Budget and I: Gujarati Businessmen Analyze Budget 2013

Gujarat is known for producing smart businessmen. While these businessmen may never learn to code or to play games with the, now famous, “big data”, but they are astute in their own way. Under 24 hours since Budget 2013 was presented by the Finance Minister, group of businessmen from Gujarat gathered at Courtyard Marriott in Ahmedabad to deliberate upon the fine print.

Organized jointly by FICCI (Federation of Indian Chamber of Commerce and Industry) Gujarat Council and KPMG India, the interactive session was called “Budget and I” had many takeaways. Although the overall mood did not ooze confidence, hope was ubiquitous. The event provided a much needed one-on-one understanding of the implications of the budget, in depth analysis of direct/indirect tax reforms and on different sectors by the participants at the event.

Post a welcome note by Param Shah, Head FICCI-GSC, the session begin with a video where Naina Lal Kidwai, President FICCI and Country Head HSBC India, presented her views on the budget: “I feel it’s a responsible budget, with the fiscal deficit (seemingly) under control. The FM has realized that growth is important, industries are important, and finally creating jobs is very important. Once we keep industry at the central, reforms shall come.” Sunil Parekh, Executive Committee Member, FICCI, later took the dias, and shared the macro-analytic perspective of the budget. He opened his talk with a joke saying, “Earlier we had 9% growth and 5% inflation, but after Pranabda regime, it has come to 5% growth and 9% inflation.” He went on to say that a lot of people fail to understand the implications that the budget has on them, but actually, it affects our demands significantly. He was happy that the FM realized the fact that fiscal deficit is sacrosanct and feels the “worst is over”. He also welcomed the wind energy generation-based tariff and said that once GST comes in, it will add 1 to 2% growth.

Mr Parekh’s talk was followed by the discussion by KPMG experts, Uday Ved, Vishal Gada, and Parind Mehta, on the impact of the budget on direct and indirect tax proposals. The panel discussion, “Sectoral Impact of Budget”, was moderated by Pradeep Udhas, senior partner, head of markets, KPMG in India. Some of the key takeaways from the discussion are as follows:

 Mr Pradeep Udhas, KPMG said on IT: Although overall the IT industry has been disappointed, the semiconductor industry, which can be considered as a sister concern of the IT industry has received tremendous boost with the incentives.

Dr Vikram Shah, founder and CMD, Shalby Hospitals on Healthcare: Healthcare as a sector was not even a part of the industry some 10 years ago. Major challenges that this industry faces are low returns and long gestation period, coupled with no industry specific long term policies. Production of healthcare instruments/products needs to be incentivized so that the industry need not rely on imports. The current budget has done nothing to improve medical tourism (big income generator for the local hospitals). On the first day a medical tourist arrives in India, she has to report to the police station. This is not the case with other tourists. When we talk about government allocation on research, where are the published research papers? Are research papers, equivalent to the money pumped in, published in International journals?

Manjula Pooja Shroff, MD, Calorx on education: Allocation of Rs 250 crore for sports coaches training is a really good measure. With the Rs 4,700 crore allocation, the focus on medical education is also welcome.

Ashish Soparkar, MD, Meghmani Organics on industry: Clearance of environmental issues needs to speed up. Also, I see no reason why the government is not ready to set up “chemical parks” on the lines of “IT parks”.

Amit Israni, Head Corporate Finance, Pacifica Group on industry: The government’s introduction of tax-free bonds for promoting infrastructure development but has not done anything specifically to ease the path for low-cost home developers

Nitin Gandhi, GM -Taxation, Cadila Pharmaceuticals said on pharma: The pharmaceutical industry still requires incentives for promoting innovation and R&D, that can lead to lowering the costs of medicines

The budget did acknowledge the growing power of startups, here are some insights!