I think the big thrust of this year’s budget is increasing the ease of doing business in the country. There are a number of initiatives the hon’ble Finance Minister has undertaken for this. This will create ground for the next leg of our economic development. He has not tinkered much with taxes and this clearly indicates government’s policy towards a stable and predictable tax regime, something which investors look forward to.
On the positives, we are happy to see that the government is encouraging “Make in India” campaign by working on creating an overall favourable framework, like infrastructure creation, lowering of corporate tax rate, access to funds, implementation of GST,. Over the coming weeks and months, we will look forward to more clarity on all these announcements. I also see government very serious about encouraging finance professionals back in the country, many of whom have left to for lack of suitable opportunities here.
On personal finance, I am happy to see the finance minister nudging citizens to take health and medical covers as well as plan for retirement years. With medical inflation beating general inflation and longevity of our citizens also increasing, this will provide a welcome cushion to people.
Coming to our sector, the hon’ble finance minister has not addressed many of our genuine expectations. We wanted the government to remove basic custom duty on imported natural gas, currently at 5% as it is an inverted duty. There is shortage of domestic NG and imported NG is very expensive, thus putting additional burden on us. Also, with petro products out of the ambit of GST currently, we would have liked the government to reduce CST to 1% from 2%, in line with the proposed Constitutional Amendment bill on GST, before eventually making it zero with bringing the petro products under GST. Here too, refiners bear this burden which is neither reimbursed by the customer not is recoverable or can be offset. Government has also not provided relief to E&P companies for their demand of service tax credit. Service tax drains away a substantial part of their funds fund and since crude oil/natural gas produced are not liable to excise duties, companies cannot take CENVAT credit of service tax incurred for exploration and production. We had hoped that the government would formulate a scheme for refund of service tax paid by E&P companies or services provided to E&P companies may be “Zero rated”, so that there is no stranding of taxes at the hands of service providers.
