BUDGET 2019: TAX Sops Needed For Creation of Jobs in MSME, PPP, Tourism & Other Sectors

NDA government’s first Budget after resuming second innings to be presented in Parliament on July 5 by Finance Minister Nirmala Sitharaman will undoubtedly reflect most of the thinking of Prime Minister Narendra Modi and the electoral promises announced by the BJP during 2019 Lok Sabha polls.PM Modi having a receptive mind for new ideas and innovations is grappling with rural distress mainly caused by rain deficit and growing unemployment problem, especially among the educated youth despite generation of jobs, is expected to dish out several projects. These will be intended to improve infrastructure development and promotion of trade and commerce which will go a long way for the creation of job opportunities besides some more relief to the farming community. It is widely expected that the Budget is likely to provide some incentives for job creation by the public and private sectors. The Government has created a special Cabinet Committee on Employment and Skill Development chaired by the Prime Minister. Ministers-in-charge of Ministries handling labour-intensive sectors such as Textile, MSMEs, Tourism, Steel, Housing & Urban Affairs and Civil Aviation have been included in the high powered panel. The committee will work towards better synergy between job and skills, in addition to promoting job creation. Simplification of the process to set up Micro, Small and Medium Enterprises (MSMEs), cutting down regulatory norms, focus on shifting workforce from unorganised to organised sector are some of the points that industry experts want to be addressed in this Budget. Keeping in view that industry and agriculture must know how to coexist and one cannot survive by neglecting the other sector, Finance Minister Sitharaman needs to suggest measures for sustained recovery of the economic  with fiscal stimulus. As The Business Standard says overall activity from eight high-frequency indicators compiled by Bloomberg News show the economy lacked momentum, with the dot remaining unchanged from a month ago. A renewed tightness in liquidity conditions kept business activity subdued. The dashboard is a measure of “animal spirits,” a term coined by British economist John Maynard Keynes to refer to investors’ confidence in taking action. With gross domestic product growth slowing to a five-year low of 5.8% in the first quarter of 2019, the Reserve Bank of India did its part to support the economy by lowering interest rates for a third time and switching to an accommodative stance. The slowness in services was offset by a faster pace of expansion in manufacturing activity. That helped the Nikkei India Composite PMI Output Index remains unchanged at 51.7 in May from a month ago. The reading was the lowest since September. The survey showed factory gate prices were broadly unchanged from April, indicating pipeline price pressures are likely to stay subdued. The trend mirrors slowing demand pressures. Nirmala Sitharaman in her maiden Budget is expected to fine-tune BJP’s poll promises like Jal Jivan Mission, Matsya Sampada Yojana, national traders’ welfare board, and national warehousing grid for farmers. Nitty-gritty for pension scheme for small and marginal farmers and traders promised ahead of Lok Sabha polls and approved at the first meet of the Union Cabinet will also be part of the full-fledged Union Budget. These schemes will be allocated sums in the expenditure Budget. The government will endeavour to maintain fiscal deficit target of 3.4 per cent of GDP in 2019-20. The total size of the 2019-20 interim Budget approved before the Lok Sabha poll was Rs 27.84 trillion. Officials expect the size of the full Budget to only rise marginally during the current financial year ending on March 31, 2020.The government is hopeful of launching new schemes through adjustments to existing expenditure commitments. Meanwhile, Private equity (PE) and venture capital (VC) entities have called for alternative investment funds (AIFs), used to invest in starts-up, to be exempted from Section 56(2)(vii-b) of the Income-Tax Act, popularly known as “angel tax”, in the Union Budget. Currently, only venture capital undertakings, a sub-category of the Securities and Exchange Board of India registered Category-I AIF, are exempted. Many   people migrate to bigger cities for better prospets.Hence, benefits given to MSMEs will help generation local livelihood. There is growth in the job opportunities in sectors such as transportation, logistics, banking and financial services. However, construction is one area where there is less growth. Industry also expects the government to invest thoroughly in public-private partnership to create world class training institutes for skilling, rightly suggests The Hindu Business Line (Picture above shows traditional Halwa ceremony held in The North Block headquerting The Union Finance Ministry on June 24. It marks the beginning of printing of Budget documents. Finance Minister Sitharaman sharing Halwa sweet with her MOS Anurag Thakur and officials)