Cut taxes, boost infra spending

Vijay C Roy

Tribune News Service

Chandigarh, June 26

Having contributed significantly to exports and provided large-scale employment, the services sector, the key driver of the country's economic growth, is expecting measures which can propel demand conditions. The sector covers activities such as IT/ITes, banking, insurance, real estate, retail, health, business services and social and personal services. The Tribune spoke to those involved in the sector to gauge their Budget expectations. 

Real estate 

The realty sector is the most highly taxed segment with the combination of high direct and indirect taxes, stamp duties and levies for development approvals. The high taxes coupled with high interest rates have been crippling its growth. "To overcome the doomsday scenario, project developers expect the government to impart an industry status to the sector which would enable them to cut capital costs and pass on the benefits to consumers," said Surendra Hiranandani, Founder & Director, House of Hiranandani. The government should also speed up infrastructure development which will ensure cheaper land for housing and push affordability.

Logistics 

The Budget should include regulations that will drive organisations to digitalise key logistics and supply chain processes. “By mandating digitalisation of services such as accounting, billing, and logistics processes, the government can ensure greater levels of compliance and tackle corruption better,” said Kushal Nahata, CEO & Co-founder of FarEye, a logistics-tech startup. He is also expecting announcements with regards to building integrated transportation hubs or Multi-Modal Logistics Parks.

Health

According to Dr Sujit Paul, MD, Stayhappi Pharmacy, there is a huge need to set up medical colleges and tertiary hospitals to ensure quality healthcare. He opines that the government should 'truly' start working on setting up health centres (even for animals) with an aim that 'no life stays untreated'.

Retail

“Bringing down the electronic products from the higher GST slabs will help increase sales, thus aiding the GDP. These dots are easy to connect and we hope that the Finance Ministry will pay some heed to it this time around," Gaurav Dabas, Director, WK Life. 

IT industry

The IT/ITes industry has urged the government to continue tax incentives to units in special economic zones (SEZs) beyond March 2020, saying that such a move will provide the industry with certainty and enable them to invest in long-term strategy. IT body Nasscom has suggested that the new tax-friendly SEZ policy should retain existing tax benefits and provide a concessional rate of 9 per cent Minimum Alternative Tax.

Insurance 

In the absence of social security, life insurance plays an important role in a growing economy like ours. “To encourage penetration in the sector, we believe that tax burden on life insurance services can be rationalised and be taxed at a lower rate across all products,” said Tarun Chugh, MD & CEO, Bajaj Allianz Life Insurance.