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Key sectors of India's economy will benefit from move allowing NRIs to launch one-man business entities. Image Credit: Gulf News Archive

Dubai: NRIs are being invited to take on a direct role in India’s business landscape, with the latest Budget allowing NRI entrepreneurs to launch one-man companies in the country.

This move, the government reckons, will free up funding inflows into various sectors of the economy, and removes much of the red-tape associated with launching a new business in India.

“This will boost investments into the country, certainly,” said Adeeb Ahamed, who heads LuLu Exchange International. "There will be no restriction on paid-up capital and turnover. Most important, a one-person company can be converted to any other kind. Overall, this is a good budget for NRIs who wish to contribute to Digital India’s growth story..."

The services sector contributes heavily to the country’s GDP, and the announcement to set up a social security net for gig economy workers and empower women to work in all categories will encourage better diversity at workplaces.

- Adeeb Ahamed of LuLu Exchange International

Rupee's stable

The budget has been received with equanimity by the currency markets, but the India stocks responded by shooting up 1,800 points.

Reform minded
"We could hear refreshing terminology in today’s speech by Nirmala Sitaraman such as "Tax system has to be transparent", sad Ram Buxani, a doyen of the NRI community in the UAE. "The importance given to the UAE in the speech itself makes NRIs here proud.

"Sitaraman by declaring disinvestment in several public sector units prove that business of any government is not to do business."

Another plus

In another move that would please NRIs, especially the wealthy and white-collar professionals among them, the government has also eliminated double taxation for them on foreign retirement funds.

"As a businessman I am very glad to note that there are some very specific steps being taken to tap the NRI investments," said Yussufali of LuLu Group. "Kerala-specific announcements such as development of major fishing harbours - including Kochi - huge allocation to further expand highway infrastructure, and the Kochi Metro will surely boost state’s economy and make it more business-friendly."

Yussuf Ali, founder and chairman Lulu Group
Yussufali, Chairman of LuL Group: "A magical budget sure to propel Indian economy even amidst the pandemic challenge..." Image Credit: Supplied

"A magical budget sure to propel Indian economy even amidst the pandemic challenge

Tax limit raised
For NRIs, from the tax assessment year 2021-22, the plan is to increase the threshold for tax audit to Rs100 million as against Rs50 million (for those transacting 95 per cent digitally).

Relief on taxes

The Finance Minister also refrained from making any change in the personal income tax slabs - at a time when the economy and its consumers are trying to shake off the pandemic ill-effects, this was probably the best outcome. Rather than raise revenues via new taxes, the government believes that leaving money to spare with consumers is the best way to get them to start spending... and revive a moribund economy.

"Direct taxes have not been touched," said Ram Buxani, Chairman of ITL-Cosmos Group. "We would like to see a day when India will be ruled by indirect taxes only and giving an exit to corruption in the system. People are not happy to allow access to tax babus to their private books. In short, it is proved that budgeting is a woman’s job."

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Ram Buxani of ITL-Cosmos Group reckons that the Budget 2021 proposals will play a part in the turnaround story. Image Credit: Virendra Saklani/Gulf News

Healthcare pivot

In the year after the COVID-19, no surprises that healthcare investments are getting a massive push. "We are glad that the total budget outlay for health and well-being has increased by 137 per cent, standing at Rs.2.23 trillion," sad Dr. Azad Moopen, Chairman and Managing Director of Aster DM Healthcare.

"It is encouraging to see the shift in focus to prioritise preventive care and well-being... over just sick-care. The pandemic put severe stress on the available healthcare systems and this move can go a long way in addressing the basic needs."

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Dr. Azad Moopen: "With provisions for vaccination being made available to the population at large at the earliest, the country can move beyond the pandemic to focus on the future Image Credit: Supplied

'Rationalise', not hike

The government has also sprung a surprise by not raising import duties on gold and other precious metals, which too would have been the easy way out.

"Minister Sitharaman has said the 2019 hike of import duty on gold from 10 per cent to 12.5 has reduced the overall imports," said Cyriac Varghese of Sky Jewellery. "Therefore, this will be "rationalized", which sounds as if this may be reduced in October."

Holidays and more...

Let's get the growth rolling in again... and by the looks of it, Budget 2021 seems to have connected with businesss houses. “Building materials sectors like steel will benefit in exports to India because of the duty reduction," said Anis Sajan, Managing Director of Danube Group. "Manucturers in India had hiked prices and this stand taken by the government to reduce import duty will help India's developers to look at other options." 

Anis Sajan
Anis Sajan of Danube Group: "Lowering import duty on steel will reduce dependence of manufacturers within India... from a cost perspective, this will help domestic developers." Image Credit: Supplied

“It was good to hear the expression "privatisation" instead of "disinvestment’", and "maximum governance minimum government" after a long time. It shows the Government has got its focus correct. The emphasis on infrastructure and healthcare, with no surprises or increase in taxation, makes it an encouraging budget

- Pankaj S. Jain of AskPankaj, a tax consultancy

NRIs get more than a mention

Unlike in recent budgets, this year Non-Resident Indians have received their fair share of incentives. "Allowing NRIs to open a one-man company and reducing the time period to reopen the tax assessment builds confidence and certainty," said Jeet Gianchandani, Chairman of JCA, a consultancy. "Being a tax litigator myself, the faceless appellate tribunal initiative will need some more time for execution."

Stock market has given thumbs up to the Budget - but budgets are about intentions. The ground reality and implementation will need to be seen

- Jitendra Gianchandani of JCA

India's property gets affordable push

35%

What affordable housing accounts for in terms of supply across the Top 7 cities in India, according to Anarock

The government did add a bit more towards getting the property and construction sectors back on firm footing. "Affordable housing and rental housing got a big boost with the government extending the period for extra deduction of Rs150,000 available for loans up to March 31, 2022," said Anuj Puri, Chairman of the property consultancy Anarock.

Customs duty on steel reduced to 7.5% will create some space to real estate developers who may not be in a position to increase prices immediately

- Anuj Puri of Anarock

"This will keep demand buoyant for affordable housing in 2021 as well. Further, the extension of the tax holiday for affordable housing projects for one more year will help bring in more new supply within this segment." As per ANAROCK Research, affordable housing already accounts for more than 35% of the supply across the top 7 cities in the country.

“It was good to hear the expression ‘privatisation’ instead of ‘disinvestment’, and ‘maximum governance minimum government’ after a long time. It shows that the Government has got its focus correct. The emphasis on infrastructure and healthcare, with no surprises or increase in taxation, makes it an encouraging budget.

All about messaging

Growth, self-reliance and revival-focussed spending - those were the key themes of Budget 2020. Businesses have reasons to feel a touch of bullishness with some of the proposals.

"This budget is clearly focussed on growth and will accelerate growth rates," said Dr. Dhananjay Datar of Al Adil Trading. "The stock market response is a clear indication of the fact that the budget is seen as being in the right direction. On the whole this is a pro-people... and everyone stands to gain."

Dhananjay Datar
Dr. Dhananjay Datar of Al Adil Trading: "It's pro people and just what the markets and businesses wanted as well..." Image Credit: Gulf News