Union Budget 2020: What Businesses Can Expect?
Union budget is right around the corner and is creating a wave of anticipation among Indians from different walks of life. In the verge of completing the chaotic financial year 2019-20, the entire nation is eagerly waiting to see what measures the government has in stores to address the country's deteriorating economic status and rising unemployment problem. Our Prime Minister Narendra Modi himself has directly indulged in the budget 2020 decision-making process, and this hints us to expect some ground-breaking actions to put an end to the economic slowdown that has been bothering the whole country.
Here are a few things that businesses could expect from the union budget 2020 to revive it as well as the country's worsening financial condition.
Since its advent, GST has been tagged non-friendly. For a long time now, people from various sectors have voiced out to bring in some positive business-friendly GST policies. Thus, it would be ideal, if the government considers revamping the present GST structure. Besides, now that the government is intending to empower businessmen, we could expect some positive changes in the existing GST policies with the forthcoming budget.
Aditya Agarwal, Co-Founder of Wealthy, says "All eyes are on the Union Budget 2020. Given the current status of the economy, reviving investments and consumer demand is a key to restore the confidence of both the common man and market entities. This would help investments to flow in and provide a much-needed boost to the economy.
It would be in the country’s best interest to focus on investment options for big budgets. We are hoping for the government to accord Cat 3 AIFs with a tax pass-through status and simplify NRI participation in our financial market via Equity Mutual Funds, Debentures and other market-linked instruments. The under penetration of the insurance industry is also an opportunity that can be leveraged. Creating a central repository of insurance policy data through PAN would be beneficial in taking insurance to the nooks and crannies of India where it is required the most. A reduction of GST on Health Insurance would also prove to be a positive enabler in this regard."
Corporate Rate Tax
Recently, it is been mandatory at the same time tough for the business to maintain the Lower Corporate Rate Tax to sustain in the business world. The businesses have managed to hold the Corporate Rate Tax at 22 percent. This action has favored quite a few organisations, and startups particularly, as lower Corporate Rate Tax saves some amount and enables the companies to re-invest. Thus, many are looking forward to witness a further reduction in the tax rates. Tax rate cut down would strengthen the financial state of the organisations and facilitate them to contribute to the country's economic growth.
Basavaraj Puttappa, Founder and CEO, Zeva Astras, states “In the wake of recent developments, it is apparent that the economy is showing signs of a slowdown. The government is on the ‘disaster management’ mode to get the economy back on track. Given the situation, the Budget is expected to focus on immediate measures to propel the economy towards growth. The government has already reduced corporate taxes and might also consider cutting down personal taxes. Such a move will increase consumption levels and stabilize the economic slowdown. However, this would increase the fiscal deficit and might put inflationary pressures on the economy. Thus, along with the tax relaxations, the government can push-up the tax exemption levels on long-term capital gains. Formulating such a strategy would increase investment and boost the capital market.”
In recent times women entrepreneurs are increasing exponentially; to encourage and support the budding as well as established women entrepreneurs the government could introduce more schemes and policies in favor of women as a measure to empower them.
We are aware of the fact that India is undergoing unemployment crises, which the country hasn't experienced in the past 42 years. To counter this problem, the government could facilitate MSMEs. It is evident that MSMEs play a vital role in creating job opportunities and improving the country's economy. Thus, the budget should facilitate MSMEs by relaxing the tax and loans constraints. MSMEs minister Nitin Gadkari has announced that he has demanded 12, 000 crore as budgetary allocation to improve small industries. This expectation is 71 percent higher than the previous year's budget allocation.
After undergoing a severe economic slowdown, every individual from common man to high profile businessmen are eagerly waiting for the Budget 2020 and the changes its would bring about. Two days to go, to know how this fiscal year 2020-21 would turn out for India and its businesses.