Prologue: As part of our series focusing on the Union Budget 2019, we’ll be highlighting the opinions of our in-house experts and see what they think and expect from this year’s Budget. In this article, Aditi Mehra, an expert on Transfer Pricing talks about her Union Budget 2019 expectations. Read on!
Union Budget 2019 Expectations: Infrastructure Sector To Be Key As Usual
With the union budget around the corner, there are a lot of expectations from it. I think that infrastructure and construction are two traditional sectors that the government will be focusing on, as it rightly should on a year-on-year basis. Owing to trends in previous years, I expect significant benefits and promotions in this year’s budget as well.
Budget 2019 Expectations In Electric Vehicles
Among the non-traditional industries, I believe that the electric vehicle industry will receive a huge boost. Presently, with the EV industry being in its initial stage, I am expecting incentives being given to new entrants in the EV market. The government’s push to spread EV in India will serve the dual benefits of not only improving ease of doing business in India but also living in India, considering the alarming environmental concerns. Furthermore, the promotion of EVs in India will help revive the automotive industry holistically.
The EV industry in India needs a huge push as in the current scenario, the medium and small enterprises are trying to not only disrupt the sector but also construct the sector as a holistic ecosystem. The government needs to align their policies for the proliferation of EVs in the country, providing perks to the existing market players and encouraging new entrants into the market.
E-waste management sector is another sector that I believe that the government should focus on. Interestingly, e-waste management has not managed to draw significant attention but with the ever-increasing usage of mobile phones and other electronic devices, this industry holds paramount importance for the coming years. There are already some companies operating in this sector which need to be incentivized and new entrants to be encouraged to help India improve its ‘ease of living’ index.
Budget 2019: Expectations In FDI (Foreign Direct Investment)
Even though FDI has increased in recent years due to an improvement in the ease of doing business in India, there has been a decrease in FDI in the past three financial quarters, which can be a worrying sign for India.
This makes me a bit skeptical about the increase of FDI in the foreseeable years. However, at the same time, many reports say that India is expecting an influx of USD 100 billion in the next 2-3 years. There is an unclear picture about the trajectory of FDI in India with the country also going through an economic slowdown in recent years.
Budget 2019: Expected Changes In The Transfer Pricing Scenario
I am not expecting many significant changes in transfer pricing in this budget. With the government recently having ratified Multilateral Instrument (MLI), I am expecting some changes in the direct tax under the Income Tax Act. In this budget, I am also expecting some digital economy taxation changes but since a lot of them have been implemented earlier, I am not expecting a major change. On a holistic level, I am not expecting major changes in the taxation structure in this budget.
Budget 2019: For The Common Man
In Union Budget 17-18, then Finance Minister, Mr. Arun Jaitley emphasized on improving ‘ease of living’ in India. The incentives provided in Budget 2019 to healthcare, home loans and electric vehicles will play a crucial role in making advances towards improving the living conditions of Indians over the next 5 years. I believe that the upcoming budget will be more aligned with the common man than the businessman. Considering the recent turmoil in the economy, I am expecting measures in the budget to bring more stability and accountability. In the long run, I think the government’s biggest goal through this budget would be to alleviate the problems of the common man.
Budget 2019: Relief For Taxpayers?
For the individual taxpayer/the common man in India, the biggest concern has always been the taxes and the increase/decrease in tax rates. Since the government does not have much scope to provide tax cuts to the individual taxpayer, I am expecting the government to marginally increase the tax exemption limit from the existing INR 2.5 lakh to at least INR 3 lakh. To help the common man in his expenditures, I foresee healthcare and home loans to undergo major changes in the upcoming budget. At the very core, I believe that every step taken by the government in this budget should improve the ease of living in India.