Perspective | Industry stalwarts have high expectations from Budget 2015-16
Every year the ‘aam aadmi’ awaits the Union Budget so that their tax liabilities are reduced. The industry also awaits the budget as it will bring in more clarity and direction in industry norms. With the new government we may expect changes this year and all of us have a lot of expectations from the Union Budget 2015-16.
The Budget which is just a few days away is expected to reduce a lot of burden across industries. Like the minister has already said he's “not in favour of taxing low income groups”.
With the Budget being announced on Feb 28, we got in touch with industry stalwarts to know what their expectations are from the budget this year. Here’s a look at what each one had to say.
Kamal Basu, Marketing & PR Head at Volkswagen said, “Definitely some positive changes in the auto industry as this industry has been suffering from quite some time now. Though it is difficult to pin point one aspect but definitely some relief in taxes and some concessions in the lending rights as in India the penetration of cars is very low and we want more people to have cars.”
Kamlesh Rao, CEO, Kotak Securities said, “We believe the government will work towards reducing the fiscal deficit, which is a key factor for any government. With the need to increase consumption demand, there will be a relook at the personal and corporate taxation rates. A focus on kicking the capex cycle which is the big stimulus required for sustained economic growth. Inverted tax laws will hopefully find correction to realize the ‘Make in India’ plan of the government.”
He added, “Land reforms is also one of the key factor on which the government is highly active to amend it to help major sectors like Defence, Industrial corridors, Rural Infrastructure development and Affordable housing.”
He also mentions that, “At 8900 – 9000 certainly one cannot act on short term view as the markets are going to remain volatile on the back of internal or external news flow but in the next 12 to 18 months of time we are expecting steady and positive indications. Down side is limited to 8000 as per Nifty and 27000 as per Sensex. On the higher side, we are expecting 25% to 30% returns in next 12 to 18 months of time.”
Ashish Bhasin, Chairman & CEO, South Asia, Dentsu Aegis Network said, “The advertising industry doesn’t really need a lot of simplification and clarity on taxes especially in the area of Service Tax, VAT, etc. It often is pretty confused or the process is so difficult and combustion and that becomes an issue. I’m hoping that there will be a simplification of that in line with what the government has been saying.”
“Specifically, I’m hoping that there will be some rationalization of Service Tax, because it is applicable at a very high rate and there is no clarity on where its applicable, on some places it clear while some places it’s not. By and large ours is a service industry but under the pretext of let’s say a hoarding; the vinyl should be taxed under VAT which is a sales tax kind of thing. So they keep trying to bring us in different taxes, so I hope that there will be rationalization of Service Tax and simplification of processes and clarity of which tax is applicable where,” he adds.
Speaking on a general note, he said, “If it’s a growth oriented budget then the industry does well and eventually advertising does well and I do hope for the same. The other thing is that if there is more money in the hands of the consumer then they spend more and therefore that rides business. Particularly this year, the rural consumer will be quite important because NREGA and other schemes which were there could be changed and other aspects could be bought into it and will bring in a very big difference.”
Bhasin adds, “For our industry, Ecommerce is becoming much more important now than what it was earlier. There is complete lack of clarity on the taxation process for ecommerce, so little bit of clarity on that. Even the authorities themselves don’t know what their thinking should be on that front. Given that it’s a new age economy they now need to figure out how to clarify all of that.”
“Last year was a feel good budget because the government hardly had time in saddle. It was like an interim budget, therefore expectations were lesser and it did turn around the mood a little bit, but now it has to deliver on actual,” he concludes.
Sanjeev Gupta, Managing Director, Global Advertisers said, “I expect the outdoor advertising business in India to grow by at least 20 per cent, and have set a revenue target at 30 per cent of our current revenues. I expect GDP to grow in excess of 8 per cent. How high that figure goes will depend on how much of the promised structural, legal and institutional changes are delivered by the current government and the consequent FDI flow. I am very optimistic.”
Speaking about how last year was he said, “I have been in the outdoor advertising business for nearly two decades now, and being headquartered in Mumbai, I think I have quite the ring side view of what goes on in the Indian economy.”
He adds, “I would say last year was very good. India voted decisively in favour of a stable government. Everyone remains optimistic about the economy and despite the slowdown in certain sectors for the last one year and half. We did good business. I think the key learning for us has been that innovation, specialization, customization and flexibility are the way forward in the days ahead.”
Online Start ups & Ecommerce wish list/ expectation from Budget 2015-16
The Digital India idea has a slew of start-up and established companies in the technology and e-commerce space excited. They all believe Budget 2015 will be the start of a new era of higher growth. We know that the government is focusing on promoting e-commerce, innovation and entrepreneurship. Finance Minister Arun Jaitley had invited CEOs of Indian software and hardware companies for a meeting along with various e-commerce companies and prominent start-ups for pre Budget consultations in January.
Online start-ups namely iTiffin.in, iSpyprice.com, Youshine.in etc have high hopes from the upcoming Budget.
Tapan Kumar Das, CEO and Co- Founder of iTiffin.in, (Intelligent Tiffin) an online and offline healthy meal providing company said, “I have huge expectations from the budget of 2015. According to me, ‘Nutrition services and Health food’, can be brought under the gamut of Health services, thus qualifying those services for Service Tax. The cost of healthcare in the country should be reduced in order to regulate the increasing number of lifestyle disorder cases in India. Also, I wish Food technology is made free of import duty. Income tax benefits should be allocated to the Nutrition and Health Food sector and in order to recruit people from the skill development academy while Nutrition and Diet Plan services should be brought under Mediclaim policy of General Insurance.”
Suresh Sharma, Founder & Director, iSpyPrice.com, a leading price comparison website said, “I have great expectations from the budget of 2015. According to me, if GST i.e. the Goods and Services Tax is implemented in the budget for this year; it will solve various taxation issues. Until then, the government should relax the tax Inspector Raj. Besides this, I feel that if the service tax on online advertisements is abolished, it will motivate internet-based publishing companies to create more valuable content and application for websites. The Government should give proper clarifications on service tax levied on advertising income that is earned by Indian publishers in foreign currency. Apart from this, MAT i.e. Minimum Alternate Tax should be abrogated from the e-commerce landscape.”
India is on route to becoming the world’s fastest growing e-commerce market, if current projections are anything to go by. Talking about E-commerce, online travel accounts for nearly 71% of e-commerce business in India. Online Travel platform namely. Via.com, MakeMyTrip, Yatra.com etc have high expectations from the Government.
Swaminathan Vedaranyam Chief Executive Officer, VIA.com says, “As far as the travel industry is concerned, I think there is an urgent need for well-defined policies and clear commitments to ensure that all cultural heritage points are given more attention with improved infrastructural facilities. There is a recent spurt in domestic travel as well as a higher influx of foreign tourists in India and with dedicated upkeep of the tourist hotspots; we can ensure higher growth for the travel industry. Additionally, I wish that there is an allocation towards revitalising all unused airports in tier II and III cities as these geographies hold immense potential today. There should also be a rationalisation of air travel taxes for competitive pricing to boost travel and tourism.” By Archit Ambekar | Twitter: @aambarchit