MUMBAI: The Indian government today unveiled a roadmap for financial year 2017-18 that covers areas from “highways to e-ways” (PM Modi’s words while describing the Union Budget 2017) aimed at “strengthening the hands of the poor”, while looking at further easing doing business by abolishing Foreign Investment Promotion Board and hinting at a new FDI policy. However, for India’s media and entertainment sector, especially the broadcast and cable sector looking to reach the $ 100 million turnover mark, there wasn’t much to cheer about --- unless an angel is hiding in the fine prints that are still being deciphered.
Finance minister Arun Jaitley, while announcing the Budget, has brought in macro-level major financial reforms by slashing tax rates for middle level income groups and opening the FDI floodgates in favour of a rural economy.
Jaitley’s budget focused on boosting infrastructure and lifting up rural incomes besides bringing in reforms in the financial sector such as the abolition of the FIPB to enable a new policy for FDI. The Indian Railways Catering and Tourism Corporation (IRCTC), one of the world’s biggest e-commerce companies, will be now be listed, Jaitley said, aside from sending out an indirect warning to economic offenders such as Lalit Modi and Vijay Mallya that for for absconders new legislation would be drafted soon.
But a big thumbs up to the government for allocating Rs. 10,000 crore (Rs 100,000 million) to boost rural fibre optics network to give further leg up to all round digitisation.
While the fine prints are still being read, some highlights are as follows:
# The FIPB will be abolished. Further liberalisation in the FDI policy would be done in the next few days. (Star Den, etc to benefit)
# SANKALP – Rs 4000 crore allotted for market-oriented training. (At least 4 million youth will be provided market-relevant training under Sankalp programme)
# Cashback scheme - Petrol pumps card payments, launch two more schemes for use of BHIM app
# In yet another boost for digitisation, the government has removed service tax on e-tickets .
#IRCTC to be listed.
# The government proposes to create a payment regulatory board at RBI. (The proposal assumes significance as there is currently no regulator for FinTech companies such as Paytm in India.)
# Small and Medium enterprises (MSME) to be encouraged. Income tax reduced to 25% from 30% if turnover is up to Rs 50 crore or Rs 500 million.
# Startups to pay tax on profits for three out of seven years, increased from three out of five years.
# Under Bharat Net, optic fibre cable has been laid out In 1,55,000 km. (Recent spectrum auctions have removed spectrum scarcity.) Bharat Net allocation at Rs 10,000 crore.
