Mercedes Benz – Martin Schwenk, MD & CEO – Mercedes-Benz India.
“Given the favourable outcome of GST in terms of rising revenue, we wish the Government would reconsider the rationalization of GST rates for cars which currently attracts 28% GST and 17-22% Compensation Cess. We recommend a downward revision of GST rate on all cars from to 18% from 28% and a proportionate reduction of CESS to around 15% for all cars above 4 meters. This will act as a much needed catalyst for growth of the industry, especially when it is facing subdued customer interest due to multiple factors like rise in insurance costs, inflationary hikes, liquidity crunch and forthcoming price increase due to BSVI implementation. To revive the slowing down auto sector, we also recommend to consider offering ‘depreciation’ benefit on vehicles to individuals.”
CBRE – Mr. Anshuman Magazine, Chairman & CEO – India, South East Asia, Middle East & Africa, CBRE
The Indian realty sector expects some more favourable SOPs and policies to be introduced by the newly re-elected government in this Union Budget 2019-20. Riding on strong regulatory mechanisms introduced in the previous term such as RERA (Real Estate Regulatory Authority Act), GST (Good and Service Tax) and Insolvency and Bankruptcy Code (IBC) and numerous initiatives for the affordable housing sector, the realty sector has made great strides and has witnessed an improvement in overall industry performance.
While the Modi-led government in its last term had introduced several reformative measures with the overarching aim to revive the sector, some measures are still awaited with respect to mitigating impending challenges related to fund raising, capital and liquidity. In addition to the grant of an industry status, the sector is also expecting the government to further ease ECB (External Commercial Borrowings) norms, so as to ensure steady in-flow of capital from foreign investors. Similarly, introduction of housing bonds, granting special status to HFCs at par with the banking sector, will further help in providing the much-needed fillip to the housing segment across all markets and geographies. For ambitious government welfare schemes such as the much talked about `Housing for All Initiative’ to be a reality, many of such reforms are pre-requisites.
Recommendations have also been made in terms of reducing corporate tax and an extension in the SEZ sunset. The sunset clause definitely needs an extension, especially in the midst of the anticipated impact of automation and technology on the IT sector. Withdrawal of any tax incentives from SEZs might hit exports and job creation. The government should also roll-out policies targeted at the developer community, while making adequate headroom for positive investor sentiments. In view of the recent NBFC liquidity crunch, there is an ardent need to increase bank funding to developers.
From a consumer perspective, buyers should be allowed cross purchasing. For instance, investors should be allowed to invest in residential properties from the sale proceeds of commercial properties and vice-versa. Also, the government should look at allowing investment in any number of properties from the proceeds of a single property, so as to further uplift the residential real estate market. Also, in view of high capital values, rental housing needs a push. Currently, there is a standard deduction from rental income under Section 24 (a) which is 30% of the Net Annual Value of the property. In order to incentivise rental housing, this deduction can be increased to 50% of the NAV.
Over and above these policy reforms, the Union budget should also expand its focus area on a holistic plan for infrastructure and housing development in peripheral locations and Tier II/Tier-III cities. For the creation of large-scale housing developments, tax benefits under Section 80-IA and Section 35AD (deductions to encourage private sector participation within the infrastructure sector) should be extended to integrated township projects by including the same within the definition of infrastructure facility. This would not only bring in the much-needed housing and infrastructural progression in these areas but will also help to generate employment. As one of the fastest growing sectors and the second largest employer in the India economy, these suggested reforms and new policies could further catapult the growth of the realty sector, along with the economy, through a more cohesive partnership between the Govt. and the real estate sector.
KALYAN JEWELLERS – Mr. T S Kalyanaraman, Chairman & Managing Director, Kalyan Jewellers.
“We are hoping for a reduction in the import duty on gold from 10% to 4-5%. This would help buoy up positive business sentiments, and a cut in the duty structure will ultimately benefit the consumer. A step in this direction will also promote import of gold through legalized channels resulting in increased revenue for the government.
We look forward to organized jewellery retail chains playing a more pro-active role in the Gold Monetization Scheme which would help the government in reaching its targets of mobilizing gold from consumers across the country.
Jewellery purchase through EMIs is another option that we would like the government to look into.”
Business Head & Executive Vice President – Godrej Appliances and President – CEAMA
“The consumer electronics and appliance industry has witnessed low to no growth in the last three years. The penetration level for durables has traditionally been low in India and despite more than 5 decades, it stands at as low as ~30% for refrigerators (92% in China), ~13% for washing machines (88% in China) and 60% for televisions (95% in China). Revival of growth, therefore, is the biggest ask that industry has from the government.
As an industry, we expect the government to reduce the customs duty on open cells from 5% to 0%, as presently there is no ecosystem for local manufacturing of Open Cell in the country. In fact CEAMA has submitted a plan for phased manufacturing of TVs and its subparts to the government in 2018 to encourage local and end to end manufacturing of Televisions in the country. Expedition in implementation of the PMP is the need of the hour. We, also recommend implementing a phase manufacturing programme (PMP) for components of Air Conditioners as many of these key inputs – especially compressors – are mostly imported. Therefore, there is a significant need to promote indigenization of AC’s in the country. It will give a positive signal to potential investors as well as help in aiding the ‘Make in India’ initiative.
Additionally, we urge the government to lower GST rates for key consumer products like air conditioners and TV above 32 inches (all sizes) as these products are the basic necessity of a household and not a luxury. Furthermore, reducing GST rates for TVs above 32 inches and air conditioner from 28 to 18% will give the much needed boost to the sector and will create more employment opportunities. The reduction will also make the product more affordable to the consumer. Further, 5 star rated energy efficient products across categories should be brought to a lower slab to incentivize consumers to shift to more efficient products.
We are highly optimistic about the upcoming budget and expect it to usher in a balanced combination of reforms and regulations, which will, in turn, boost the ACE industry, contributing positively to India’s growth story.”
