Over the last two years, the government has introduced a host of economy-boosting policies such as the “Ten point economic stimulus package” as well as RBI's interest rate-cum-monetary policy to cushion the impact of the global financial crisis. While these initiatives have helped the country accelerate its growth levels, our aspirations of crossing the double digit growth threshold still remains unfulfilled.

The rising inflation is a reflection of the sorry state of affairs with regards to food-related infrastructure and storage in India. While road infrastructure has been given its due focus and attention, the government needs to consider the potentially accruable benefits by infusing technological advancements in its infrastructural framework of the agriculture and food industry. Another closely linked issue here is that of rising fuel prices. While petrol prices were deregulated in the pursuit of controlling fiscal deficit, the government should now consider freeing diesel prices as well.

In terms of budget expectations from specific sectors, I would like to highlight BFS and Pharmaceuticals verticals which are unarguably amongst the growth drivers of the country. While the IT-ITeS industry has more or less stabilised on the back of sufficient SOPs over a period of time, the pharmaceutical sector in India currently grows at 11-12 per cent, which is lagging compared to the global growth levels by 5-6 per cent.

The government's Vision 2015 statement had indicated an 18 per cent+ CAGR for the pharmaceutical sector, translating to doubling of revenues to $40 billion over the next five years. Towards this end, the Government should try to ensure that critical drugs are available at affordable prices which could be done by rationalising duties and encouraging competition.

Minakshi Batra

Director-India, IDA Ireland

End tax burden on security products

India is affected by a number of security issues. The recent terror attacks in the country’s metropolitan cities are still fresh in the mind with the continuous news and information being received about terror threats to various establishments in the country causing undue stress to our security services and citizens. The cost of purchasing safety and security equipment /systems is already very high considering the significant content of imported equipment and the customs duty payable on the same. Additionally, the Octroi and VAT imposed by the State Governments discourages investing in safety and electronic security solutions.

We would like to express our concern on the impact of taxation on security products and solutions and would request the Government to promote the safety and security industry. The overall industry is suffering from the burden of high import duties (about aggregate of 25-30 per cent in total), high VAT (12.5 per cent or above after adding surcharge in certain states) and other Government levies (like Octroi, etc). We recommend the following to the finance Minister’s consideration:

1) Removal of Basic Customs Duty of 10 per cent on the above security product categories to reduce the burden of overall customs duty.

2) Allowing 100 per cent depreciation on purchase of security products in first year to the companies.

3) Reduction of VAT across India and its uniformity to a level of 4-5 per cent levels .

Pramoud Rao

National President, Fire and Security Association of India

Extend tax sops under STPI scheme

The IT industry has been an engine of growth for India and we hope that the coming Union Budget will help continue its upward growth trajectory. We urge the Government to extend the tax benefits under the STPI scheme for another year or two to empower growth of small and medium-size companies. The exemptions under 10(A) and 10(B) were unaddressed in last year’s Union Budget and we are hopeful that they are adequately addressed this year. The last Budget’s plan on the increase in rate of Minimum Alternative Tax from 15 per cent to 18 per cent saw adverse affects on the shortterm cash flow of many companies and we look forward to a revision back to 15 per cent this year. The Government can reduce the uncertainty around the double taxation for software companies.

The Government has also been extremely supportive of the industry through their recent policies on R&D. However, we see that there is still immense scope for growth in the segment that will be facilitated by the tax sops, leading to increased investments in R&D and innovation.

Surjeet Singh

Chief Financial Officer, Patni.

Reduce import duty to 7.5%

“The Indian economy is showing healthy signs of growth and in order for us to maintain the momentum of continued growth, measures need to be taken in the direction of controlling inflation and moving towards GST for a viable tax structure.

If the government takes concrete measures to move towards the implementation of GST this will help reduce costs which in turn will help companies increase volumes and even reduce prices of the consumer goods and electronics items.

Rising incomes, growing aspirations, increased awareness and greater exposure to media have encouraged young consumers to spend on such products, which include LCD TVs, home theatre systems, laptops and smart phones.

This continues to prompt manufacturers to come up with more high-end products to feed the fast-moving demand among trend-setting consumers, who are willing to upgrade and purchase the latest products, which are perceived to be most desirable. Therefore, the industry has been demanding reduction in import duty from the current 10 per cent to a logical 7.5 per cent. LCD is a segment which is the fastest growing.

But much most of the LED/LCD TVs panels are imported. If the import duty is reduced, it will snowball into larger benefit for the industry and consumers.”

Mr Pranay Dhabhai

MD, AKAI India

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