Key aspects to be focused on Union Budget’21

The theme of this year’s budget will largely circle around Covid-19, economic recovery and growth. As part of the central theme, the government is expected to focus on demand and job creation through targeted schemes and incentives.

Sensex has recently crossed 50,000 points for the first time due to the budget expectations even in the middle of pandemic. Everyone’s eyes are on the upcoming union budget 2021-22. Honorable FM said that hundred years of India wouldn’t have seen a budget been made post pandemic like this. While addressing the CII Partnership Summit 2020, Honorable FM, invited inputs and suggestions as she admitted that it is impossible for her to draft something which is going to be that budget like never before without suggestions from Stakeholders. Mrs. Sitharaman also said that the need of the hour is more investments towards research and development in medical, biotechnology and pharma. India has to look at both public and private partnership and also investment in areas of research for Medicine. In this budget, the Government must work on the reforms which will result in the creation of demand and will boost the growth of economy.

To stand true to her words, Sitharaman will need to address key challenges confronting the Indian economy today. Most of them predate the covid-19 pandemic but have gained urgency after the economic devastation wreaked by the pandemic-induced lockdown.

Corona pandemic played havoc with businesses. A one-time relief scheme in tax compliances specially in GST Compliance’s basically in form of late fee waiver will help business houses to come on track without any more hassles.

Relief packages to distress sectors like tourism, hospitality, airlines in form tax exemptions, cash incentive on basis of past sales will help them to survive in this bad time. To make India superpower – these three needs to be strengthen – Technology, Infrastructure and Education. Government must open its hands more generously for lifeline of country i.e., infrastructure. Instead of focusing on BOT model – we expect that taxpayer money used in creating its own assets.

Digital India is New India. And this new India is far ahead of others and hoisting the flag high in the world. We expect that budget allocation for Information Technology infrastructure at all-time high. A shifting is requirement from academic education to practical education. Focus shifting is to be done from degrees to skills. Introduction of young entrepreneurs’ scheme for school children – by launching entrepreneurs skill development programme at school level. An entrepreneur launch pad scheme is need of the second which aims to show the right direction to the school children so that he knows it’s skills and area of interest from very beginning of its career.

Instead of tightening measures for Tax Evaders – requirement is to weed out the evils from roots. And that can be happened only if the laws are simple and compliances are less. Major root cause of tax evasion is higher tax rates – instead of higher tax rates requirement is to cut down the expenditure. Must focus on ease of compliance’s along with ease of doing business. Multiple compliance’s hurting business in terms of productivity and cost.

Strengthening the autonomous education bodies by give them a strong hand holding and backing. It is high time to merge the three commerce professional bodies ICAI, ICSI and ICMAI into a single professional body for a wonderful India. Its high time to focus on budget utilisation than budget allocations. Propriety aspects need to be strengthened and relook. CAG must give more powers – it should be given powers for issuing Show-Cause notices to defaulters and adjudicate the matter as well. It is high time where the watchdog also be given judicial powers as well.

Government must come out with clarity on debatable issues in tax laws which creates unusual litigation and sort-out all these issues in one-go. Some of the issues in GST which needs to be looked upon is like tussle on taxing incentive, notice pay recovery, procedural lapses etc. Government must come out with plans to onboard the MSMEs into the Large Companies. Time has come when MSMEs have to uplift to a new level i.e. Large Company.Incentivised the MSME on basis of following parameters – employment generation, forex earned, adding the new-line of business and area where it is worked.