Budget Should Encourage Financial Savings: CII | SupportBiz

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Budget Should Encourage Financial Savings: CII

 
Tags: budget, CII
Gross domestic savings as a proportion to GDP has declined from a high of 36.8 per cent in 2007-08 to 30.1 per cent in 2012-13. The sharp deterioration in domestic savings could be attributed to a consistent decline in financial savings of households which dropped from 11.6 per cent of GDP to 7.1 per cent during the same period.

The First Budget of the new Government should aim at restoring domestic savings rate (to at least 35 percent of GDP in a phased manner) by encouraging domestic financial savings in the economy through focused tax incentives, said CII in its pre-Budget submission to the Ministry of Finance.  

“In the current phase of economic downturn, any further deterioration in the savings rate would be detrimental and result in greater dependence on foreign capital for investments. The Government should announce concerted measures in the Budget to scale up domestic financial savings through fiscal means, which will help mobilize long-term savings for funding infrastructure and economic development”, said Chandrajit Banerjee, Director General, CII.    

While Entrepreneurs have been expecting some quick measures in their sector. Sandip Shah, Co-Founder and Managing Director - ShopYourWorldAlthough it was anticipated that the FDI would be allowed in the ecommerce market, recent news suggests that this may not be allowed at the moment. Many top etailers were apprehensive about this predicted move as they were ill-prepared to take on the influx of foreign competition in the sector.

While they breathe a sigh of relief, as far as the sector is concerned, it seems like the Government is investing more time into understanding how ecommerce works and are presently defining its role in the Indian economy.

Speaking on the expectations from the Retail sector, Sharad Venkta, Managing Director and CEO, TOONZ Retail India Private Limited, said that, “The first budget from new government will set the tonality for next five years and hence retail industry has high hopes from the government. NDA has stated policy against FDI in multi-brand retail, howeverit is important for the government to see the contribution of retail industry in driving overall agenda of creating employment, combating inflation, protecting consumer rights and growth in GDP.

“The industry is expecting the roadmap for GST with timelines so that organized retailers can do business seamlessly in a tax efficient manner. It is expected that retailers would pass on the tax benefits to consumers and hence will help in keeping the prices low,” added Venkta.

Retaining excise duty rates, concrete road map for GST, More priorities to MSME in governmentprocurements, infrastructure developments plans for road, port and better export benefits,” says Dev Anand - Director - Sundev Appliances Pvt. Ltd.

Narinder Singh, Director, Numero Uno, added that, “The costs are going up over the last few years in raw materials, labour, retail, land prices etc, no improvement in support infrastructure and amenities in the industry. Initiatives towards financial inclusion should be treated at par with Infrastructure industry as what Oxigen is doing is creating infrastructure for a rural payment ecosystem. The cash out Infrastructure in rural areas is KEY to success of financial inclusion. "

Pramod Saxena, Chairman and Managing Director of Oxigen Services India Pvt. Ltd., “There is a definite need for the Government to proactively recognize the Payments Industry, by treating it at par with the Infrastructure industry, in India. Initiatives towards financial inclusion should be treated at par with Infrastructure industry as what Oxigen is doing is creating infrastructure for a rural payment ecosystem. The cash out Infrastructure in rural areas is KEY to success of financial inclusion. 

Vikas Khanvelkar, M.D. DesignTech Systems Ltd, said that, "Government should focus on creating investor friendly atmosphere which the foreign investors will trust. Issues of retrospective taxation should be reduced. Focus should be on boosting the economy so that GDP will grow which will get more income for the government. The taxation regime should be simplified by reducing multiple levels of taxation and GST should be rolled out urgently. Government should offer special incentives on exports for SMEs to encourage them to look for  exports. Infrastructure reforms to improve network of high ways and availability of uninterrupted power is also a critical factor.