Union Budget 2016 – The year of rationalization and simplification
Union Budget 2016 was presented by the Government of India during turbulent times packed with moments ofunusual volatility in the international economic environment. The International Monetary Fund estimated global economic growth to be 3.1 percent in 2015, as against 3.4 percent in 2014, with emerging economies witnessing a declining growth rate. Viewed in this backdrop, the Indian economy’s growth of 7.2 percent in 2014-15 and 7.6 percent in 2015-16 is indeed significant. The country is definitely emerging as fastest growing economy and a safe sanctuary for long term growth, due to its improved macroeconomic condition. This is evident as the Economic Survey for 2015-16 rightly calls India “a haven of stability and outpost of opportunity”, which is indeed remarkable as this was achieved in the face of global headwinds and a second consecutive poor rainfall.
It was in the above context that the Finance Minister presented the Union Budget on 29 February 2016. The Union Budget, as per the FM’s view, is built on nine distinct pillars. Those areagriculture welfare, rural sector, social sector, education, skills and job creation, infrastructure and investment, financial sector reforms, governance and ease of doing business, and fiscal disciple and tax reforms. The emphasis on investment through various programs including the “Make in India” initiative continues to be the underlying theme in the Budget.
Moving on, the Budget contains a number of tax proposals for simplification and rationalization of the taxation process, which has become a nagging grief for Corporate India. The relief to small taxpayers, measures to boost growth and employment generation, incentivizing domestic value addition, reducing litigation and providing certainty are indeed key takeaways in the Union Budget.
The emphasis on ease of doing business is indeed embraceable. In Paragraph 102 of the Speech, the FM has proposed to introduce a bill to amend the Companies Act, 2013 in the current Budget Session of the Parliament. It is expected that the Bill would enable registration of companies to be completed in a day apart from improving the environment for start-ups.
The objective of this article is briefly to cover some of the key amendments proposed in the Finance Bill, 2016.