FMCG companies pin hopes on growth oriented Budget

Budget 2017 - After taking a demonetisation hit, FMCG companies are pinning hopes on a growth oriented Budget to see a revival in consumer confidence and create demand both in urban and rural markets.

"We are expecting a growth-oriented Budget with various stimuli to revive consumer confidence... Proactive reforms to stimulate demand by increasing the money in the hands of the emerging middle class and rural India, this will help bring FMCG growth back on track," Godrej Consumer Products Ltd Managing Director Vivek Gambhir told PTI.

Kolkata-based Emami too is expecting a growth oriented budget "to boost consumption, increase public investment, promote digitisation, broaden tax base and lead higher growth" and improvement of business sentiments.

"It (Budget) should aim at clarifying policies particularly with respect to GAAR, POEM, GST etc. As with every other Budget, restraining deficits and delivering higher growth is going to be a great challenge," said Emami CFO & CEO Finance Strategy & Business Development N. H Bhansali.

He further said: "While tax rates are expected to reduce with increased basic exemption limits, but taxpayers base is expected to broaden. Ease of doing business would be another focus area in currently subdued business environment. Agriculture, infrastructure and service sectors are also expected to get due attention and support."

Marico too is looking for a Budget in which the government would focus on boosting the rural sector and agricultural productivity besides providing benefits to the salaried taxpayers in order to increase disposable income in the urban markets, which would drive consumption.

"We are expecting an all-inclusive, progressive Budget to assist the sustainable economic growth of our country. In order to do so, it is essential for the government to focus on three crucial factors -- boosting the rural sector and agricultural productivity, providing benefits to the salaried taxpayers in order to increase disposable income in the urban markets," said Marico MD & CEO Saugata Gupta.(Read More)

Akhilesh writes to PM Modi, wants Budget presentation after polls

Union Budget 2017 - Uttar Pradesh Chief Minister Akhilesh Yadav has shot off a letter to Prime Minister Narendra Modi requesting him to defer presentation of the Union Budget till the completion of poll process in five states.

Uttar Pradesh Chief Minister Akhilesh Yadav. Photo: PTI Uttar Pradesh Chief Minister Akhilesh Yadav. Photo: PTI The letter sent to the Prime Minister earlier this week cited the Election Commission directive on January 23 asking the Central government not to announce any specific scheme for the five states going to polls in keeping with the model code of conduct.

The Chief Minister said that this may deprive Uttar Pradesh, having the maximum population in the country, of special schemes in the Union Budget which would have a direct impact on state's development and interest of 20 crore people.

Yadav recalled that in February-March 2012, the then government had taken a decision to defer the budget on its own till the completion of the poll process at that time.

state I request you think about deferring the Budget till after the elections so that the development of the state and schemes in the interests of the people could be announced," he added.

The Supreme Court had ruled recently that the government does not need to move the budget from February 1 to a date after elections are held in five states.

Assembly elections in Uttar Pradesh, Punjab, Uttarakhand, Goa and Manipur will be held between February 4 and March 8.(Read More)

Demonetisation, GST to fetch more revenues to govt: Arun Jaitley

GST - Finance Minister Arun Jaitley on Friday put up a spirited defence of demonetisation, saying the drive "shook" the financial system for a short while, but will integrate the shadow economy with the formal in the long run and ensure better tax compliance.

He said most contentious issues regarding the Goods and Services Tax (GST) have been sorted out between the Centre and states and the new indirect tax regime is at the final stages of implementation.

"This (demonetisation), coupled with GST, in the days to come will ensure much larger revenues as far as states and the central government are concerned and expand the size as far as the formal economy is concerned," Jaitley said at the CII Partnership Summit in Visakhapatnam.

Stating that India is largely a tax non-compliant society, he said states and the central government struggled with their revenues to run the system which created an unfair enrichment in favour of the evader.

"It also becomes very unfair on the normal taxpayer because what the evader manages to evade is what the compliant has to pay more," Jaitley said.

The government, therefore, decided to demonetise the high denomination currency, "which shook the system for some time".

Jaitley said demonetisation has gradually increased the process of integrating the shadow, parallel and informal economies in far greater number with the formal economy.(Read More)

Consumption, Employment, Growth: Three-point agenda for Budget 2017

Union Budget - The Budget 2017-2018 is not only being advanced by a month but also amalgamates the Railway budget with the Union Budget. Coming in the backdrop of impending election in the states of UP and Punjab and in the aftermath of demonetisation, we believe consumption, employment and growth could be key themes of the budget this year.

While demonetisation has made a bold start by channelizing the idle cash in the economy into the banking system, it needs to be followed through with measures to improve tax compliance and initiatives to boost the digital payment economy.

We believe it is an opportune time to boost consumption demand and business sentiment, which has shown some weakness following demonetisation. A hike in the personal tax limits can be a measure which helps towards this end. The government has rightly focused on boosting the low cost housing segment with interest subsidies and we believe that some tax exemptions on interest for home loans will provide greater thrust to this segment. This can also help in employment generation as the housing sector is one of the largest employment generators. 

In the past, the Government had spoken about its intention of bringing down corporate tax rates. This year, the corporate sector is expecting some relief from the budget on this front.

From the perspective of the Mutual Fund industry we believe demonetisation will accelerate the move from physical assets to financial assets. The mutual fund industry is ideally placed to channelize the savings of retail investors into the capital markets. Over the last few years there has been a welcome increase in the participation of investors into mutual funds, especially through SIPs.(Read More)

Budget 2017: IT, telecom players expect more for cyber security, broadband

Budget 2017 Date - With the government's push for digitisation across the board, the information & technology and telecom players are expecting a Union Budget that will try to strengthen cyber security and make broadband available to all that will in turn catalyse digital payments.

"As India digitalises rapidly, holistic approach to cyber security is a pre-requisite to foster and sustain trust of all the stakeholders -- consumers, businesses as well as government," said Sanjay Rohatgi, Senior Vice President, Asia Pacific and Japan, Symantec.

"The government should consider setting aside at least eight per cent of its overall IT budget specifically for cyber security starting with the upcoming budget," Rohatgi said.

After the demonetisation in November 2016, the Indian government is trying hard to change over the country's cash-based economy to a digital one.

To succeed in this mission, the country needs good broadband connectivity throughout the length and breadth of it.

"Given the government's focus on increasing broadband connectivity, especially in the rural pockets and push towards making India a less cash-dependent society, some measures should be announced to boost the broadband penetration in the rural parts of the country," the ICRA said.

"Infrastructure companies should be encouraged to install towers in rural areas and telecom operators should be incentivised to improve network connectivity in those areas.(Read More)