Talking about capital tax, I can say that development was on the expected lines and anybody who thought otherwise was not thinking rationally
The push to the agriculture sector in the Union Budget will definitely help in developing the overall economy and automotive industry in particular. The decision will help create a positive environment among people in rural markets and the positive sentiments help. This has to be understood in the context of certain recent decisions including the Goods and Services Tax (GST). For example, I recently came across some data where the impact of GST in the rural areas has not been fully corrected, especially in sectors like FMCG.
At the company level, Mahindra & Mahindra (M&M) has a huge thrust in the rural Indian market and we track rural and urban sales differently. Remarkably, I would like to highlight that every year, we notice some increase in the rural share vis-a-vis urban sales, which is a good sign for the company as well as for the economy in general. The 1.5 times increase in minimum support price (MSP) of farm produce, according to me, is a big announcement and so is the Flagship National Healthcare protection scheme, with approximately 50 crore beneficiaries offering up to Rs 5 lakh per family per year for secondary and tertiary care hospitalisation. However, my concern is that the problem of inflation may occur because of it.
Talking about alternative fuel vehicles, I believe all fuels that meet the clean environment norms and help in reducing the dependence on oil import, should be encouraged. Of the hybrid and electric vehicles (EV), the latter is much ahead and now it is on the government to decide whether it wants to back, both technologies of mobility or stick to just one. I guess the EV will continue to receive benefits as it has been getting from the government in recent times. The current level of incentives are good and we should not be expecting more. Now, we as an industry should work on reducing the cost of production , which will help in taking the EV segment forward.
On the issue of increase in duties on certain categories of vehicles , it looks like the government has been giving a little more thrust on Make In India. We are not affected by way of change in custom duties because of the fact that not much of our products are imported . However, it will affect those companies, which have a lot of import to do.
Talking about capital tax, I can say that development was on the expected lines and anybody who thought otherwise was not thinking rationally.
One area of concern for me is the increase in oil prices and do not really know as to what was the assumed price for drafting the budget. If it goes upwards of $70, then the Finance ministry will have to step in and I am sure there is also some room kept for generating the income form the disinvestment.
The only thing I am disappointment in is the corporate tax, which I feel the Finance Minister should take a hard look at it again.
Dr Pawan Goenka MD, Mahindra & Mahindra
(As told to Shahkar Abidi)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
 "Pawan Goenka")
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}