Ease of Doing Business: Still a long way

Ease of Doing Business: Still a long way

With the second full-fledged Union Budget of the NDA government soon to be unveiled, the manufacturing industry continues to have sky high expectations.

Several measures have been introduced making India an attractive investment destination, and to ensure our economy is steered towards the double-digit growth trajectory.

The country has seen a lot of investment flowing in with positive sentiments built around the successful ‘MISIDICI’ (Make India, Skill India, Digital India, Clean India) campaign. This has positively favoured brand ‘India’. Whether the change is really felt at the ground level is a question which really needs to be answered.

‘Ease of Doing Business’ continues to remain the buzz word encompassing all business expectations. From tax reforms, regulatory clearances, labour laws, entry and exit procedures, effective and efficient logistics, quality infrastructure, consistent economy, strong banking and so on, ‘Ease of Doing Business’ covers it all.

Making GST possible is a big bang reform that everyone is expecting. It will not only change the way India does business, but also lead to simplification and unification of procedures across the country. Though the government is heavily promoting import substitution through its Make in India campaign, there remain certain products where the duty structure does not encourage domestic manufacturing and we still continue to import, since manufacturing becomes costly over imports.

Corporate tax

A step towards reduction of corporate tax rate from 30 per cent to 25 per cent, as announced in the last Budget is expected.

Besides, clarity on extending the tax sops to SEZs, and extending the sunset clause will not encourage investors who are looking at India as a manufacturing hub.

In the past 18 months, numerous projects have been launched to fillip logistics. However, time-bound execution of the various industrial and freight corridors as also the ambitious Sagar Mala project with appropriate budgetary allocations will impact the supply chain management as also will bring down the logistics cost.

Encouragement to use of renewable power generation of options of wind and solar energy by extending tax exemptions will attract investments and also help to provide continuous power to the industry by increased power generation.

In the backdrop of high industry expectations, hope this Budget continues to build the positive sentiment and ride the wave towards the exceptional growth targets of the Indian economy.

(The writer is a Partner, BDO India)

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