In a pre-budget article earlier today, we indicated that what the finance minister (FM) says today for the 40% of us Indians must not be your guide to investment into India's future! Rather, what he says for the upliftment of the remaining 60% (those dependent on agriculture and allied activates) in terms of provisioning for their education and healthcare is what will determine our future - the future of this country and 'all' its citizens.
While the FM announced a slew of measures for the ‘people unlike us’ who are not really bothered about the change in income tax and corporate tax rates, what he failed to do was to disclose as to what percentage of the total expenditure is to be spent towards these ‘inclusiveness’ initiatives.
We also indicated that as far as India Inc. is concerned, it is already in the 'pink of its health' and a tinkering here and there (with respect to taxes and all) won't be of much significance in the long term.
While the FM responded by raising the dividend distribution tax from 12.5% to 15% for dividend distributed by companies, as also raising the education cess by 1%, these could not be called as ‘extraordinary’ measures that could significantly impact India Inc.’s profitability and free cash flows.
While the FM announced a slew of measures for the ‘people unlike us’ who are not really bothered about the change in income tax and corporate tax rates, what he failed to do was to disclose as to what percentage of the total expenditure is to be spent towards these ‘inclusiveness’ initiatives.
We also indicated that as far as India Inc. is concerned, it is already in the 'pink of its health' and a tinkering here and there (with respect to taxes and all) won't be of much significance in the long term.
While the FM responded by raising the dividend distribution tax from 12.5% to 15% for dividend distributed by companies, as also raising the education cess by 1%, these could not be called as ‘extraordinary’ measures that could significantly impact India Inc.’s profitability and free cash flows.