The thrust given to rural and infrastructure sectors will have a multiplier effect on the economy but the Budget has failed on the corporate taxation front, India Inc said today. "The Union Budget continues to rightly focus on rural and infrastructure sector. The planned investment in these two critical sectors will not only create jobs but also give impetus to demand generation and economic growth," Walmart India President and CEO Krish Iyer said.
Assocham President Sunil Kanoria said rationalisation and simplification of tax rates would have benefitted the overall ease of doing business, especially keeping in mind that GST implementation seems to have been pushed ahead. Recalling his last year's promise of reducing corporate tax from 30 to 25 per cent over a period accompanied by rationalisation and removal of exemptions and incentives, Jaitley today limited accelerated depreciation provided under I-T Act to a maximum of 40 per cent from April 1, 2017. The benefit of deduction for research would be limited to 150 per cent from April 1, 2017 and 100 per cent from April 2020. "Overall, I would say (the Budget is) pretty good," Bajaj Auto Limited Chairman Rahul Bajaj said. PHD Chamber President Mahesh Gupta said the Budget's focus on rural India would go a long way to generate demand in the economy and give a push to overall growth and development of the country.
To boost domestic manufacturing and job creation, Jaitley allowed new units incorporated on or after March 1, 2016 an option of being taxed at 25 per cent plus surcharge and cess, provided they do not claim profit-linked or investment-linked deductions. He also proposed lower corporate income tax rate for next financial year for relatively small enterprises with a turnover not exceeding Rs 5 crore in fiscal 2016 to 29 per cent plus surcharge and cess. At present, they pay 30 per cent plus surcharge and cess.