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What are the 5 low hanging fruits that you think Finance Minister Arun Jaitley can deliver for your sector in this budget?
The Indian business community has a lot of expectations from Team Modi in instituting a growth-friendly Union Budget 2014-15. The focus this year should be on an all-inclusive development that will create a balance between the policies, tax and growth of the local ecosystem; restoring investor confidence; clearing the logjam in passing orders; and providing clarity on procedures, especially concerning tax matters. Faster clearances, simplification of procedures, streamlining incentives for investors, self-certifications, etc, are sorely needed to help rebuild business confidence and promote India as a preferred destination for business.
In addition, Arun Jaitley’s responsibility of both Finance and Corporate Affairs ministries will ensure better synergy between these two complimentary portfolios and should give a holistic view to budget implications on business.
From the semiconductor and electronics industry perspective, some of the policies and incentives that will spur the industry are:
- Commissioning the Electronics Development Fund to kickstart the local electronic system design and manufacturing (ESDM) ecosystem. This will greatly help in creating employment. On a related note, the government should also make it attractive for foreign VCs to invest in India and make India a preferred destination for startups.
- Eliminating retrospective taxes is another move that is expected in this budget. This will act as a game changer for the country and with PM Modi government’s focus on bettering the business environment, we are confident that this will be a major focus area.
- Urgent need for review and modification of some of the provisions relating to loans, related party transactions, etc, under the new Companies Act 2013, particularly with reference to its applicability to private limited companies.
- Need for non-adversarial approach by the tax authorities including on transfer pricing, and the need to align the transfer pricing regulations in India with the international transfer pricing norms.
- The Government needs to expedite the payment of income tax and service tax refunds and refrain from levying tax demands on trivial grounds.
2. What are the two long-term developments that you are looking for from this government in your sector?
We are looking forward to the implementation of a single-window clearance that will help simplification of the procedures to develop the ESDM ecosystem in India. This will also accelerate the growth of R&D and innovation.
Tax exemptions and grants need to be outlined in the upcoming budget to boost home-grown ESDM companies. Apart from this, we also expect the finance minister to lay down the roadmap for Goods and Services Tax (GST). This will have extensive impact on business across the board.
