years to 5 years would be very discouraging. Introducing standard deduction back in the stature book would be beneficial for the salaries class of taxpayer.
B.C.Bhartia, National President, Confederation of All India Traders, New Delhi, termed the budget as balanced budget which will accelerate the speed of economic growth of country. He has touched practically all sections of society. Referring to issues of farmers, rural development marketing of farm produce to concept of cluster farming, Jaitley has ensured increase in income of farmers. Focus on health, education & skill development will create very good opportunity for youth in coming years.
Provision for broadband facility in rural areas will increase WiFi connectivity and help in doing online compliances. Provision for Rs 3 lakh crore under Mudra Yojana will benefit working capital funding for MSMEs.
The income tax concession to salaried class and pensioners will make more funds available for spending. Thereby increasing liquidity in retail market.
The trade was expecting some relief on charges made by banks in accepting payments through credit cards was not made. Traders feel that under composition schemes of GST they are required to pay only 1% tax but for accepting payment made through credit card they are required to pay 2% to banks. This is unjustified. Similarly in the name of MSMEs the corporate tax has been reduced to 25%. In actual practice MSMEs are mostly individual or partnership firms, it is demanded that concessional rate of income tax should be extended to individual or partnership firms also.
- Ashwini Agrawal, Past Chairman, Nagpur Branch of ICAI, said there is huge proposed outlays on Agriculture, health and education but the social schemes if implemented within four corners of Fiscal Deficit, that will certainly will be a great thing otherwise it will only give you very little from one hand but will burden you more from another. On capital market front, Investors are unhappy about re-introduction of long term capital gains on sales of equity and equity mutual fund units. Standard Deduction for salaried Class is too little as with additional 1 % cess and other changes in tax proposals, net benefits will be very meagre. SME’s have been left out of the benefit of tax rate cut as only corporate tax payers have been passed on the benefit of lower taxation on business profits. The FM has tried to keep his budget math balanced but meeting fiscal deficit target will be crucial point for this budget to be called a successful one.
CA Kirit N. Kalyani, Treasurer, Nagpur Branch of ICAI has dealt on plus and minus points.
Need of the Hour
- Giving due focus to agricultural industry by ensuring reasonable minimum support price for Kharif crops which is hiked by 1.5 times, is a welcome move.
- Rs 5 lakh/year per family for 10 crore families for health expenses, through ‘Ayushyaman Bharat’ shows the vision to give due relevance to the social security measures in India.
- Probably in view of the Direct Tax Code, no changes in personal income tax rates is done.
- Like seamless credit in GST regime, proposed spending on rural infra of Rs 14.34 lakh crore, is need of the hour to ensure all round growth of country.
Should have been
- Capital gains tax has been reintroduced, with certain conditions, at 10% on gains of over Rs 1 lakh on investments. This in turn may discourage long term investments, which were till now exempt.
- To encash the provision, tax cut should have been there for big corporate, which could have helped revive private investment as well as create more jobs. However, no such relief is there for corporate assesses.
- Fiscal deficit at 3.5 per cent of GDP for 2018-19, may adversely impact fdi favours for economy. This should have been more effectively addressed.
CA Umang Agrawal, Vice Chairman, Nagpur Branch of WIRC of ICAI, said the Union Budget 2018 presented by Finance Minister today has largely focussed on the rural India. The Budget gives hope to the distressed farmers and poor population of the country. The healthcare sector has much to cheer about from this budget. The budget can be definitely called as a socially inclusive one. The continuous focus on the agricultural economy is appreciable especially with regards to the increased purview of the Minimum Support Prices for the Kharif Crop. The farmers today can look forward for better price realisation of their produce.
He added the reiteration by the Minister with regards to doubling the Farmers income by 2022 is a good sign of a consistent economic and reform policy being adopted by the Government. The massive Healthcare policy announced by the Finance Minister has been the highlight of his budget speech. Perhaps the government is moving ahead from Ease of Doing Business to Ease of Living as a long term policy. The move of reduction of tax rate for majority of the companies from 30% to 25% is going to help the small and medium cap companies. However introduction of 10% Long term Capital Gain Tax without indexation will be taken in a negative manner by the investors largely.
The Budget 2018 does not concern individuals largely except the Salaried Class who now have got standard deduction of Rs. 40,000/- against Transport & Medical Allowances and the Senior Citizens who have granted increased exemptions against their income.
Commenting on Budget 2018, Arun Mn, Founder & MD of Casagrand Builder, said “The government’s focus is clearly towards affordable housing. While Budget 2017 proposed to assign infrastructure status to affordable housing projects, Budget 2018 is remarkable as it proposes to establish a dedicated Affordable Housing priority sector Fund under National Housing Bank. The proposal is in line with the Central government’s aim of ‘Housing for All’ by 2022. The Government’s focus on affordable housing will no doubt realize the home buying dreams of India’s huge middle class population.”
Jayprakash Parekh, said after going through the aspects of budget, it seems that BJP Government has failed to take advantage of positive market and public sympathy towards them. After Demonetisation and GST implementation, there is about 505 percent growth in Direct tax collection (In 2016-17 it was 12.6% and in 2017-18 it is 18.7%) and Increase in number of Tax Payers (In 2014-15 it was 6.47 crore and in 2016-17 it is 8.27% crores)
No changes in Income Tax slab is a pity towards Common India. Everyone is forecasting that inflation will rise around 12% in future because of crude price increase. At least FM should have given some concession to IT slab limit but he failed. 10% Social Welfare Surcharge on Imported goods is also enhance the prices as the reason given is valid to boost local market. But First Government have to made trade policy easy and loan disbursement within reach of common trader/Manufacturer.
“This Budget lacks specific directions on Women Security-Education & Entrepreneurship. Government missed opportunity to present more realistic budget.”
Syed K Sirajuddin, Chairman, Indian Muslims Chamber of Commerce, Nagpur, termed the budget as innovative widely covered budget. Rs 3794 crore allocation to MSME sector for credit support, capital and interest subsidy on innovation is one of the laudable bold step. Health cover to 50 crore for treatment at hospitals up to a maximum of Rs 5 lakh every year is a welcome step but its big challenge for government as well.
Clarifying on Bitcoin and other crypto currency, the FM has declared it as illegal and affirmed he is not going to recognize it, clears all the doubts. FM’s commitment to blockchain technology to omit the need of middlemen speaks his targets as RBI creating its own blockchain based crypto currency to implement digital transactions.
Giving impetus to Housing sector Jaitly announcement of dedicated affordable housing fund in the National Housing Bank is a welcome step.
It has to watch Aadhaar like unique identity for business benefits businesses or will create more trouble.But E-Assessment Feature for Income tax is a welcome step.
CA Julfesh Shah, PR and CSR Committee, ICAI, New Delhi, termed the budget as positive for micro small and medium scale enterprises (MSMEs). The Union Budget presented on Thursday reduced the income tax to 25% from 30 percent for small companies with annual turnover of up to Rs 250 crore. In the last year’s budget, the government provided tax sops to make MSMEs more viable, recognising their importance in economic activity and generating employment. It had reduced the income tax to 25% for small companies with annual turnover up to Rs 50 crore. This is estimated to have benefited more than 6.67 lakh companies, with 96% of all the companies filing tax returns.
As expected, the Long Term Capital Gains (LTCG) owned equity shares will draw 10 percent income tax. There will be small relief for salaried class due to Rs 40,000 standard deduction relief. For senior citizens the budget is a great relief as the Rs 10,000 deposit limit for has been increased to Rs 40,000.
Prakash Mehadia, ex-President, NVCC, has said that the budget is short of expectations but balanced one. The budget has provided much needed relief to farmers. The middle class has nothing to cheer about.
Kamal Agrawal, Director of Haldirams, says, “It seems to be a populist budget. There is something for everyone. Jaitly’s exact words were ” yeh election jeetne ka budget hai. Pitara khol diya hai. There is tax rebate for old people, scholarships for students, health benefits, sops for farmers… everything.” But regarding offering requisite MSP to farmers he quips ” that is a difficult exercise to either implement or scrutinize. Whether the benefits announced reach the actual farmer or not is always a difficult thing to assess.”
Nitin Khara, C&MD of Confidence Group (makers of Go gas), says “Over all it is 50:50, middle class Indians haven’t really got anything much. Of course as far as my business is concerned, it is very good for it. With 8 crore Gas / LPG connections being given to poor, rural women, the demand for my products will go up. We already have our order book full, this will further boost our sales. But I do feel that middle classes are going to be disappointed.”
Arun Lakhani, Chairman and Managing Director of Viswaraj Infrastructure Limited: “It is a very good and inclusive budget. It gives much needed impetus and support to vital sectors like Health, Agriculture and MSME. We could not have asked for anything more.” Lakhani is all praise for Jaitley’s budget.
Asked, if all the goals are reachable – like offering MSP to farmers which will be one and half times their input costs, he says that is the goal. It may take time to achieve, ” but it is really good to aim high… then if you achieve even a small percentage of it, a beginning has been made.”
Vishal Agrawal, Director, Plasto Tanks & Pipes: “There is no change as far as industries are concerned except some benefit to employees.” (Standard deduction has been increased to Rs. 40,000 for them.) But as far as we are concerned our surcharge has increased from 3% to 4%. Yes, some P.F. relief is there for start ups, but does not affect running industries.”
Ashish Kale, Director of Provincial Automobiles: “This budget is very good news for the Auto industry as there is strong focus on rural and infrastructure development which will give a boost to auto sales. New rural initiatives and higher budget allocations will help generate demand for tractors and small CVs. Auto industry was expecting benefits to be announced for Electric vehicle and hybrid category to boost this segment and incentive policy of scrapping more than 15 years old heavy commercial vehicles to reduce, this did not materialize though.”
J P Sharma, President of Vidrabha Taxpayers Association (VTA) said the budget is dedicated to farmers and villages. Finance Minister has allocated almost 75% (Rs. 14.50 Lakh Crore) of budget allocations on farmers and villages, which is a good step along with healthcare benefits to middle class; however no relief to taxpayers in direct taxes. Good relief to domestic companies having total turnover or gross receipts not exceeding Rs.250 Crore in the financial year 2016-17 shall be liable to pay tax at 25% as against present ceiling of Rs.50 Crore in financial year 2015-16. Increase proposed of 1.5 times in Minimum Support Price for Agricultural Crops will certainly benefit farmers to a large extend. Focusing on healthcare, proposal to setup Medical Colleges is a welcome step. I declare this as a Growth oriented budget as it aims in National Development with Agricultural Growth. Although Taxpayers didn’t received any major benefit in this budget, however we are glad that the revenue collected shall be utilized for the benefit our farmer brothers. Over all, this budget is in national interest.
Tejinder Singh Renu, Honorary Secretary, VTA says “Undoubtedly 75% of India’s population consists of rural population and even after 70 years of our independence, they lack much basic facilities including uncertain and unbalanced income, with major focus on Rural India, Finance Minister has done justice with them by allotting suitable allocation of funds. Middle Class also has something to cheer with reintroduction of standard deduction of Rs.40,000 against travel and medical expenses. With FM’s mission to keep fiscal deficit at 3.3% this year and maintaining growth in direct taxes @ 18.57% is good.
“Plan to develop 10 prominent tourists sites into Iconic Tourist Destination in order to boost tourism is a welcome step as we have several tourist destinations which needs to be exploited to its best possible potential. 24 new government medical colleges with at least one medical college for three parliamentary constituencies is a much required step. Likewise covering 10 Crore poor and vulnerable families under Nation Health Protection Scheme by providing up to Rs.5 Lakh per family per year in secondary and tertiary care institutions is a welcome step.
“Few provisions are added to enable filing of returns in time bound manner, else no deductions u/s 80 AC if return is not filed within due date; likewise penalty of Rs.500 per day u/s 285BA for non filing financial return. Hope this budget succeeds in delivering Ease of Business & Ease of Living in true sense.”
However, the Nag-Vidarbha Chamber of Commerce (NVCC) has called the Budget as disappointing for traders. It was expected that for employment opportunities, government will initiate more measures for industrial sector. But nothing of sort has happened. A comment by the Finance Minister on traders community regarding payment of taxes was not in good taste. His words that Mahatma Gandhi had said that most of tax collection comes from traders. The statement is totally wrong. One percent cess has been increased in the name of health and educational services. It will affect the bills being prepared for purchase of goods immediately. Agriculture companies have been made tax free. Will it really benefit farmers is to be seen. Railway Budget is also not inspiring.
Budget very much on expected lines : Dipen Agrawal
Finance Minister Arun Jaitley presented the current NDA government’s last and his toughest Budget yet it was also the first budget after roll out of major indirect tax reform GST & demonetisation in late 2016 because of which growth rate faced a set back. The Budget, in view of upcoming Assembly polls in eight states and general elections next year was expected to be populist striking a balance between growth , Agricultural distress , development, infrastructure spending , Industry, job creation & fiscal prudence.
Major spending announcements in the budget on agriculture, infrastructure such as road , railway , airports , rural infrastructure, health & social sectors is welcome .
From food processing to fiber optics, roads to shipping, youth to senior citizen, rural India to Ayushmaan Bharat, Digital India to Start Up India, this budget strengthens hopes and aspirations of crores of Indians . Farmers, Dalits, tribal communities will gain from this Budget. It is a something for all Budget .
The decision to raise the minimum support price (MSP) of all crops to at least 1.5 times the production cost would incentivise farming operations and improve the economic lot of the farmers.
The budget saw announcement of the largest healthcare programme in the world the medical insurance of Rs 5 lakh for 10 crore families is a huge initiative a flagship National Health Protection Scheme which shall benefit almost 50 crore people.
Finance Minister did not give any heed to industrialisation of backward region such as Vidarbha no special scheme or incentives announced to attract investment or industry to this region .
It can be safely concluded that the budget was very much on the expected lines & nothing unexpected announcement made today in the budget .
A welcome budget though on expected lines.
Advantage MSME but no major relief for other taxpayers: CA Julfesh Shah
The agriculture & infrastructure based focused Budget 2018 do not have many big ticket changes & no major tax relief is announced for income tax assessees.Except for a welcome move to enhance the limit of 50 crores turnover to 250 crores in FY 2016-17 for companies tax cut to 25 % from prevailing 30%.But this benefit of 5% tax cut can be availed by MSME sector only if its constitution is a company.Other MSME entities like LLPs,partnership firms will still have to shell out income tax @30% which may create disparity & uneven level playing field for them.
Also the introduction of LTCG on equities @10% above Rs 1 Lac ,will to some extent hamper the sentiments for long term investment s in equity market because now the difference between tax on long term capital gains (LTCG) & short term capital gains(STCG) will now be 5 % only.Rs 40000 as Standard Deduction for salaried assessees is really an eye wash as other existing deductions of Rs 34200 are discontinued.
To create discipline amongst the tax payers to file return on time especially corporates it has been made now compulsory to file return irrespective of income & if not filed they may be liable for prosecution & also penalty for non filing financial return as required u/s 285 BA is increased to Rs 500 per day which is burdensome.To promote digitalisation & prevent cash transactions now charitable trust’s expenditure in excess of 10000 will be disallowed & also TDS provisions will apply on them.
ICAI discusses fine print of budget instantly
Institute of Chartered Accountants of India Nagpur Branch has organized program “Immediate Reaction on Union Budget”, wherein expert Chartered Accountants from the city expressed their reactions and shared their reading between the lines on the said budget.
ON DIRECT TAXES PROPOSALS:-
While expressing his views on the direct taxes proposals, CA. Kapil Bahri said that in economical turbulent times the Hon’ble Finance Minister has done a commendable job by presenting a Budget away from populist announcements. He expressed that the Budget is a Feel Good one with several positive & bold steps taken by the Honble Finance Minister. He expressed his happiness that the minister has given due attention to the needs of Senior Citizens and Salaries class who form a major part of tax payer base. He also thanked the Minister for ensuring the no retrospective amendments have been done through the Budget. He also briefed the introduction of Long Term Capital Gain Tax on Equity & Mutual Fund and the intricacies involved therein. He further shared his thoughts on complexities involved in E-Assessment as being proposed by the Government.
ON INDIRECT TAXE PROPOSALS:-
CA. Anand Dhokha, expressing his views on Indirect Taxes said that since the roll out of GST no major changes were expected in Indirect Tax regime and the Honble Finance Minister has rightly not disturbed the same. He however was pleased to see a balanced and well thought of Budget.
CAPITAL MARKET:-
While expressing his view on Impact on Capital Market CA. Ranjit Dani, said that understanding capital market is difficult however with no major disruption is a good indication of a thoughtful formulation of the Budget. He however expressed his concern over the current market returns are far away from the reality and hence corrections in the Equity & Debt Market is expected in near future. He further praised the minister to ensure that the government does not out spend and has continued reforms which were initiated in earlier budget leading to overall increase in creditability of the Government in the eyes of common people.
TRADE & INDUSTRY:-
Talking on Trade & Industry perspective CA. Suresh Rathi, was happy to see that the Budget tries to lower the fiscal deficit to 3.3% to the GDP. However he wished that the GDP growth for a developing economy like India should be aimed at 8% thereby giving impetus to the Industries to venture in new areas with greater economic viability in long run. While congratulating the massive efforts put in to have a National Health Protection Policy by the government he was largely optimistic with the budget provisions and expected increased opportunity for all industries.
CA. Jaydeep Shah, Past President of ICAI, also expressed his thoughts on the Finance Bill 2018. He was happy to see that the Government has taken care of all sectors and has not given any populist schemes leading to additional burden on the Government.
Earlier Vice Chairman CA. Umang Agrawal, welcomed the participants. In his welcome address he opined that the budget proposals laid down by the Finance Minister are majorly aimed towards progressive developing economy with a major focus on Social Security for the New India. He also stated that considering the state of economy, it is pleasing to see a balanced and a non-populist budget that will definitely give impetus to the economy at all levels. He also appreciated the efforts of all the panelists for compiling and analyzing the various aspects of Budget Speech within a short span of time and ably putting forth before the audience.
CA. Samir Bakre & CA. Milind Patel, Past Chairmen Nagpur Branch efficiently co-ordinated the programme and added their valuable comments on the Union Budget and said that in overall perspective of the economy the finance minister has given what was expected from the budget. CA. Suren Duragkar, Secretary of Nagpur Branch presented formal vote of thanks.
Prominently present on the occasions were CA Swapnil Ghate, CA. Kirit Kalyani, CA. Sanjay M. Agrawal, CA. Jiten Saglani, CA. Saket Bagdia, CA Sanjay Agrawal, CA O S Bagdia, CA. Prem Ashutosh, CA Esha Umbharkar and over 180 Chartered Accountant members.
