Mr. Joshi said that the Budget focuses on stability over growth. Its three main thrusts are in the areas of fiscal prudence, rural focus and public investment. The success of the budget depends on the continuity of low crude oil prices and a good monsoon. And though Indian economy is in a good position Vis a Vis most other economies, a sharp turnaround in the economy looks unlikely. He also made an important observation that the importance of the Union Budget has declined with a greater devolution to the States as per the Finance Commission recommendation. What the States do is now more important for the Indian economy.
Elaborating further on the focus on stability versus growth, he said that given the global uncertainties, continuing on the path of fiscal prudence was a good choice. The fiscal math is credible and is likely to lead to a softening of interest rates and possibly spur consumption and private investment. Focus on Agriculture in the Budget was necessary as the rural economy contributes nearly 50% of GDP and has been suffering and been ignored for long. For example nearly 80% of the area is not irrigated and needs investments in irrigation. And in the absence of private investment, public investment especially in the area of infrastructure(roads, rails, ports etc.) is critical for triggering a growth momentum. He sounded a note of caution on the rising global uncertainties and their potential to derail the world economy including that of India.
Rtn. Shalin Divatia gave a comprehensive yet concise analysis of the numerous tax proposals in the Budget. Some of the changes effecting individuals are- Surcharge on income over Rs.1 crore increased to 15% from 12%, tax at 10% on dividend received above Rs. 10 lakhs per annum, TCS of 1% to be levied on purchase of motor vehicles of value more than Rs. 10 lakhs, sale of goods over Rs. 2 lakhs and provision of any service for cash above Rs. 2 lakhs. The growing digital economy is sought to be brought under the tax ambit through a 6% tax. An income declaration scheme has been offered in the Budget for undisclosed income up AY 2016-17. Other proposals include Direct Tax Dispute Resolution Scheme 2016, Presumptive Income, Rationalisation of Penalty Provisions, Incentives for employment generation, incentives for affordable housing and additional deduction on housing loan. Tax proposals for Recognised Provident Fund/ Pension Fund include a cap of Rs.1.5 lakhs on employer contribution. Tax exemption on withdrawal of EPF up to 40%- this is being hotly debated in the Parliament
Mr.Dharmakirti Joshi has impressive credentials. As Chief Economist at CRISIL Ltd, he is responsible for demand forecasting, assessing macroeconomic scenarios, and analysing and monitoring the impact of macroeconomic domestic and external shocks on the economy. He has extensive experience in macroeconomic analysis and medium-term assessments of the Indian economy.He was member of the Working Group of Savings for the 12th Five Year Plan. He is also a member of the industry monitoring group of Reserve Bank of India. He was the Chairman of Economic Affairs Committee of Bombay Chamber of Commerce and is currently member of Economic Policy Group of Confederation of Indian Industry and Indian Merchant Chamber. He regularly writes for leading newspapers and is called upon for his views on the economy in the electronic media.
Rtn. Shalin S Divatia is Partner of S R Divatia and Co, Chartered Accountants andDirector of Paradigm ESOP Consultants Pvt Ltd. Educational qualifications include a B.Com, LLB, FCA, and ACS. He has co-authored a book on Employee Stock Options (Esops), published by Bombay Chartered Accountants Society. He is a Director on Board of various companies and Associated with various Educational Institutions in an honorary capacity.He has been the Secretary of Rotary Service Public Charitable Trust and presently he is the Treasurer of Rotary club of Bombay West.
The evening was co-hosted by the Bombay Industries Association and the Christian Chamber of Commerce and Industry. The presentations generated a lot of interest and questions. The meeting ended with a vote of thanks by the President of the Bombay Industries Association.
---Rtn. Hemant Joshi