Corporate India does not seem to be too enthused with the latest budget. The Finance Minister chose not to play ball to India Inc's expectations of a blanket cut in corporate tax rate to 25 per cent. He rather selectively slashed the corporate tax rate for companies with a turnover of upto Rs 250 crore.
"While the budget is very high on rural and agricultural announcements, we were expecting something more for the SME sector which is the highest contributor to employment. And moreover, the budget does not talk about reviving private investment which has been an area of concern,” said Shreekant Somany, Chairman and Managing Director of Somany Ceramics.
“This budget is pretty regular with a mix bag of things, nothing path breaking or outstanding to boost the manufacturing sector. For agricultural and rural economy there is some really positive news, but not great hints for the consumer durable and mobile handset industry. The increase in customs duty from 15 per cent to 20 per cent will definitely hamper the cost to customer, especially when it comes to getting repairs for the high-end devices,” said Syed Tajuddin, CEO, Coolpad India.
The industry has however welcomed government's thrust on encouraging R&D pursuits in areas of artificial intelligence, machine learning, robotics and edge analytics. This move will further leapfrog the innovations in this space that is significantly driven by Indian companies and will place the country at the centre of global digital transformation focus,” said Keshab Panda, CEO and Managing Director of L&T Technology Services Ltd.
India Inc is also miffed by imposition of long term capital gains tax. Gains above Rs 100,000 made on the sale of mutual funds and listed stocks will be taxed at 10 per cent after one year. So far, there was no tax if stocks were sold after a year.
“As per expectations, the government didn't have enough room for giving much to corporates and can only hope that the issue of corporation tax would be taken up next year.” said FICCI President and, Chairman and Chief Executive Officer (CEO) of Edelweiss Group, Rashesh Shah.
Former HSBC country head, Naina Lal Kidwai said that the government has not clarified on the fair market valuation of companies in the venture capital space.
One of the ways the Budget 2018 might be positive for companies is the creation of rural demand, which could be good for companies in the consumer and auto sector. But apart, from that, the budget does not have many things to excite corporate India.
