Indian Retailers Cheer Budget 2017, Say Deduction in IT rate Will Boost Industry
The retail industry seems cheering the provision of deduction in income tax rate by 5% under the income band of 2.5-5 lakhs in the budget and Finance Minister’s statement that about 96% of individuals have an income of less than Rs 5 lakhs, as the move is expected to increase the disposable income in the hands of individuals and give a huge boost to the consumerism in the country.
“The Union Budget will positively impact the consumers. The proposed deduction in income tax rate by 5% under the income band of 2.5-5 lakhs will help in strengthening the purchasing power of individuals and can also be seen as a step towards redistribution of wealth”, said Gunjan Srivastava, MD & CEO of BSH Household Appliances.
“The finance minister has stuck to his agenda of fiscal prudence and pushing government’s idea for digital economy and rural push. Changes in direct taxes from 10% slab to 5% will have very limited money in hand for increasing consumption. Government has some of the ideas like abolishing FIPB, showing the expenses as capital expenses and revenue expenses instead of plan and non plan expenses indicates that government has clear cut agenda of larger reforms and acting one by one on it. FM has also shown the direction for wider tax base economy with transparency. Overall a good budget on predictable line and we look forward to GST fine print and implementation”, echoed Sharad Venkta, MD & CEO, Toonz Retail India Pvt. Ltd.
“There were no changes in the indirect taxes as expected by us, though there were some expectations in the market that there would be a change in service tax”, expressed Arun Ganapathy, CFO, Spykar Lifestyles Pvt Ltd.
The retailers have also hailed the government’s move of cash transaction limit of up to Rs 3 lakh. They think that the convenience of digital payments will encourage the consumers to spend more. They have welcomed the strong push towards building a digital economy and enhancing digital infrastructure as it will help them and consumers as a whole in the long run.
Manu Agarwal, Founder & CEO, Naaptol says, "Government has planned to take digitisation of transactions to the grass-root level and believe it is a good step towards a stronger economy. The convenience of digital payments will instigate the consumers to spend more and I believe it is positive sign for us."
They are also optimistic about the growth prospects of the industry with the reinforcement of the Finance minister on the roll out of GST per scheduled by July 2017.
“While it did not explicitly spell out any specific announcement for the retail sector, continued focus on inclusion of an actionable road map for the rollout of GST imparts confidence. We will have to wait and watch till the on ground implementation happens to gauge its impact”, said Mahesh M, CEO Ishanya.
The online player like Craftsvilla seems to have not much encouraged by the budget as there is very little for startups and ecommerce.
According to Manoj Gupta, Co- founder Craftsvilla, “There is nothing big bang in this Union Budget. There is very little for startups and ecommerce. Abolition of FIPB would hopefully make FDI easier. I was looking forward for the Government to take more proactive actions on areas like handloom and tourism that has huge potential for India. I would have also loved it if they announced developing handloom parks or heritage parks across the country with better facilities."
While there is no explicit spell out about any specific announcement for the retail sector the government has put continued focus on inclusion of an actionable raod map for the rollout of GST to impart the confidence. And also the minister’s assurance that the impact on demonetisation will not spill over to the next year is a welcome one and would augur well for the industry.