CHENNAI: Budget 2018-19 evoked mixed reaction from India Inc. While the measures to lift rural economy and those for the social sector were hailed, industrialists were not all happy about the reduction in corporate tax from 30 per cent to 25 per cent being limited to companies with a turnover of up to Rs 250 crore. Most were expecting such a relief, if announced, would be applicable to all companies including large firms.
Sharing views on the Budget, industry players pointed out that the rural-oriented Budget with a thrust on improving the rural economy will create jobs, encourage entrepreneurship and set the tone for future growth. Additionally, measures such as the Rs 5 lakh cover per family per year to 10 crore families for secondary and tertiary care hospitalization, would help the broader objective of universal healthcare.
India Inc is also miffed at the imposition of long-term capital gains tax. Gains above Rs 1 lakh 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 did not 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, chairman and CEO of Edelweiss Group, Rashesh Shah.
Reacting to the Budget, Syed Tajuddin, CEO of Coolpad India, said, “This budget is pretty regular with a mixed 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.”
According to Shobana Kamineni, president of CII, the budget provides impetus to agriculture and rural economy with many significant measures, which will add to overall consumption and demand and boost growth. “Support to the MSME sector through lowering of corporate tax rate to 25 per cent, increase in access to finance, and addressing non-performing assets would help alleviate the stress in the sector,” she noted.