CMA, TAASI and ICAI discuss and share divergent views on Indian Budget 2021

Coimbatore: The Budget proposals for the financial year 2021-2022, recently presented by the Union Finance Minister Ms Nirmala Sitharaman in Parliament, have evoked mixed response from the experts.

While certain provisions in the Budget deserve appreciation, certain others raise concerns, they opine. Both views were expressed in the Budget Discussion session jointly organized on the Zoom platform by the Coimbatore Management Association (CMA), The Auditors Association of South India (TAASI) and The Institute of Cost Accountants of India (ICAI)-Coimbatore, on February 8, 2021.

Those who participated in the deliberations included Mr Raghuvir Srinivasan, Editor, The Hindu-BusinessLine, Mr V.Ramnath and Mr Prasanna Krishnan, both Chartered Accountants.’Raghuvir Srinivasan in his ‘Budget Overview’ gave at least six reasons for calling it a ‘Landmark Budget.’ According to him:

* It is a ‘zero tax’ budget as there is no imposition of any fresh taxes, including income tax, direct tax and corporate tax.

* The Finance Minister has changed the fundamental philosophy of budget presentation. For the first time, the Budget was presented in a digital format. This time, the Budget is not held hostage to the deficit target.

* Through raising the borrowings, the Budget intends to give a push to growth, for which the Reserve Bank of India would take the supportive measures.

* The focus on health is widely expected in the wake of the Covid-19 pandemic. However, there will be a drop in allocation for nutrition, which needs to be watched.

* The Budget proposal anticipates that the spending on infrastructure development will create demand and put more money in the pockets of people.

* Another striking aspect of the budget is ‘transparency which is appreciable and noteworthy.’

Earlier, it was enjoined upon the Food Corporation of India to resort to borrowings to meet the farm subsidy. In the latest budget estimate, ‘every borrowing is in the book.’

Raghuvir Srinivasan noted that in the sphere of disinvestment, the achievement was just about Rs 32,000 crore as against the target of Rs 1.2 lakh crores in 2020-2021. In the latest budget proposal, the disinvestment target has been put at Rs 1.75 lakh crores, and this is sought to be achieved through privatization of two public sector banks and one general insurance company.

Given the resentment among the employees and the unions against the move, it is to be watched how far the disinvestment target could be realized. Ever since the budget was presented in Parliament, the market has been on the roll.

In response to a question as to why there is a curtailment in defence allocation, even in the face of perceived tension on the borders, Raghuvir Srinivasan said that the Expenditure Secretary had come out with an explanation that last year provisions were made to meet the salary and pension obligations of defence personnel. This year there are no such obligations to be met. Raghuvir Srinivasan said that ‘we have to take this version on its face value.

Mr Ramnath speaking on ‘Direct Taxes’ voiced concerns over certain proposals in the direct taxes provisions, particularly those relating to Medical/Educational Institutions, and Charitable/Religious Institutions. In the joint development of real estates, there will be differential rates of incentives for the builders and the landlords. The landlords will have reason to resent the proposal.

Ramnath cited quite a number of judgments delivered in various High Courts to clarify his points. Taking those 75 years old and above out of the tax net (for those who depend upon pension and interest) is a gimmick which in real life scenario will not make much difference, he averred. Prasanna Krishnan in his talk on ‘Indirect Taxes’ said that the projected collection of customs duty is Rs 1,36,000 crores (as against Rs 1,12,000 crore last year), excise duty – Rs 3,35,000 crore (lesser than last year’s Rs 3,61,000 crores) and GST – Rs.6,30,000 crores (last year Rs 5,15,100 crore).

Out of the total tax revenue (budgeted) for the year Rs 22,17,059 crore, the expected indirect tax collection is Rs 11,09,059 crores. Agriculture Infrastructure and Development Cess (AIDC) has been imposed on 25 types of goods. There is a reduction in the basic customs duty to the extent of AIDC raise. The reason behind raising the AIDC and reducing the customs duty is to be ascertained.

He dwelt at length on the proposed amendments to various sections of customs duty. The amendments regarding the seizure and confiscation of goods and conveyance in transit might give rise to litany of litigations, Prasanna Krishnan added.

CMA president Jayakumar Ramdass and secretary Dr Nithyanandan Devaraaj, TAASI president N.Ravisankar and secretary Mr S.Venkatesh, ICAI chairman V.Mathanagopal and secretary A.Alwar, participated along with a large number other office-bearers and members, and students participated. Programme chairman M.Ramji moderated the discussion.