As mentioned by the Finance Minister, about 96% of individuals have an income of less than Rs. 5 lakhs and they tend to gain on reduction in income tax rate for income upto Rs. 5 lakhs.
New Delhi: The Union Budget 2017-18 presented by Finance Minister, Arun Jaitley today cooked up mixed response from Retail and eRetail industries.
The tax reduction announcement from 30 per cent to 25 per cent for small companies with an annual turnover of Rs 50 crore along with tax reduction to 5% on income Rs 2.5L-5L is going to cheer up retail and consumption, feel the experts.
Its a pro-consumption budget: Kumar Rajagopalan, CEO, Retailers Association of India
The finance minister has kept something for everyone in the budget, with major emphasis on accountability and transparency. We have already witnessed a big tilt towards modern retail post demonetisation and the measures proposed in the Budget will further accelerate the pace. We await implementation of GST to further the cause of chain store and omni-channel retail in the country.
A game changer budget: Krish Iyer, President & CEO Walmart India
The Union Budget 2017 is a game changer and continues to rightly focus on rural, agriculture and infrastructure sector with an aim to give boost to formal economy. The planned investment in these sectors will not only create much needed jobs in the country but also spur consumer spending and boost economic growth. Fiscal deficit too has been contained very well.
The continued focus on ease of doing business with several measures such as abolishing FIPB, 'Model law on contract farming', Simplification of Labour laws under four areas – wages, industrial relation, social security and welfare and Safety - augurs very well for the economy. Major income tax relief in the lowest bracket is laudable as it will bring back consumer confidence and boost domestic consumption.
The measures announced to boost the manufacturing sector are commendable. Rewarding MSMEs by reducing rate of income tax will further boost `Make in India’; Proposal to set up dairy processing fund will boost food processing while increased allocation to schemes such as MSIPS will boost the electronics sector. Rural sector gets a boost with increased allocation to MNREGA.
Overall, this is a very good budget. Adherence to fiscal discipline, with emphasis on growth, development, increasing infrastructural & rural spending, and encouraging formal economy are key aspects of the budget.
Lack of more details on GST is a disappointment: Govind Shrikhande, Customer Care Associate & Managing Director, Shoppers Stop Ltd
The Union budget is set amidst a complex geopolitical atmosphere punctuated by the US Fed rate, global protectionism and oil prices & a muted domestic sentiment owing to Demonization. Against this challenging backdrop, the government’s efforts to maintain the fiscal deficit at 3.2%, CAD at .3%, forex reserves at $361 billion and increase FDI flow by 36% are indeed commendable.
The Union Budget is clearly strong on macro-economic intent, as is evident from the FM’s focus on agricultural growth, rural development, up-skilling of the youth, war on black money and pushing the digital economy, among others. Focused initiatives for rural growth through infrastructure investments, housing and financial assistance to farmers will boost agricultural growth and bolster the farm-to-market chain.
In line with the PM’s vision to dismantle bureaucracy, the FM’s announcement to abolish the FIPB and further liberalize the FDI policy deserves a round of cheer! The government’s continuous focus to bolster the digital economy is definitely applause-worthy.
On the flip side, lack of more details on GST is a disappointment.
Modification of the Income Tax in the sub 5 lacs slab to 5% could moderately boost consumption. Here again, consumers seem to have been left wanting for more. We were hoping for broader and more impactful changes to boost consumer demand.
Overall, the budget has focused on measures to sustain India’s poster-image of growth against the backdrop of an otherwise dull global economy. And while, the Finance Minister may have endeavored to ease the burden of the common man, he doesn’t seem to have met the mighty burden of expectations on this budget.
It’s a tax holiday for start-ups now for not just 3 years but 7 years
It’s a tax holiday for start-ups now for not just 3 years but 7 years: Falguni Nayar CEO and Founder Nykaa.com
Budget 2017 has been a balanced one with many revolutionary announcements. It is for sure a good day for Indian start up sector. The announcement of 5% tax exemption for companies having turnover below Rs. 50 crores will help around 96 percent of MSME’s and start ups of our country which is a big relief. This move will not just support the already running small businesses but will also boost entrepreneurship in our country. Also the announcement by Finance Minister on tax reduction for income holders below Rs 5 Lakhs and radical announcements on agriculture will facilitate in acceleration of GDP.
The restrictions for cash payments above 3 lacs will help us move from a cash driven to a digital economy which is good for ecommerce.
Above all it’s a tax holiday for start-ups now for not just 3 years but 7 years.
Demonetisation impact will not spill over to the next year is a welcome one: Arun Ganapathy, CFO Spykar Lifestyle Pvt Ltd
Budget announcement by Hon’ble Finance Minister for the financial year 2017-18 was on expected lines. As anticipated by us, the reduction of personal income tax would increase the disposable income in the hands of individuals. As mentioned by the Finance Minister, about 96% of individuals have an income of less than Rs. 5 lakhs and they tend to gain on reduction in income tax rate for income upto Rs. 5 lakhs. Also, there were no changes in the indirect taxes as expected by us, though there were some expectations in the market that there would be a change in service tax.
Demonetisation has impacted the retail industry per se. The statement of the Finance Minister that the impact on demonetisation will not spill over to the next year is a welcome one and would augur well for the industry. Though the reduction in corporate tax rates for SME corporate will help smaller retail entities, it is quite disappointing that the rate reduction was not extended to all corporates. Also, we expect a reduction of Merchant Discount Rate (MDR) charged by banks post waiver of duties for manufacture of POS machines and allied spare parts proposed in the Budget. We need to read the fine print as there were few proposals where the Finance Minister mentioned that though they are not included in his speech, they are a part of the annexure to his budget speech.
Overall, the budget was as anticipated by us.
The budget altogether is reform oriented, progressive budget: Vishwas Shringi, co-founder and CEO, Voylla Fashions Pvt Ltd
The budget is progressive and in favour of the multiple start-ups which the country supports. The 5% tax exemption to companies having turnover below Rs. 50 crores will help around 95 percent of MSME’s and start ups of our country which is a big relief. Due to this announcement, we can now allocate these funds which we would have paid in tax in adopting new technology, hiring skilled resources etc. We just hope that the same is implemented soon so that India progresses towards a nation which has more job opportunities. The budget altogether is reform oriented progressive budget with concessions to middle class & SMEs while maintaining taxes through compliance. Liberalisation in the FDI policy is a welcome move.
Budget announcements good for wholesalers: Arvind Mediratta, CEO & Managing Director- METRO Cash and Carry India
The Government has made record allocations to the infrastructure and agriculture sectors in the Union Budget, which will definitely have a hugely favorable impact on the country’s wholesale/retail industry. This increased focus on agriculture, roads and infrastructure, along with the proposed GST, will lead to far greater efficiency in the agricultural supply chain, and will ease backward and forward integration of products and services for wholesalers like METRO Cash & Carry. This will help us in procuring, storing, transporting and marketing fresh produce of better quality, at lower prices and across expanded markets.
There will be a less burden in terms of taxes: Pankaj Anand, co-founder, Sabhayta
As tax brackets have been amended the ultimate consumer would be benefited in terms of the tax saving hence increased purchasing capacity, this will provide a boost to business sector. Carry forward for MAT till 15 years is beneficial for start-ups in apparel and e-commerce retail sector. There will be a less burden in terms of taxes, which could enhance their growth in the market. In fact, reducing custom duty is a good sign as it shall ease out the taxes paid. As corporate tax has been reduced for firms with less than 50 crores turnover so it looks like a positive scenario for the trade industry.
Encouraging to consumer business players: Anil Talreja, Partner, Deloitte Haskins & Sells LLP
Budget 2017 proposals have been encouraging to players in consumer business players. There has been an increased focus on few sectors such as agricultural and farming, packaging, dairy processing, textile, footwear and leather by announcing several reforms. Additionally, there are few tax proposals which should have a positive impact on consumer business. A reduction in tax rate by 5% to the companies with turnover of up to 50 crores would benefit the players engaged in consumer business segment falling under this threshold with increase in profitability. Additionally, a reduction in tax rate of middle class individuals earning between 2.5 lakhs to 5 lakhs would increase their disposable income, which they may spend on consumer products resulting in increased revenue for consumer business players.
Continued focus on the agriculture sectors (target growth of 4.1% with steps to double the income of the farmers in the 5 year window) – a special focus on the ancillary sectors like logistics, diary, warehousing, irrigation and packaging – increase in disposable income in the hands of the consumers, providing agriculture credit to farmers of 10 lakh crore, 60 days interest waiver to farmers, increased allocation by 24% in expenditure planned for rural and agricultural sector to achieve the targeted growth.
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by Shruti Sharma (few months ago!)