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AnalysisandInsights VishnuSultania VinitBagaria VijayJoshi UnionBudget2017 SpazeTowers RichardRekhy Mortice KPMG HemalMehta
GirishVanvari Deloitte
UnionBudget2017:Morecheersthan
disappointment
FMArunJaitleysbudgetpresentedonFebruary1,2017wascalledgrowthoriented,wellthoughtthroughanda
balancedbudget.HerearesomereactionsoftheCFOsandexpertview.
VartikaRawat | ETCFO | Updated:February02,2017,17:28IST
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UnionBudget2017garneredmixedsentimentsfromthefinanceworld.Some
financeleadersfindthisbudgettobegreatwhereasothersbelievethatthisbudget
missedthebiggerpictureforsmallergains.
Thoughfivepercentreductionincorporatetaxrateisagoodstepforcertain
corporate,butsuchcorporateratecutwasrequiredforallinordertoenablethemto
ploughbackfundsinthebusiness.Thiswouldhavecreatedmoreemploymentand
https://cfo.economictimes.indiatimes.com/news/unionbudget2017morecheersthandisappointment/56927161 1/10
5/28/2017 UnionBudget2017:Morecheersthandisappointment,CFONews,ETCFO
ButVishnuSultania,GroupCFO,Mortice
believesthattheeffectiverateforthe
smallercompanieswashigherthanthatof
thebigcorporateandsothismovewill
bringthemonthesamelevelmakingthe
SMEsorMSMEsmorecompetitive.(AlsowatchhisanalysisonBudget2o17:
UnionBudget2017:VishnuSultania,GroupCFO,Mortice) MostRead ThisWeek ThisMonth
Financedepartmentsuncertainaboutthe
SupportingthisviewexpertsthinkthatthiswillpushtheMSMEsectorand July1GSTdeadline
encourageinvestments.AccordingtoRichardRekhy,CEO,KPMGinIndia,inthe Lackofenoughtimeto
longrunataxcutfor96percentofMSMEswillincreasecomplianceandhelp testtheGSTNetwork
alleviatethedisruptioninfundflowinthelongrun. andtobringvendorsand
customersonboardgive
financeheadsconcern
Read:ArunJaitleyoffersnobigtaxsoptocorporates aheadoftheGST
OnenationwithonesetofGSTratesonJuly1?
Asthecorporatetaxloweringdidnotcomethroughthewayitwasexpected,India UnderGST,govttostopexemptionsgradually
Incisstillconfident.FinanceMinisterArunJaitleyreducedtheindividualincometax
Thisishowblackmoneyholdersareusingau
rateswhichwilleventuallyhelpboostconsumption.
Institutionalinvestorsattheheartofthegoodc
What'sinforTrade&Industry
InasurveybyETCFO.comtherespondents,financeprofessionalsacrossthe
countryseemtorecovertheirconfidenceintheeconomyafterdemonetization.
Almost65%CFOsfeelthatitwasabalancedbudgetandtheyarenotdisappointed
withit.
https://cfo.economictimes.indiatimes.com/news/unionbudget2017morecheersthandisappointment/56927161 2/10
5/28/2017 UnionBudget2017:Morecheersthandisappointment,CFONews,ETCFO
1:ThecarryforwardperiodofMinimumAlternativeTax(MAT)increasesfrom10
yearsto15years.Thoughtheindustrypushedforabolitionofthisact,the5year
extensionwasmuchappreciated.MurthyofNTTDataServicesays,Nosignificant
impactonITservicesexceptthecarryforwardofMAT
2:Legislativechangesandnewlawtoconfiscateassetsoffinancialoffendersor
defaulterswhofleethecountry.
3:Addressingtheissueofcompliancecostinsmallbusinesses,theBudgethas
increasedthethresholdlimitunderwhichdomestictransferpricingprovisionswillbe
triggered.Thethresholdlimitfordomestictransactionhasbeenuppedto20crore
from5crorenow.AsPareshGupta,CFOofaContractResearchOrganization
GVKBIOfeelspositiveaboutthismove,"removingdomestictransferpricingisa
steptowardsavoidinglitigationsandharassment."
Expertssay...
https://cfo.economictimes.indiatimes.com/news/unionbudget2017morecheersthandisappointment/56927161 3/10
5/28/2017 UnionBudget2017:Morecheersthandisappointment,CFONews,ETCFO
5:ThosewhoacquiredsharesinunlistedcompaniesafterOctober1,2004,willhave
topay10%longtermcapitalgainstaxiftheyhadn'tpaidsecuritiestransactiontax
(STT)atthetimeofpurchase.ExemptionprovidedunderSection10(38)isbeing
misusedbycertainpersonsfordeclaringtheirunaccountedincomeasexemptlong
termcapitalgainsbyenteringintoshamtransactions.Withaviewtopreventthis
abuse,itisproposedtoamendSection10(38).
6:TheGovernmentwilllaunchtwonewschemestopromotetheusageofBHIM
theseare,ReferralBonusSchemeforindividualsandaCashbackSchemefor
merchants.AadharPay,amerchantversionofAadharEnabledPaymentSystem,
willbelaunchedshortly
Financialsectorsreforms
ThoughJaitleysbudgetseemmoreinclinedtosocioeconomicsectorbuthe
consideredthefactthatIndiancompanieshadbeenstressedwithlowprofitability
andinvestmentandinlieuofthis,hemadethefollowingmajorannouncementinthis
budget:
AbolitionofForeignInvestmentPromotionBoard(FIPB)in201718.Thisisanother
positivesteptoliberalizeFDIpolicyframeworkandeaseregulatoryhurdlesin
https://cfo.economictimes.indiatimes.com/news/unionbudget2017morecheersthandisappointment/56927161 4/10
5/28/2017 UnionBudget2017:Morecheersthandisappointment,CFONews,ETCFO
attractingforeigninvestment
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ComputerEmergencyResponseTeamforFinancialSector(CERTFin)willbe
establishedtostrengthensecurityofthefinancialsectoramidincreasingincidentsof
cyberfrauds.In2016publicandprivatebankssawthebiggestcyberfraudwhen32
lakhdebitcardswerecompromised,Jaitleyinhisbudgetpointsoutthatthisteam
willworkinclosecoordinationwithallfinancialsectorregulatorsandother
stakeholders.
ListingofidentifiedCPSEsonstockexchanges.ThesharesofRailwayPSEslike
IRCTC,IRFCandIRCONwillbelistedinstockexchanges.Thiswillincreases
transparencyingovernmentcompaniesandunlockitswealth,saysGaneshMurthy
|SeniorVicePresident&CFO,NTTData.Thisisagreatsteptowardsbringing
efficiencyandaccountabilityandalsogeneratingadditionalresourcesforboth
governmentaswellasrailwayswhichiscurrentlystarvedoffundsneededfor
improvingitsinfrastructureandservices,feelsCFOofGVKBIO.
MEASURESFORSTIMULATINGGROWTH
Concessionalwithholdingrateof5%chargedoninterestearnedbyforeignentitiesin
externalcommercialborrowingsorinbondsandGovernmentsecuritiesisextendedto
30.6.2020.ThisbenefitisalsoextendedtoRupeeDenominated(Masala)Bonds
Forthepurposeofcarryforwardoflossesinrespectofstartups,theconditionof
continuousholdingof51%ofvotingrightshasbeenrelaxedsubjecttotheconditionthat
theholdingoftheoriginalpromoter/promoterscontinues.Alsotheprofit(linked
deduction)exemptionavailabletothestartupsfor3yearsoutof5yearsischangedto3
https://cfo.economictimes.indiatimes.com/news/unionbudget2017morecheersthandisappointment/56927161 5/10
5/28/2017 UnionBudget2017:Morecheersthandisappointment,CFONews,ETCFO
yearsoutof7years13
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BasiccustomsdutyonLNGreducedfrom5%to2.5%
Source:http://indiabudget.nic.in/
Infrastructure&RealEstate
Nodoubtthisbudgetisconsideredproagriculture,proruralsectorbutfocushas
beengiventoinfrastructureaswell.The79%increaseinallocationforinfrastructure
saysitallandthisisawelcomemovebythefinancecommunity.
Accordingtoexpertsitishearteningtoseeasignificantsafetyfundinrailwaysand
goodallocationofcapexforroads,railwaysandotherinfrastructure,including
irrigation(includingwaterefficientmicroirrigation).
Onemovethateveryonecheeredisthetaxincentivesgiventoaffordablehousing
andrationalizingcapitalgains.Nowdeveloperscanaccessforeignfundsata
cheapercostbywayofdebtandwillbeaprioritylendingforbanksaswell.
Affordablehousingisapriorityforthisgovernmentanditwasexpectedtogetan
Infrastatus.Thisshouldresultintoaprogressinthesaidsector,saysHemalMehta,
PartnerDeloitteHaskins&SellsLLP.
OntheotherhandVinitBagaria,CFOofamanufacturing,financeandtrading
companySpazeTowersshareshisexperience:thefactremainsthatindustrystatus
https://cfo.economictimes.indiatimes.com/news/unionbudget2017morecheersthandisappointment/56927161 6/10
5/28/2017 UnionBudget2017:Morecheersthandisappointment,CFONews,ETCFO
hasnotbeengrantedtotherealestateindustryatlarge.Duetothisnobankeris
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willingtolendmoneyforlandacquisitionwhichconstitutesmorethan3540%oftotal
Accounting Compliance Markets Technology Corporate Industry
costinurbanhousing.
Onsimilarlinesthelongtermcapitalgainstax(LTCG)onequityinvestmentdidnot
changebutinsteadtheholdingperiodforLTCGforimmovablepropertyhasbeen
reducedtotwoyears.
Read:LTCGtweakedforrealestate,remainssameforequity:Here'showitworks
TheTradeInfrastructureExportSchemewhichisallocatedRs3.96lakhcrore,will
helptheIndianexporterstobecomegloballycompetitive.Thisleadstohigh
borrowingsfromNBFCleavingonewithhighinterestandsoconcessionsshould
havebeengiventoboostrealestatesector,Bagariaadds.
WayForward
Budget2017aimstoenhancethetaxbaseandmovetowardsdigitization.Non
applicabilityofindirecttransferrulestoFPIsandAIFswillbeabigrelieftothe
investorsandcouldtriggeranimmediaterallyonthestockmarkets,saysGirish
Vanvari,HeadofTax,KPMGinIndia.Budget2017isstablefinebalancingact,with
fiscalprudence,directionalspendingandnosurprisesonthetaxationfrontwhich
shouldleadthecountrytoasustainablegrowthpath.Governmentsreformsinthe
recentmonthsbeitremonetisationorimplementationofGST,itwillhaveapositive
impactontheprivatesectorinvestment.
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https://cfo.economictimes.indiatimes.com/news/unionbudget2017morecheersthandisappointment/56927161 7/10
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1outof5globaltopexecutivesscared ThreeyearsofModisarkar:GSTwillcut
ofinvestinginindiaduetofraud downoninefficienciesinsupplychain
1comment4monthsago 1comment12daysago
BHARATKANANIThisisaresultof bikashkumarmallickWillitapplyto
negativemediacoveragesonfew alcoholicbeveragesaswell?Imean
incidents,Thereisaneedtohighlight alcoholicbeveragespricediffersby
SebiissuesnewnormsforlistingofNCRPSin
mergers
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Sebiissuedanewframeworkforlistingofnonconvertibledebenturesandnonconvertibleredeemablepreference
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shares.
Accounting Compliance Markets Technology Corporate Industry
PTI | May27,2017,10:40IST
ClickHeretoReadThisStory
GovernmenttoallayIndiaInc'sGSTfearsvia
interactivesessions
Thiscomesafterseveralcompaniescomplainedaboutanincreaseintaxationandaconsequentriseinpriceswhen
GSTisrolledoutasexpectedonJuly1.
DeepshikhaSikarwar | ETBureau | May27,2017,10:32IST
ClickHeretoReadThisStory
Infosys,HDFC,Big4inqueuewithstartupsfor
GSTSuvidhaProviderslicence
Flipkart,too,hasappliedtobeaGSPinwhatindustryexpertssaidcouldbeastrategicmovetogetmoresellerson
boardbyofferingtaxsolutions
ETBureau | May27,2017,10:29IST
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5/28/2017 UnionBudget2017:Morecheersthandisappointment,CFONews,ETCFO
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