Ankit Agarwal of Alankit said, “From relaxation in tax rates to focusing more on the infrastructure spending to recover the capex cycle, the expectation from this year’s budget are off the charts! The tax structure is majorly expected to undergo a change after the budget announcement, mainly in the direct tax structure including income tax.”
SMEStreet Pre-Budget Conversation with Mr. Ankit Agarwal, MD at Alankit
Budget 2018-19 will be the first budget post one of the most significant economic / taxation reform in India – the legendary GST. This year is definitely going to be crucial for sectors impacted by GST and we anticipate it being the most optimistic step taken by the government for all industries and overall economic development of India.
Ankit Agarwal said, “From relaxation in tax rates to focusing more on the infrastructure spending to recover the capex cycle, the expectation from this year’s budget are off the charts! The tax structure is majorly expected to undergo a change after the budget announcement, mainly in the direct tax structure including income tax because of the effort to make direct taxes contemporary so as to match with the current requirements. There is a possibility for the recapitalization of public sector banks; the government is expected to raise about 70,000 rupees within the first quarter of the year.”
With regards to the banks, one can definitely expect higher incentives and better budget allocation to enhance the credit flow to MSMEs. He also added, “There can also be incentives for financing of the long term projects in roads and railways. Most probably reduction in the rate of corporate income tax, down to 25% is expected and will be taken positively by technology companies, falling in the lower tax brackets. Looking at the SME sector, we believe certain proposals in the 2018 budget are likely to provide several financing incentives to the enterprises seeking to develop SMEs and other markets etc. All sectors’ functioning including the SMEs will also come under the GST framework.
Looking at a broader perspective, we expect:
- GST structure should undergo transformation post the budget 2018; the 4 rates should ideally be converted to only 2 rates in order to reduce the level of complexity prevailing in the market at present. A proper analysis is required to be done to sort out this complexity as often there is a clash between ascertaining the category for one single product.
- Employees should ideally be given an option to choose between health insurance cover and the mandatory ESI. This is primarily because the people, in general, are starting to value medical care way more than ever before and thus, ESI, despite of being better in terms of providing some extra benefits within the same cost, does turn out to be rather basic, not covering every treatment cost or additional expenses.
“Also, the EPF scheme should much rather be substituted by the NPS scheme once the new budget announcement is made, simply attributing to the convenience and the benefit of the employees. The NPS structure, administrative functionality and compliance in general is much more suited to the investor’s needs and allows for a far greater choice when it comes to allocation of savings.” concluded Mr. Agarwal.