By Mr. Soumitra Bhattacharya, Joint Managing Director, Bosch Limited
The Union government has been successful in bringing back investor confidence and projecting India as a business-friendly destination. The government has made a very good start last year in fiscal deficit, infrastructure project and more can be rolled out this year. We expect the new budget to further complement and drive these initiatives as well as bring in new policies to bolster India’s competitiveness in the manufacturing sector. Apart from this, as part of the auto component sector, we look forward to the government’s support to achieve USD 200 billion in turnover as outlined in the Automotive Mission Plan 2026, a collective vision of the Government of India and the Indian Automotive Industry.
We are optimistic the Union Budget 2016 will focus on:
Rollout of Goods and Service Tax (GST): There is an immediate need to bring GST to reality and roll it out as early as possible. This will help reduce the huge stress on businesses for compliance with multiple state tax legislations. An affirmation by the Government that GST on its early roll out, along with indicative transition steps, would help reinforces positive sentiments.
Infrastructure improvement: An effective and efficient infrastructure system is essential to the success of ‘Make in India’ campaign. We expect an announcement from the government to create more facilities to enable movement of raw material and transportation of finished products.
Labor reforms: Labor reforms are one of the key factors which will enable multinational companies to set up manufacturing activities in India on a large scale. We look forward to some practical reforms that will help in productivity improvement.
Reduction in corporate tax: A clear roadmap for reduction in corporate tax rate from 30 per cent to 25 per cent in the forthcoming Budget. This move will help in boosting business.
Make in India: Government should come out with concrete steps such as reduction of import duties on raw material and inputs to encourage manufacturing activity in the country. Bring structural reforms to reduce interface with Government to support ‘Make in India’ initiative.
Solar Projects: Government should encourage solar projects and announce various incentives like tax incentives, reduction in customs duty, financial support etc.
Fiscal deficit: Keeping Fiscal deficit low in view of the OROP and 7th pay commission recommendation.
There is further need to stem fiscal deficit, expedite more infrastructure projects, reduce subsidies and fiscal control on government expenditures. The government has made a very good start last year and we look forward to more being rolled out this year.