Budget 2015: India Inc eagerly awaits the Budget Day

The ‘new’ government in place is soon turning into old news. And, anticipation levels are touching the borders of impatience, almost. Because 10 months on, the government hasn’t created the pretty picture as promised, or so India Inc feels.

Last budget was a hurried one, which was presented by the government soon after it assumed power after a landslide victory. Truly, it was a moment to reckon and India Inc celebrated it with more pomp than any other community, including the BJP itself.

But 10 months on, the industry is running on short fuse. High on expectations and low on deliverables? Well, that will be examined after the Finance Minister presents his budget in a few days.

For starters, India Inc is hoping that government will find ways to mobilise the revenue by way of ramping up the working model. This needs to be done by undertaking divestment measures, selling stakes in public sectors and widening the tax base while having a long term roadmap for this. This will help bring down the cost capital and contain fiscal deficit, which is a plaguing problem in the given scenario.

Reality check
Few days ago, in what can be termed as the voice of India Inc, Deepak Parekh of HDFC had said impatience was creeping in among business sector as nothing had changed at the ground level despite the new government assuming power 9 months ago. He had even said Modi’s favourite ‘Make in India’ cannot succeed unless the businesses can be conducted in India without having to face problems on various fronts. Right now, there are way too many problems for businesses to flourish in India owing to high levels of corruption and mammoth red-tapism involved in securing permissions to set up and run businesses.

In the given scenario, the government is at a high level of advantage given the fact that global prices of commodities are at an all time low, and this would be termed the best environment to take some fast-track decisions favouring businesses environment.

Hopes spring
In a recent report put together by Goldman Sachs based on the research ahead of Union budget, the business expectations have been listed rather too well for the government to take a cue from.

According to the report, investors could be watching out for a credible fiscal consolidation path, a shift from subsidies to capital spending and specifics on government’s structural reform agenda.

Chinese economy has shown signs of getting sluggish and this could be the golden opportunity for India to seize. For that, some solid measures have to be put in place in terms of setting growth targets and aiming for GDP growth. There is no anticipation yet on GDP dragging owing to global commodity prices and this could in turn help fix the fiscal deficit at 3.6%, which could be in line with government’s medium-term fiscal consolidation path. The impact of higher capital spending will help compensate for the reduction in current spending growth.

Sectors
The GST or Goods Service Tax, which was recently hailed by the government, will have to have some long-term clear roadmap with incentives for manufacturing and infrastructure sectors with considerable improvement in tax administration.

Remember the ‘100 smart cities’ announcement? Now, this is another growth opportunity for real estate with small cities bringing in lots of chances to push up the progress indicators. The government needs to liberalise norms and allow FDI in construction and affordable housing projects, apart from re-introducing tax benefits.

India’s technology sector is one of the huge success stories. This needs to be provided with much-deserving impetus and create opportunities for futuristic growth in technology infrastructure. As for automobile sector, which is also looking at opportunities to have a steady growth, the good news would be to see excise duty being reduced.

This would help the automobile sector take the bull by its horns, helping boost growth opportunities and widen its potential. Government must probably also consider providing incentives for manufacturers of hybrid and electric vehicles, making them cheaper and more accessible to people.

Growth vs competition
esCommerce is another sector that packs in vibrant growth opportunities and has a long way to evolve into a brilliant business model. However, since this is hurting the retail sector more than what was imagined, there have been dissident voices as far as expectations from this sector are concerned. From the consumer point of view, while people would like government to go easy on eCommerce, retail sector wants VAT hiked on this segment to help contain the damage eCommerce is causing to other models of businesses, which have been conventional in their outlook.
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