In her recent Budget speech, Finance Minister Nirmala Sitharaman underscored the profound transformation witnessed by the Indian economy over the past decade. Highlighting the Modi government’s commitment to structural reforms and pro-people programs, Sitharaman emphasized the continuation of the path of fiscal consolidation, aiming to reduce the fiscal deficit to 4.5% by 2025-26.
The Finance Minister refrained from proposing any changes relating to taxation, maintaining the status quo in tax rates for both direct and indirect taxes, including import duties. Sitharaman credited the Goods and Services Tax (GST) for significantly reducing the compliance burden on trade and industry. According to recent surveys, 94% of industry leaders perceive the transition to GST as largely positive.
Sitharaman emphasized that the benefits of GST extend beyond trade and industry to states and consumers. The reduction in logistics costs and taxes facilitated by GST has contributed to lower prices, ultimately benefiting consumers nationwide.
In terms of tax proposals, Sitharaman announced the extension of certain tax exemptions for startups and International Financial Services Centre (IFSC) units until March 31, 2025, aiming to provide continuity in taxation and foster a conducive environment for business growth.
Dhruv Kohli, Founder at Boba Bhai, expressed optimism about the future of GST post the Interim Budget. Kohli highlighted the positive impact of GST in reducing the compliance burden and enabling businesses to offer competitive prices while expanding their customer base. He anticipated further updates in the annual budget scheduled for July 2024, hoping for simplified tax structures and reduced compliance burdens.
Kohli emphasized the importance of investing in technology to streamline customs processes, automate warehousing, and optimize supply chain operations. He also stressed the significance of workforce skilling in areas like AI, supply chain management, and last-mile solutions.
Looking ahead, Kohli expressed the hope for rationalizing GST rates to ensure a simplified and transparent tax system that benefits all stakeholders and contributes to the overall growth and prosperity of the Indian economy.
In conclusion, the Union Budget speech reflects the government’s commitment to fiscal discipline, continuity in taxation policies, and leveraging GST for economic growth and consumer welfare. As India navigates its economic trajectory, stakeholders anticipate further reforms and investments to foster a conducive business environment and drive sustainable development across sectors.