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Government should take bold and decisive steps

February 25, 2015 17:34 IST

Government should take bold and decisive steps
Rana Kapoor, MD & CEO, Yes Bank and President, Assocham

Amidst the government’s enabling role to usher in a more friendly investment environment and incremental micro reform measures, prospects for a growth recovery have brightened. I view this Budget as a platform for the government to take bold and decisive steps to give the economy a further push.

The significant underachievement on the budgeted disinvestment target in the last few fiscal years should encourage the government to prepare a roadmap to ensure the success of the program going forward.

Creating a 5-year roadmap with Cabinet approvals and road shows to commence a systematic program for disinvestment with a rolling list of disinvestment targets, reviewed every year, earmarking disinvestments to the tune of at least 0.5% of GDP each fiscal year, undertaking progressive disinvestments in PSUs operating in non-strategic sectors and expediting the lowering of government ownership to 52% in all PSBs in a time bound manner will be bold and decisive steps in this regard.

Budget 2015: Complete Coverage

Another critical area of attention has to on reenergizing the Indian Railways. The Railway Ministry can announce a comprehensive plan and a target for facilitating FDI in the sector. The Government can set up a Rail regulator to set forth a transparent model of PPP in railways. There is merit in looking at an IPO for Indian Railways’ star eCommerce entity IRCTC which will be valued at least $5-6 billion today

Also, there is a need for focused reforms in the Banking sector - with modification in policy framework, enhancement of financial soundness and credibility, creation of a competitive environment, and strengthening of institutional framework. To begin with, it is critical to remove tax distortions for bank deposits by reducing the lock-in for bank deposits eligible for tax rebate to 3 years (from 5 years) in line with ELSS MFs or tax free bonds and increasing the threshold for mandatory TDS on interest income to Rs 50,000 in a year (from current Rs 10,000).

Treat tourism industry at par with exporters
Anil Khandelwal, CFO, Cox & Kings 

The tourism industry should be treated at par with exporters based on its foreign exchange earnings. Tourism industry gets discriminated vis-a-vis exporters even though the tourism industry earns foreign exchange and retention of foreign exchange is much higher than any other export oriented industry.

Like exporters, based on foreign exchange earnings, tour operators should also get exemption of service tax on package tours as the payment is received in foreign exchange. With the service tax added at present, India packages loose on account of price competitiveness and cannot match the prices of holiday packages, which are on offer by our competitive countries.

Budget 2015: Complete Coverage

Last month China announced the tourist tax refund scheme to boost inbound tourism and domestic consumption. According to this scheme, foreign tourists can receive a rebate of upto 11 per cent on consumer goods purchased at designated departmental stores. With the government’s thrust on tourism as well as on ``Make in India’’ such schemes are ideal for India.

With effect from July 2012, service tax has been levied for the services provided to Indian tourists visiting neighbouring countries like Nepal, Bhutan, Sri Lanka, Bangladesh, Maldives etc., which was not there prior to July 2012. This needs to be withdrawn as services are provided outside India.

Rationalising tax on ATF will make air travel more affordable and will boost air traffic.

Provide seed funding to establish 20-25 heliports at important tourist locations. The balance should come from state governments and private operators.

Lending to hotel projects should be under the "infrastructure Lending List" due to which hotels will be able to access lower interest rate loans and longer tenor loans. This will lead to a revival of the Hotel industry, thereby increasing capacities for tourists.  

Any progressive policy measure on E-commerce would be welcome
Suresh John, Founder and CEO, RoomsTonite

“E-commerce is a rising sector in the country. It has created many new jobs and promotes entrepreneurship. Any progressive policy measure announced on the floor of Lok Sabha during the upcoming Budget would be a welcome step.

It is encouraging to know that Finance Minister recently held an exclusive Pre-budget meeting with the representatives of IT industry.  This was for the first time that the Union Finance Minister held an exclusive Pre-budget meeting with the IT sector representatives.

Budget 2015: Complete Coverage

Higher budgetary allocation for awareness on benefits of digital initiatives will be helpful to make Prime Minister’s Digital India concept a success. Measures on ease of doing business and promoting India as the preferred investment destination will be helpful for startups to attract funding from quality investors.

Being an e-commerce facilitator for hospitality sector, we at RoomsTonite think that this sector has huge growth potential. Hotel segment, which is one of the largest employers in India, could contribute substantially to tourism thrust as outlined by our Hon’ble Prime Minister.”

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