Indian Budget 2013
India's Budget and the Process Industry: What Top Honchos Expect for 2013
Mandar Phadke, CEO Abhisam Software
“Despite the pressure from various quarters, the FM should take a long term view and get the macro picture right. We do need some visionary long term thinking that should set the momentum not just for this year, but also for the entire decade and more.
Here are two suggestions:
- Simplification of tax laws, procedures and clearances that are needed for businesses - The intent should be to encourage new businesses to be set up as the birth of any new business inevitably helps create new products, markets and jobs. Hurdles should be removed. This will mean a simplification of the existing tax regimes, speeding up the move towards GST and unifying the country’s markets. These moves can remove the friction in doing business in India and also lead to increased revenue for the government by way of more entities, adding more value (and contributing more by way of total tax revenue).
- Use the demographic dividend to India’s advantage- Skill upgradation. In the next few years, India will have the largest working age (young) population in the whole world. This is a “heaven sent once in a lifetime” opportunity to rapidly move India into the group of developed countries. To do this however, the youth need to be imparted various skills via industrial training and e-learning programs. The Government should incentivize the skill development of all individuals by suitable tax breaks. Thus, individuals should get tax deductions every year for the technical training that they received that year (maybe with an upper limit). Also, companies that sponsor their employees for training, should get tax incentives to train their employees. Training should include traditional classroom as well as e-learning and m-learning. This single action will set in motion a huge skill upgradation program for the entire country. The positive effects though not visible in one or two years will certainly start showing results in the coming decade and more.”
Sajiv Nath Managing Director, Endress+Hauser (India)
“At present, India is witnessing a unique economic situation in the world - A slowing economy wherein GDP growth is reduced to 5 from 8-9 per cent level few years ago in spite of strong local demands in many promising sectors like power, energy, roads, water. Today, we are unable to fulfill consumer needs in the same sector.
Secondly, there is much higher consumer inflation level ~10 per cent p.a. in the last four years leading to high interest rates, depreciating currency (the current Indian inflation are way above the average world inflation of four per cent p.a.) Can a country with 1.2 billion people afford this imbalanced situation for long? The clear answer is NO as it would have serious impacts on the country’s ability to manage fiscal situation, thereby impacting its credit rating in the international market.
For corporates, high inflation, lower growth for a longer term only means reduced profitability and investments thereby deteriorating the country’s competitiveness as compared to other alternative investment destinations.