What will the FM serve in this Budget?

The Finance Minister, P. Chidambaram will present the Union Budget for the next financial year 2013-14 tomorrow. Like every year expectations are running high amongst businessmen and the common man alike as to what will he place on the table? This being probably the last Budget before the 2014 General Elections, as usual some popular measure are expected, it could be an election budget. At the same time the FM could do well to address measures that contain the financial deficit and the government expenditure besides giving necessary sops to the common man in direct taxes and the industry in terms of further rationalization of duties.

Adgully spoke to a croos section of corporate head honchos to find out what they expect from the Budget. Present herewith are their views

Kamal Nandi, Exe. Vice President, Sales & Marketing, Godrej Appliances

The previous year has not been very fruitful for the consumer durables industry. The increased inflation and interest rates clubbed with multiple price increases due to increase in input costs have constrained the purchasing power of the middle class that ultimately has resulted in postponement of purchase. Since three years the consumer durables industry growth has been flat and it is time that it gets the boost from the government that it rightly deserves.

In the coming financial year we expect the Interest rates to go down, steps towards which we can already see from the recent cuts in the bank rate, repo rates, CRR. This is definitely a positive sign. Further to this, we are expecting the government to make certain important decisions keeping in mind the aspirations of the middle class which will benefit the customers and the industry as a whole.

Excise Duty Relaxation/Sales Tax reduction for energy efficient products. This would promote manufacturing of energy efficient appliances in India which in turn will help the power deficit scenario of our country. It will also increase the preference of such products amongst the consumers due to lower price.

Reverse in excise duty. Last year the excise duty was increased by 2 per cent which led to a price increase in white goods, resulting in drop in demand. We expect a roll back of the 2  per cent increase in excise duty that was implemented last year.

Kailash Katkar, MD and Chief Executive Officer, Quick Heal Technologies

The Union Budget for 2012-13 should incorporate policies and measures to develop the domestic software industry and also focus on encouraging software products segment in the country by protecting it from foreign competition in the domestic market. The Government should promote Indian software products to develop more Intellectual property for India. The current ecosystem is designed to take care only of service providers and we are losing out on benefits which can accrue from a vibrant product development industry in the software domain.  Right now the lack of a strong framework in protecting software intellectual property is damaging the overall reputation of the Indian IT industry across the globe. Currently, there is a lack of stringent policies and the government perhaps is overlooking the connection between software exports and Indian software products.  India is losing out on the competitive edge because of this situation. A lot can be done to develop an ecosystem in providing strong Indian software products and intellectual property protection. This will not only fortify the Indian software industry but will also create more patents, Trade Mark, Intellectual property and copyrights and increase tax revenues.

Dr. Sanjeev K Chaudhry, MD, SRL Diagnostics

India's twelfth five year plan seeks to increase the role of the state sector in the healthcare economy while recognizing the critical complementarity of the private sector in meeting the national health agenda. The Union Budget 2013-14 must reflect the importance of private diagnostics sector as a significant pillar of India's healthcare delivery. The Budget should recognize the costs incurred by the private sector in maintaining high quality of services and in seeking and maintaining both national and international accreditation. Tax exemptions and concessions for NABL accredited labs will motivate the vast majority of non-accredited labs to improve their quality standards and seek accreditation. The health check concessions announced in the last budget have not taken off and it would help if Finance Minister were to recognize the role of NABL and NABH accredited labs and hospitals in delivering these services. To enable private sector diagnostic companies to offer cheaper prices to patients, it is important to offer import duty rebate on reagents and consumables that are essential for providing quality services.

Kiran Murthi, CEO of www.getiitBazaar.com.

The Budget this year should bring in policies and taxation schemes which benefits the e-commerce sector and SMEs.

Online shopping is truly catching on in India. According to Assocham, estimated revenue from this sector is expected to be about $15 billion by 2015. There are over 100 million Internet users in India and this number is expected to cross 350 million by 2015, which will make India the second-largest Internet country in the world after China. Implementation of the comprehensive GST will indeed prove to be an important tax reform for us. After the implementation of GST, we will be able to pass on the benefits in terms of savings on products to customers and that will promote growth in this sector.

Logistics is an integral part of any business, and e-commerce is no exception. For a lack of efficient and cheap logistics, the government should invest in infrastructure and enable easy, efficient, reliable connectivity within India. Better logistics is required for e-commerce businesses/ SMEs to flourish in Indian rural heartlands. The growth for these two entities (e-commerce & logistics) must be simultaneous.

A boost to retail e-commerce will give a boost to the SMEs. The biggest problem for the SME to sell all India is the inter-state transaction documentation that restricts ecommerce transactions for SME. Also simplified tax structure will breathe a fresh lease of life into the small and medium-scale sector.

Last but not the least, one of the major drivers for this growth will also be the strengthening of the Indian economy, leading to a higher disposable income in the hands of people who will then be more open to shopping on the internet. The other important factor will be stricter regulations on online transactions by the government, reducing frauds and resulting in trust building for the medium.

Jaiprakash Desai, CEO, Metro Shoes

We hope the government is more forthcoming towards the footwear sector this year. As a representative of the footwear retail sector, we also do hope the financial year 2013-14, sees concessions in excise duty, at par with comparable industries. We expect an abatement at 70 per cent of MRP along with Optional CenVat at 4 per cent of ex-factory price without input CenVat credit. It would also be beneficial if there is clarity on rates and implementation roadmap for the GST.

Tarun Katial, CEO, Reliance Broadcast Network

For the broadcasting industries of radio and television we look forward to clarity, uniformity and relief from taxes. Advertisement in free to air mediums like radio should be treated differently and lower or nil service tax should apply for the same, aligning with the print and out of home industries. Also, FDI in non-news radio operations needs to be brought at par with television broadcasting. Customs duty on radio and television broadcast equipment should also be relaxed. The TV Broadcast and Distribution industry is already reaping benefits from the success of the digitization initiated by the Government. We look forward to necessary fiscal incentives in the form removal/ reduction of multiple taxes and levies and regulations which ensure transparency and power of choice to the end customer.”

Chandan Sharma, Founder, DholDhamaka dot com

Now that it’s clear that e-Commerce has also very huge potential to contribute to the economy of our country. Also, that it brings a lot or relief to society as well as to the government, in order to increase the involvement of more and more E-Commerce companies in this country government needs to take some encouraging steps at each stage. Though it can be understood as just another way of doing business but e-Commerce is lot more different than any other businesses. We entrepreneurs who wish to start our websites to sell products or services end up getting into the same loop or steps that are made for others. E-Commerce companies should be treated differently by government this budget. It would be great to know that Govt. understands each element involved in E-Commerce Company like marketing, logistics, inventory management etc. and relaxes the taxes and other charges. On one hand it’s important to understand that the country needs e-Commerce at this stage and on the other hand e-Commerce companies need support for government to help them build the businesses at least at the initial stages. Logistic is very important part of the e-Commerce but its eating most of the budget and time of us entrepreneurs in juggling our budgets. Tax rules should be eased for marketing and sales taxes if they are being operated from e-commerce companies to make more and more retailers switch to ecommerce business. The contribution of an ecommerce should not be treated as just another avenue to tax by the Govt. but as a helping hand that helps in the socio-economic contribution.

Mukesh Bansal, CEO & Co-Founder, Myntra

We expect the budget to introduce business friendly tax measures and implement GST which will provide strong opportunities for growth across sectors. We also expect the budget to be be more progressive, boost infrastructure, especially in Tier 2 & 3 cities and make India a more attractive destination for large foreign investment.

Abhijit Roy, MD & CEO, Berger Paints India

With inflation going up and with subsidies being withdrawn to some extent there is a squeeze on consumer demand. The budget needs to give a boost to consumer demand. It also needs to encourage savings through possible tax breaks for investment in housing or infrastructure projects. There should be a clear road map for introduction of GST in India with definite time line.

Anirudh Dhoot, President – CEAMA & Director, Videocon

To favorably consider reduction of duty for LCD & LED TV panels less than 19” & inclusion of plasma panel modifying the notification from “19 inches & above LCD/LED panels to “ LCD/LED & Plasma panels of all sizes”.

Next, digitalization of TV will create huge demand for Set Top Boxes in the country and is likely to touch 20 M units per annum. This current demand is met by import. Indian manufacturers face huge disability factor as future demands will favor imports unless the playing field is leveled. The disability factor is in 12.5% VAT applicable to Indian manufacturers as Cable & DTH operators do not provide them ‘C’ Form since they lease (and not sell) boxes. Further, importers do not pay any VAT.  The Inverted Duty on Set Top Boxes is an additional hindrance. We strongly recommend Customs Duty on Set Top Boxes be increased to 10% (currently 5%) for at least two years, to encourage local manufacturing

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