Union Budget Analysis Meeting at RCBW

Budget of Optimism : Achha Yug Aayega

Union Budget Analysis Meeting was organized by our Club on Wednesday, 17^th July, 2014 jointly with Bombay Industries Association, Christian Chamber of Commerce & Industry and Rotary Club of Bombay Airport. The Guest Speakers were Rtn.Shalin Divatia and Shri Ameet Patel, Practicing Chartered Accountants.  Also present were senior officials from Bombay Industries Association and Christian Chamber of Commerce.

Past President Rtn.Chandramohan Saigal introduced Rtn.Shalin Divatia and President Mohan Joshi introduced Shri Ameet Patel.  Rtn.Shalin Divatia (B.Com, LL.B, FCA & ACS), a member of our Club since 1996, is a partner at M/s.S.R.Divatia & Co., Chartered Accountants which focuses on taxation, appellate matters, corporate matters including mergers & acquisitions.  Rtn.Shalin has co-authored a book on Employee Stock Options (ESOPs) which is published by Bombay Chartered Accountant Society.  He has delivered speeches on varied topics at Indian Merchants Chambers, Indian Institute of Chartered Accountants of India and Management Institutes.  He regularly contributes Articles in leading publications including The Economic Times.  Shri Ameet Patel (son of Shri Navinbhai Patel associated with publication of our weekly bulletin Flying Carpet) is Past President of Bombay Chartered Accountants Society, Member of Taxation and Accountancy Committee of Bombay Chamber of Commerce & Industries and Member of Taxation and Finance Panel of Confederation of Indian Industries.  A regular speaker at various conferences and forums, Shri Patel has specialized in Disputes and Interpretation of Tax Laws.

Rtn.Shalin Divatia gave an overview of the Union Budget presented recently by the Hon’ble Finance Minister, Shri Arun Jaitley in the Parliament.  While controlling inflation is a major challenge facing the Government, the budget estimates a GDP growth of 5.4% during 2014-15 against actual GDP Growth of 4.70% during last fiscal.  The budget also estimates a lower fiscal deficit at 4.10% against 4.60% for the last year.  What is different about this year’s budget is that it estimates the growth to occur by controlling the fiscal deficit on the one hand while focusing on revenue growth on the other.  Another significant difference in the budget is phased reduction in subsidy bill and utilizing the welfare outlays for creation of capital assets instead of just doling out the subsidies.  The budget also aims at industrial recovery and better tax administration for growth of the economy.  Among the medium to long term measures indicated in the budget document are the creation of Smart Cities along with industrial corridors, boost to infrastructure financing, improving infrastructure for  tourism and encouraging defense and electronics manufacturing for employment generation, reducing import bill and achieving self-sufficiency.  According to Rtn.Shalin, with this budget, we can look forward to Stronger Economy – Sustainable Growth, Lower Subsidies, Lower Deficits & Lower Inflation and Manageable Current Account Deficits.

Shri Ameet Patel began his talk by listing out the expectations of the people from this budget which included simplification of law, steps for reducing inflation, introduction of GST, changes in subsidies doled out, spurring economic growth, removal of retrospective amendments of past and clear signal to foreign investors to come to India.  Against these high expectations, what the budget has delivered is not too many heavy duty policy decisions, no clear indication of what is being done about inflation, no roll back on retrospective amendments, a few changes aimed at reducing litigation, quite a few changes affecting stock markets, resolve to push GST forward and a committee to review expenditure of the Government.  He then explained in detail the changes in direct and indirect tax regulations notable amongst them being increase in threshold limit of taxation for senior citizens from Rs.2.50 lakhs to Rs.3.00 lakhs and for others from Rs.2.00 lakhs to Rs.2.50 lakhs, increase in deduction of interest on Self Occupied Property from Rs.1.50 lakhs to Rs.2.00 lakhs, increase in limit of Investment under section 80C from Rs.1.00 lakh to Rs.1.50 lakhs.  Simultaneously, the Government will soon take steps to increase the limit of investment in PPF A/c from the current limit of Rs.0.70 lakh to Rs.1.00 lakh.   He further explained the changes in provisions dealing with capital gains, dividend distribution tax and how these will impact the individuals and corporates.  The budget has removed certain ambiguities related with FII investments in India which will further attract investments into India.  However, similar clarity should be available for domestic investors too to have a level playing field. 

Both the speakers were unanimous on the positive impact of the budget and expressed their optimism when they opined that people of India can expect not just better days, but a better era if the vision portrayed in the budget document is translated into reality.

Rtn.Kevin Colaco, President, Rotary Club of Bombay Airport gave a hearty vote of thanks.