New Delhi: Through a press release, the Indian Chamber of Commerce has hailed the Union Budget proposals presented in Parliament on Friday. The industry body welcomed the reduction in the corporate tax to 25% for firms with an annual turnover of up to Rs 400 crore. It said this would help to create a level playing field for most firms, as India’s corporate tax rate is still higher than the Asia average.
The body of Indian business persons believes the Budget helps in enhancing liquidity, as the public sector bank (PSB) recapitalisation with Rs 70,000 crore of public money for the purchase of high-rated pooled assets of financially sound NBFCs amounting to a total of Rs 1 lakh crore will improve the credit scenario in the country.
The industrial body cited from the speech of Finance Minister Nirmala Sitharaman to say that the government would provide a one-time six-month partial credit guarantee to PSBs for the first loss up to 10%.
The chamber of commerce appreciates the budgetary proposal of investment by FIIs and FDIs in debt securities in infrastructure debt funds.
The chamber has appreciated the fact that the minimum public shareholding in listed companies has been increased from 25% to 35%. This would, it said, address the liquidity crunch in the economy, foster SME growth and bring in greater foreign funds needed for infrastructure growth.
About the MSME sector, the press release hailed even the government act of pampering businessmen where the state would extend pension benefits to 3 crore retail traders and shopkeepers who have revenue of less than Rs 1.5 crore. The government, it said, would further create a payment platform for MSMEs to enable them to pay bills, and save time. The chamber welcomes this move and expects some more initiatives on market creation for the sector.
The chamber is upbeat also about labour laws getting streamlined into four basic labour codes. It says 10 million youth would take up industry-relevant skill training under the Kaushal Vikas Yojana to help increase employment and employability in the country.
In the real estate sector, tax relief up to Rs 3.5 lakh on interest paid on affordable housing including tax deduction of Rs 1.5 lakh is available also on interest paid on housing loans for self-occupied house owners. 1.95 crore houses are proposed to be provided under PMAY Grameen by 2021, the release noted. This will boost the real estate sector in the economy.
About start-ups, the chamber said those that file declarations would not be subjected to scrutiny in valuation. This, it hopes, will resolve the angel tax issue.
The chamber noted that the government had granted an extension of the exemption of capital gains arising from the sale of residential houses for investment in start-ups to 31 March 2021. The listing of social enterprises and voluntary organisations working for social welfare objectives in social stock exchanges has been welcomed, too. These measures, the chamber claims, would augment the ease of doing business and ease of financing for the start-up community.
The chamber appreciated also the fact that customs duty had been exempted on certain parts of electric vehicles. An additional income tax deduction of Rs 1.5 lakh is being awarded on the interest paid on loans for EVs, it noted. The chamber feels this will go a long way in promoting a zero carbon footprint economy for India.
The chamber welcomed also 100% FDI for insurance intermediaries, zero-budget farming, push for digital payments, restructuring of the national highway programme, greater investment for Railways’ infrastructure.
The “One Nation, One Grid” for power availability to States at affordable rates is a major reform for power distribution, the press release said.