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A Budget to Kickstart Growth: Cochin Chamber

In Business
February 04, 2021

Cochin Chamber of Commerce and Industry (CCCI) expressed satisfaction that its proposal to incentivize MSME’s has found a place in the budget speech by the Finance Minister Nirmala Sitaraman. There are more than 63 million MSME’s employing over 1100 millions of people and a thrust to their sector will benefit a large cross section of society.

CCCI is the only chamber from kerala who regularly gets invited for pre budget interaction with the Finance Minister.

The budget is more or less on expected lines with an increased outlay for capital expenditure, increased public private partnership and expected to create employment with no tax proposals. The decision to fund the capex expenditure with loans is also welcome as it done add any burden to the business or to the public at large.

The Chamber President highlighted the positive aspects of the budget like formulation of asset reconstruction company to take care of stressed assets, de criminilisation of limited liability partnership etc. He also expressed hope that value addition proposals covering 20 perishable commodities also will give a thrust to horticulture sector in India which is spearheading the growth in Agriculture.

The focus of the budget in the form of six pillars i.e. Health and Wellbeing, infrastructure, inclusive growth, human capital, R&D and minimum government and maximum governance, clearly indicates the priorities of the Government. The newly announced PM Atma Nirbhar Bharath Yojana with an outlay of 64,180 crores is expected to strengthen the foundation of health institutions in the country.

The decision to support 17,788 rural and 11,024 urban Health and Wellness Centers, establish critical care hospitals in 602 districts etc will play a crucial role in facilitating access to quality health care. Allocation of 35,000 crores for COVID -19 vaccine should ideally improve the speed of the vaccination rollout.

On the tax front, the Chamber appreciated the limiting of time period to reopen assessment up to 3 years from 6 years and bring in small taxpayers under the Dispute Resolution Scheme purview. Exemption of tax audit limit to 10 crores to enterprises who report their 95% transaction in digital mode and Exemption of dividend from TDS for foreign investors and calculation of advance tax after declaration of dividend was also welcomed.

The Chamber lauded the government for not imposing a COVID cess though the fiscal deficit is expected to be 9.5% of GDP and government needs to raise around 80,000 cr in the next 2 months of the financial year. The Kerala specific proposals like 1957 cr to 2nd phase of Kochi Metro, 65000cr for 1100Km Mumbai
Kanyakumari highway, Madura-Kollam corridor, Modernization of Cochin fishing harbor, allocation to Cochin Port Trust and Cochin Shipyard will give a boost to industrial growth in Kerala.

The proposal to rationalize the credit for tax paid abroad for NRI from double taxation was also welcomed. The Chamber President also stated that the focus on National Hydrogen mission also might give a trust to the proposal by the Govt. of Kerala to use hydrogen as green fuel in transportation.

The Chamber was apprehensive about the proposed duty reduction in Caprolactum as FACT, the lone producer in the state is gearing up to restart its Caprolactum plant after a long shutdown. The Chamber also urged the government to have a relook at the amount of 20000 crore provided for recapitalization of Public Sector Banks as it could be inadequate and monitor the efficiency of the faceless income tax assessment and faceless appeals which is proposed to be extended to Tribunals also.

The chamber feels that this could possibly be considered as an iconic budget coming in at a extremely difficult times.