Budget expectations 2021 has been saved
Budget expectations 2021
Budgetary expectations for the consumer sector
- Providing impetus to the manufacturing sector is critical to address the unprecedented slow growth period due to COVID-19 and restore normalcy. While the government’s recent schemes such as Production Linked Incentives (PLI) are optimistic, there is a need for parallel phased manufacturing programmes (similar to previously introduced Phased Manufacturing Programme (PMPs) for mobile phones, electronics) to progressively reduce import duties on components and raw material, consequently improving the domestic value addition.
- Majority of the R&D-linked tax benefits have been phased out in the last couple of years. New tax SOPS should be introduced to incentivise R&D in India, which is critical to promote India amongst foreign investors, as a hub for setting up their global manufacturing base.
- Online retail has immense potential and continues to be one of the fastest growing sectors. Multiplicity of tax compliances, such as equilisation levy, Tax collected at source (TCS) under both income tax and GST laws are creating complexities for the sector. While the digital economy needs to be fairly taxed, adequate clarity should be provided on the scope of these laws and further, compliances should be simplified.
- Growth of automobile sector is imperative given the huge capital base and employment involved. Tax linked benefits for new investments in this sector are urgently needed as the industry moves to the next age of Electric Vehicles (EVs). Phased manufacturing programme under customs for EVs should be reviewed and extended as the investments on a large scale are yet to happen.