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Monday, 07 Jul 2014
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Union Budget 2014-15: Industry Wishlist

 

Union Budget 2014-15 will be presented by the Union Finance Minister, Arun Jaitley, on 10 July 2014. The Indian public as well as the corporate sector is looking forward to the first Non-Congress budget after a decade, to provide the much needed fiscal and policy directions to put the Indian economy back on track.

UnionBudget2

As a pre-Budget surprise, the government has already extended the excise duty concessions for automobile and consumer durable sectors till December 2014. Hopes are now on long term initiatives like introducing a firm roadmap for speedy implementation of goods and service tax (GST). The sector-wise expectations from the Budget or focus areas are as follows:

 TELECOM

 
  • Time bound execution of national broadband highway
  • Rollout of 4G services
  • Promote domestic telecom equipment manufacturing
  • A balanced taxation policy for the industry
  • Tax holiday benefits under the Income Tax Act should be extended
  • Allow higher limit of funds through External Commercial Borrowings (ECBs)

 AUTOMOBILE

 
  • Continue with deregulation of diesel prices to help bring a balance in the sale of petrol and diesel cars
  • Duty on auto components to be reduced to 10 per cent to address inverted duty structure
  • Focused policy for promoting local automotive manufacturing and exports
  • Declare a realistic roadmap for future emission norms

 INFRASTRUCTURE

 
  • Road development projects undertaken by the NHAI should be totally exempt from customs duty
  • All Railway modernisation or renovation projects should get an effective thrust
  • Market-linked tariff rates and grant of infrastructure status to the port sector
  • Increase the tax exemption limit for retail customers investing in infrastructure bonds to as high as Rs one lakh
  • Make infrastructure debt funds far more attractive

 POWER

 
  • Extension of tax holiday for new power projects
  • Exemption in minimum alternate tax (MAT)
  • Increase in banks' sectoral limits from 15 per cent to 25 per cent
  • Incentivise PPP models for power distribution
  • Exemptions from customs duty for imported goods to protect domestic manufacturers
  • A long-term policy on fuels -- conventional and non-conventional
  • A clear policy with feed-in-tariff which will expedite the implementation of the solar projects across the country
  • Solar companies should be added in the list of priority lending for the banks so that the sector can get access to cheaper debt funds

 OIL & GAS

 
  • Incentivise exploration and production investments through clarity on taxes
  • Re-introduction of income tax holiday for exploration and production activities
  • Production sharing contract reforms
  • Introducing a shale gas policy
  • Change in upstream cess and royalty

 REAL ESTATE

 
  • Introduction of real estate investment trusts (REITs) to attract more global investment and bring transparency into the sector
  • Reduce FDI eligibility limit to 20,000 sq mtr and capitalization limit to USD one million Tax breaks for the affordable housing sector
  • Affordable housing to be treated as a priority sector in lending
  • Bring down interest rate at least for home buyers, below seven per cent
  • Approval processes for projects to be simplified
  • Reboot the regulatory framework for real estate

 HEALTHCARE

 
  • Additional clarification on the infrastructure status granted to healthcare
  • Explore the possibility of a healthcare fund and a medical innovation fund
  • Healthcare should be exempted from GST
  • Organisations setting up hospitals in adverse regions like hilly terrains or low population zone need to be incentivised
  • Upgrading the existing government healthcare facilities

Quote of the week:

Ajay-Shriram-President-CII  
"At a time when the Indian economy is struggling to regain its growth momentum and investment sentiment is weak, frequent and retrospective changes in tax laws, which are ambiguous and open to wide interpretation, should be avoided to restore investor confidence."

-Ajay Shriram, President, CII
 
 
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