Dear Members,
Greetings!
Spring is here. Many trees in Mumbai have fresh light green leaves. Mumbai streets sprinkled with yellow Peltophorum blossoms are quite a sight! Hues in heat give some respite to our eyes, at least. Indian Laburnum should bloom soon and you can identify them, as these are totally golden yellow blossom laden trees without any greens. To the otherwise sultry weather, trees with bright flowers give a colourful and cheerful touch.
The Lecture Meeting on Finance Bill 2016 addressed by respected Shri S. E. Dastur, Senior Advocate has been a sought after lecture meeting each year. This year, the number of proposed amendments in the direct tax provisions were numerous and therefore the interest was even more. The lecture meeting held at Yogi Sabhagruh, at Dadar was packed with nearly 2,500 professionals and tax payers. The proceedings of the meeting were also webcast live. There were 4,000+ connections watching the live webcast. This was his 28th speech on the Finance Bill and we are indeed grateful to him for that.
Just like we had short videos on budget expectations, which I hope you had a chance to look at, a short video on post budget analysis by various professionals is posted on the Society’s You Tube channel. A number of tax professionals have given their views on various aspects of the Finance Bill. This video was shot at Yogi Sabha Gruh just before Mr. Dastur’s lecture. I believe that we have to go digital in many more ways. Video as a medium often is easier to comprehend the topic than reading, especially when it is focussed on a specific topic and is succinct. At the Society we will roll out more digital initiatives, especially after our office is renovated.
The Society conducted its Annual FEMA conference where the RBI officials were present. The Executive Director, Mr. B. P. Kanungo inaugurated the conference and gave a wonderful keynote address. On hearing the RBI senior officials one would feel tremendous amount of comfort about this regulator which is critical to the economy of the nation. He mentioned that the spirit of FEMA is carefully preserved by the RBI resulting in a shift from intrusive monitoring to document based monitoring. He mentioned that RBI was committed to facilitate ease of doing business and therefore numerous regulations / circulars will be folded back to 19 regulations. In this context even master circulars under FEMA have been replaced by 17 Master Directions from 1st January 2016. Two more master directions are soon to be kept in the public domain. It was heartening to learn that the RBI was committed to the principle of growth with stability. He mentioned that the laws had to be simple, comprehensible and easy to enforce and that the central bank was working at reducing definition differences with other Acts such as the Companies Act, 2013 amongst several other changes that are likely to get rolled out in the coming months.
The changes in tax provisions brought out by the Union Budget give a mixed picture. The compliance burden remains and faith in taxpaying citizens is low. However, the economic growth seems to be in focus in a big way. Several changes either through the budget or otherwise are notable in this context. The unified agricultural market scheme on e platform will be a major boost. The National Digital Literacy Mission will cover more than 6 crore households. The Real Estate Bill finally brings in a regulator to regulate important areas affecting millions and is rightly skewed in favour of the consumer. The recent Companies (Amendment) Bill, 2016 clarifies, amends several facets of a badly drafted and hastily enacted law. The government opened the gates for FDI for e-retail. This sector with about Rs. 65,000 crores in investment in the last 10 years is bound to see massive changes in the way this sector works in a digital age. The FII inflows are at 3 year high. A rate cut from RBI is impending. The budget seeks to curtail fiscal deficit to 3.5% of GDP in accordance with the FRBM Act, 2003. The clearance of new defence procurement policy, categorising Indian Designed, Developed and Manufactured (IDDM) could spell a boost to manufacture of defence material in India. We are eager to see the bankruptcy code become a reality. In other words there are positive indicators, in spite of severe challenges meteorologically, economically, and politically.
This year we can celebrate 25 years of liberalisation of Indian economy. The present government will complete 2 years too. Overall, India has come a long way from where it was. The Modi Sarkar seems to be doing something right, at a level that can change the game in many areas. The Prime Minister certainly has been a pragmatic modernizer of the role of the government in an economy like ours.
The virtuous cycle of creating demand by putting money in the hands of a billion people is still a moving target. Large investment in India in the private sector still looks risky. Although creation of jobs is the top priority, there are about Rs. 13 Lakh crores of projects stuck in some approval issue. Even if most of these are unlocked, it can result in meaningful employment and gainful compensation for millions of youth entering the work force.
Wishing you all happy new financial year beginning from 1st April!
