MUMBAI: If Suresh Prabhu’s Rail Budget spelt out a pro – poor stanza, then Arun Jaitley has recited a pro-poor poetry while presenting the Union Budget.
With burdens of expectations and aspirations, the Finance Minister started his presentation at 11 am on 28 February. As it is said ‘the morning shows the day,’ his initial sentences enlightened poor of the country. With pension and health insurance schemes, the government successfully managed to add smiles to the below middle class society. Jaitley’s pro-poor, pro-growth and pro-reform mantra followed throughout the budget. Sanitization, minority education, preservation of heritage sites, job creation and empowerment of youth were given supreme priority.
Viacom18 Media group CEO and CII National Committee on Media & Entertainment chairman Sudhanshu Vats said, “Two words sum up the essence of Budget 2015: balance and clarity. Finance Minister Arun Jaitley walked the tightrope by staying away from big bang announcements that might have strained the fiscal position, while taking substantial steps on matters of tax, social security and public investment (especially in Infrastructure). On the reduction in corporate tax rates to 25 per cent, the 4-year implementation roadmap is a welcome addition. This is the clarity that the corporate sector needs so far as tax policy is concerned. While personal income tax slabs remain unchanged, higher exemptions are targeted towards savings and would add to retirement income in taxpayers’ wallets. 'Wallets' too will don a different connotation given the FM's vision for a cashless society. The clarity on corporate tax road map is a welcome development for investments in the Indian M&E sector.”
He further added, “The reduction in withholding tax rates (to 10 per cent) on royalty and FTS payments to non-residents has finally been granted. The increase in service tax is probably to bring the rate closer to the rates expected under the GST regime. In that context, the step is the proverbial bitter pill for our industry. I must compliment the FM for his announcement of social security schemes for the vulnerable sections of society as a vital cornerstone towards inclusive growth and development. All in all, this is a 'Make in India' budget that will truly 'Make India'.”
ZEEL CEO and MD Punit Goenka congratulating Jaitley said, “Indeed a futuristic and growth oriented Super Budget presented by Arun Jaitley! The Budget has certainly addressed the overall tax concerns and has portrayed a positive picture for the investors! It is certainly a Budget to remember for the Common Man, since it has remarkably addressed all the key aspects like housing, jobs & education! Congratulations Arun Jaitley for wonderfully addressing the nation's concerns through the Budget 2015 & for setting some key goals for 2022!”
Reduction of corporate tax, increase in service tax and abolition of wealth tax with a surcharge of two per cent for income over Rs 1 crore was the eyebrow raiser for the corporate industry. But the line that will be music to many industrialists was, “abhi permission lene me hi saalo beet jaate hain, project shuru bhi nahi hota” (it takes years to get the necessary permissions and the projects don’t take off), which signifies minister’s inclination towards establishing a business friendly environment. He also spoke about forming a pre existing regulatory mechanism to ensure fast and transparent business market.
According to Reliance Broadcast Network CEO Tarun Katial, the budget is positive, realistic and progressive in nature. “The overall budget seems to be well thought of with a holistic approach and some key announcements for the service industry. The proposed reduction in corporate tax over the next four years is encouraging as it will result in higher investments, growth and more jobs creation. The move to increase the service tax however will put smaller advertisers under pressure and hamper advertising spends. The move on CSR is good and radio can be used effectively as a catalyst for social transformation in initiatives like Swachh Bharat, since radio can reach to the remotest of the corners where no other medium does because of literacy and cost issues, especially so with phase III and deeper reach. Overall a very good budget and I congratulate the Government for presenting us with a good futuristic budget.”
The level of expectations and aspirations were visible in share market too. Both Sensex and Nifty soared before Jaitley’s presentation. The market was waiting for some big announcements and reduction of corporate tax was one of them.
The major outlines of the budget include:
· Create a universal social security system for all Indians
· Commodities regulator to be marched with SEBI
· New bankruptcy code in 2015/16
· Promise to amend the RBI act this year and provide for a monetary policy committee
· To set up public debt management agency
· To raise visa-on-arrival facility to 150 countries from 43
· To implement goods and services tax by April 2016
· To increase service tax to 14 per cent
· Reduction in corporate tax to 25 per cent from 30 over next four years
· Wealth tax to be abolished, but a surcharge of two per cent for ‘Super Rich’ earning over Rs 1 crore
· Plans to introduce direct tax regime that is internationally competitive on rates without exemptions
· Fiscal deficit seen at 3.9 per cent of GDP in 2015/16
· Challenge of achieving fiscal target of 4.1 per cent of GDP
· Commitment to meet medium term fiscal deficit target of three per cent of GDP
· Current account deficit below 1.3 per cent of GDP
· Need to keep fiscal discipline in mind despite need for higher investment
· GDP growth seen at between 8 - 8.5 per cent
· Aiming double digit durable growth rate, achievable soon
· Consumer inflation to remain close to five per cent by March, opening room for more monetary policy easing
· Monetary policy framework agreement with the RBI clearly states objective of keeping inflation below sic per cent
· Propose to do away with different types of foreign investment and replace them with composite caps
· To allow foreign investment in alternative investment funds