Increase money in hands of consumer, MSME: Pepperfry CFO Neelesh Talathi

By Neelesh Talathi

"The upcoming Union Budget is likely to be one of the most awaited financial events in the recent history. Our economy has lost some of its sheen with GDP growth slowing down to 4.5%, stress in some key sectors like telecom, NBFC etc and overall slowing down of consumer demand. The budget provides an opportunity to this government to bring ‘Sabka Vikas’ at the core of its agenda. My expectations from the budget are:

Fuel Demand: This ought to be the foremost priority for the government. Gifted with young and aspiring population, this space is not about bold initiatives. What is required is the basics, getting more disposal income in the hands of the common people & restoring consumer confidence. At our stage of development our Tax-to-GDP ratio at around 17% is respectable providing enough leeway to rationalise personal tax and roll-out other measures like elimination of dividend distribution tax

Simplify: India has moved up 14 places to now be ranked at 63rd on the World Bank measurement of ease of doing business. Yet there is wide amount of complexity in our taxation, legal and regulatory environment. As an example, with the roll-out of GST we now file monthly returns by every state as against one central return which was required under erstwhile Service Tax. What this has done is multiplied our compliance cost by a factor of 3. There is a significant opportunity to leverage technology and data analytics to simplify compliance, eliminate all taxation returns, fast track dispute resolution thereby freeing up resources in the businesses to provide greater value to the customer

Scale up: MSME are the original start-ups and embody the spirit of entrepreneurship. Our furniture manufacturers are artisans providing design quality that have no parallel across the world. A study commissioned by IFC estimates credit gap to our MSMEs at INR 16.7 Lakh Crores with over 80% of them not having access to the formal credit system. This needs to be addressed soon. Some of the key measures would be addressing the stress in the NBFC sector, creating platform to facilitate bill discounting and unleashing the power of our Fintech sector etc."

Neelesh Talathi, CFO, Pepperfry