BUDGET 2016-17 REACTION: TRAVEL SECTOR
Nikhil Ganju, Country Manager, TripAdvisor, India
The government’s focus on developing better infrastructure by investing in national highways and non-functional airports is definitely a step in the right direction for the travel industry – making India more accessible will no doubt help boost India’s appeal as an international destination and help Indians see more of the country domestically, although the implementation of ‘Krishi Kalyan cess’ may lead to Indians spending less on travel and dining out.
BUDGET REACTION 2016-17: TRAVEL SECTOR
Jaideep Ghosh, Partner and Head – Transport and Leisure, KPMG India
Union Budget 2016-17 is built on sharp forward-looking themes towards achieving economic growth, which are expected to have a positive impact. Significant funds allocated in Rail Budget and for expedite expanision of highways and rural roads will be one of the strongest boosts to our economy and thereby facilitate rapid growth of the tourism sector. Cruise tourism is also expected to be augmented, though at a slower pace, once Sagarmala is under implementation.
Development of under-served airports and airstrips will facilitate deeper connectivity has the potential to augment passengers traffic including tourists. Proposed simplification of customs procedure for international passengers’, in addition to already-existing e-visa for several countries, is expected to result in faster achievement of international travellers.
BUDGET REACTION 2016-17: AVIATION
Peeyush Naidu, Partner, Deloitte Touche Tohmatsu India
The growth of civil aviation in India over the last decade has been phenomena, and India is on course to become an even larger aviation market. The Ministry of Civil Aviation through its Draft National Civil Aviation Policy 2015 proposed an inclusive expansion plan for the aviation sector by promoting regional air connectivity. The Finance Minister in today’s Budget speech focused on development of 160 non-functional airports at a cost of INR 50-100 crore each, along with 10 of 25 defunct airstrips in partnership with state governments. This move will facilitate creation of necessary infrastructure for enhancing regional air connectivity and providing access by air to more parts of the country.
BUDGET REACTION 2016-17: AVIATION
Kabir Bogra, Associate Partner, Khaitan & Co
The FM in his Budget speech has mentioned that the government is looking to develop 160 non-functional airports, at a cost of INR 50 to 100 crore each and will also develop 10 defunct airstrips with state governments. If effectively managed these investments would provide a huge impetus to regional airlines and help in unlocking a significant potential in civil aviation in the India. This is likely to be undertaken under the PPP model.
The other significant announcement for the aviation industry comes in the form of incentivizing the MRO sector. This has been done in two steps. As a first step, the Customs exemption under notification number 12/2016 has been extended to a wider variety of equipment and tools required to be imported by a MRO service provider and secondly, Customs duty on aircraft imported for undertaking repairs has also been completely exempted.
In fact, the exemption has been completely streamlined with operational procedures followed by airlines and an international airline can fly into India with passengers, get the aircraft serviced and thereafter use it to fly passengers from India. This has been much delayed but yet a welcome move and may yet help in establishing India as a preferred MRO destination.”
BUDGET REACTION 2016-17: INDIAN ECONOMY, TAXATION
Gokul Chaudhri, Leader, Direct Tax, BMR & Associates LLP (Direct Tax perspective)
The Union Budget is pragmatic and sensible with well-defined objectives. For small tax payers, select measures have ensured lower tax burden. For new manufacturing enterprises an attractive rate of 25 percent corporate tax and for startups a tax holiday for 3 years as promised. The overall rate cut for corporate tax has eluded.
There were worries that capital gains and dividend taxation would be adversely impacted. The FM has wisely balanced the provisions by limiting the change only for dividends exceeding Rs 10 Lakh being taxable at a rate of 10 percent in hands of shareholders. In a way, well off shareholders will have dividends at an effective cost of 30 percent.
The macro-economic stability has been reassured with fiscal deficit sensibly in control and quality spending on roads, rail and public infrastructure. The PPP model is being revived with new legislative measures and the nation was assured that ease in business continues with the proposed changes in tax and corporate laws.
The ghost of retrospective taxation arising from indirect transfer provision may get buried finally with the framework of settlement that has been proposed along with a one time window for tax amnesty and tax litigation settlement being proposed for wider set of tax payers. The FM has sought to deliver on a rather wide and bold agenda within the limits of fiscal prudence.
BUDGET 2016-17 REACTION: PORTS
C. Sasidhar, Managing Director, Krishnapatnam Port Company Limited on Budget 2016-17.
The budget 2016 reflects for a very promising infrastructure and investment push with increased budgetary allocation for key infrastructure areas such as roads, railways and ports. The nine pillars laid down in the budget provide a holistic approach for bringing about a socio-economic transformation while reinvigorating the infrastructure sector through Public-Private Partnership (PPP).
Implementation of Indian Customs Single Window Project and initiatives to reduce the cargo release time and the transaction costs of EXIM trade will bring in the required boost in terms of ease of operations while also making the sector more attractive.
Also the SAGARMALA project which has already been rolled out was a very welcome move for the port sector and it is now all set to receive a fresh boost with the current budget now planning to develop new greenfield ports both on the eastern and western coasts of the country with a budget allocation of Rs. 800 crore.
BUDGET 2016-17 REACTION: INDIAN ECONOMY
Kaushal Sampat, President & MD, India, Dun & Bradstreet
“In the backdrop of the prevailing domestic and global economic scenario, the Government has delivered a well-balanced Budget that has adhered to the fiscal consolidation roadmap without compromising on the development agenda. This should provide comfort to investors from the macro-stability perspective.
Moreover, the Rs 2.18 trillion outlay on roads and railways, along with initiatives in the housing, construction and the electricity sector is a great positive for the infrastructure sector. There have been, however, areas which have caused certain disappointment such as the Rs 250bn towards recapitalisation of public sector banks – which seems a tad inadequate and the return of the dividend distribution tax.
That said, a number of systemic interventions is what sets this budget apart. Measures such as a one-time scheme for dispute resolution for pending retrospective tax amendment case, the bill to amend Companies Act, proposed introduction of the bankruptcy code, focus of digital economy are significant moves that could go a long way in improving the ease of doing business in India.
Overall, agriculture, infrastructure, social & rural sector and small Entrepreneurs are the largest beneficiaries of this Budget. The strong accent on rural sector is a significant move that is aimed at reviving rural consumer demand.
BUDGET 2016-17 REACTION: STARTUPS
Neeraj Mittal, JMD, Bonita, India
This Budget promises to address several issues faced by the roads, power , ports and airport sector. The proposed huge financial investment into NHAI and State Roads and a specific focus on development of select expressways in parallel to the development of industrial corridor will improve overall infrastructure, connectivity and lend efficiencies to supply chain
BUDGET 2016-17 REACTION: INDUSTRY ASSOCIATION
Chandrajit Banerjee, Director General, CII
The Finance Minister presented a well-rounded package of reforms and growth-oriented measures in the Union Budget 2016-17. The Budget proposals addressed issues in nine critical areas ranging from agriculture and the rural sector to financial sector and banking. Given the current global context of slowing growth and threat of financial turbulence, the Budget needs to be commended for giving a boost to growth and investment without disturbing the path for fiscal consolidation.
In line with recommendations made by CII, the Budget has announced critical interventions in areas such as agriculture, infrastructure, education and skills. Financial sector reforms have been taken forward including a plan for revitalising public sector banks. A lot of emphasis has been given to accelerated implementation of direct benefits transfer through the widespread use of JAM trinity, so that subsidies reach the intended beneficiaries. The well-thought out interventions presented in the Budget make it a growth and development oriented Budget.
Musafir Namah Bureau