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VOLUME 113 | ISSUE 4 | JANUARY-FEBRUARY 2021
UNION
BUDGET
2021
Cover Story Tax Corner Global Connect
India FY 2021/22 Union Budget: Budget 2021 – 2021: A Promising
Bold spending plans Setting the Pace Chapter in the
underpinned by Shaky for a Resilient India-Germany
07 Funding Projections 15 V-shaped Trajectory 20 Story
REBOOT REFORM RESURGE
Contents
President
Mr. Rajiv Podar
January-
February 2021
Vice-President
Mr. Juzar Khorakiwala
Editor & Publisher
Mr. Ajit Mangrulkar
Director-General
Executive Editor
Mr. Sanjay Mehta
Dy. Director-General
Copy Editing & Concept
Ms. Chitra Kamath
Jt. Director-Membership
Ms. Jayshree Poojary
Asst.Director-PR
Views expressed in the IMC Journal
are not necessarily those of the
Committees of the Chamber.
Non-receipt claims will not be
entertained after four months of the
publication of the journal;
six months in the case of
overseas subscribers.
Please send correspondence
concerning this journal to:
Editor, IMC Journal
IMC Chamber of
Commerce and Industry
IMC Marg, Churchgate,
Mumbai- 400 020
Tel: +91-022-71226633
Fax: 2204 8508
E-mail: ajit.mangrulkar@imcnet.org
Website: www.imcnet.org
Insight
7 UNION BUDGET 2021-2022
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Agri-infra focus of Union Budget will
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Cover Story
14 Does the budget have the Midas
Design & Printing: 8 India FY 2021/22 Union Budget: touch? Let us see through the Fog
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Bold spending plans underpinned by with Insight and Clarity in this
Tel: +91-022-4036 4600
E-mail : info@finesse.co.in Shaky Funding Projections recovery of a Century
Reboot | Reform | Resurge
IMC Journal n January-February 2021
1
Tax Corner 35 Can the Union Budget 2021-22 accelerate India’s
Economic Growth?
16 Budget 2021 – Setting the Pace
for a Resilient V-shaped Trajectory 35 Reimagining your Business for the Digital Era
36 How to Start-up and then Scale-up?
36 Commodity Market Drivers and Outlook for 2021
Global Connect
37 Startup Entrepreneurs - Art of Fundraising
21 2021: A Promising Chapter in the India-Germany
37 Pre-Packaged and Liquidation under IBC
Story
38 What MSMEs need in the Current Economy?
23 Meeting with Norwegian Consul General to Mumbai
39 Marketing and Sales Guide for Entrepreneurs 2021
23 MOU signed between IMC and Japan Association to
establish Bilateral Business Forum 40 Business Partner City Roundtable by Osaka City
Government
Special Initatives
41 Recipe of Success with Innovation and Tech
24 Hon’ble Finance Minister at
42 Commodities: Options in Goods Contract - Gold and
Sarvasparshi Arthsankalp 2021
Gold Options in Goods Contract - An Investment Tool
24 Memorandum Of Understanding signed with
the Department of Commerce and Industries, 42 What if the soul of your business disappeared
Government of Mahrashtra overnight? Turning calamities into opportunities
25 Conference on Technical Textile – The Future of 42 Human Capital – Your Differentiator in 2021
POETRY
Indian Textile Industry
43 Start-ups – Tax and Regulatory Perspective
Budget Special
27 The Union Budget 2021-22 Ladies Wing
43 An Inside View of BR Chopra Iconic Films – In
Conversation with Mrs. Renu Chopra
Knowledge 44 The Grandeur of Russia
29 Will the New Farm L aws Reshape Agriculture
44 Shots of Serenity with Swami Purnachaitanya
Markets?
44 Women in Philanthropy - A Personal Journey, a
29 Seminar on – Navi Mumbai as Entrepreneurship
Hub Public Conversation
31 Panel discussion on Small Company Stock Market 44 Union Budget 2021 – Possibilities Amidst
Listing Pandemonium
32 Journey Beyond Accreditation 45 Journeys Beyond Wanderlust - XPD2470 Drive from
Coimbatore To London
33 INDCON 2020-21 – Building Stronger Research &
Development Ecosystem – Enabling Saksham Bharat 45 Genext Espresso
Abhiyaan 45 The Short Story Discussion with Ms. Soha Parekh
Reboot | Reform | Resurge
2 IMC Journal n January-February 2021
From the President’s Desk
Mr. Rajiv Podar
As we move from survival to revival
Wishing IMC
phase, everyone alonga very happy
with ourand26a
sprosperous
p e c i f i c - enew
x p eyear
r t 2021!
committees
continues
We started to work 2021on range
on of
an
programs
extremely and positivevirtual
noteevents
with theto
galvanize,
commencement inspire and empower
of the COVID-19our
members
vaccinationwith drive.a The
shared learning
second phase
experience
of the vaccinationas we navigate
drive hasthrough
already
COVID
begun and crisis.brings new hope and
enthusiasm in our drive to fight the
With
COVID.the vaccine now being
developed and approved by a few
countries, we hope we can begin
World Economy
“normal living” in the coming
Although recent vaccine approvals
months.
have raised hopes of a turnaround in
the pandemic later this year, renewed
World Economy social distancing through 2021, contraction in government spend-
waves and new variants of the virus
pose concerns for the outlook. Amid weighing heavily on GDP. ing).
It is expected the decline in world exit a technical recession. Supply- basis, the second advance estimate
exceptional uncertainty, the global
GDP in 2020 to be less severe at side
Indianmeasure,
EconomyGVA recovered to pegs a weaker
• Basis growthelevated
the recent for FY21CPI at
economy is projected to grow 5.5
–3.7% compared to –4.4% in the +1.0%YoY from -7.3% in Q2. -8.0% vs. preliminary estimate
inflation prints and expectations on of
percent in 2021 and 4.2 percent in
September Global Economic • India’s GDP growth, while still -7.7%.
evolvingHowever, at a closer(food
price pressures look,and
we
2022. The return to positive growth is
Outlook(GEO). The Fitch Rating in contraction, registered a shal- find that GVA is now expected
cost-push), inflation trajectory for to
remarkable especially since it has
The projected
Research Reportsgrowth
haverecovery
also revised this lower contraction of 7.5% YoY in Q2 see a shallower contraction
H2FY21; was revised by RBI at 6.5%
occurred almost a quarter earlier
yeartheir
up follows a severe
annual world collapse in 2020
GDP growth F Y 2 1 v i s - à - v i s b ro a d m a r ke t vs. -7.0% earlier
projecting – which
inflation is the
at 6.8% fortrue
Q3
than was envisaged 3-6 months
that has for
forecast had acute
2021, butadverse impacts
only modestly, expectation of 8-9% contraction. indicators of real economic activity.
and 5.8% for Q4 (vs. a range of 4.5-
back and in comparison, to record
on5.3%
to women,
(fromyouth,
5.2%), as thethepoor,
deterio-the 5.4%rose
announced
contraction of 24.4% and 7.3% in PMI to 55.3 ininFebruary
Oct-21).from
For
informally
rating employed,
outlook in the veryand near
thoseterm who • Q2 GDP data has pushed India FY22, it estimates a range of 4.6-
Q1 and Q2 respectively. The brisk 52.8 in January owing to quicker
work in contact-intensive
partially is offset by a stronger sectors. into a technical recession. However, 5.2% in H1.
sequential recover y in Q3 FY21 increase in new orders.
The global
outlook fromgrowth contraction
the second half for
of the economy has shown signs of
can be attributed to - pickup in
2020year.
the is estimated
We are now at -3.5 percent,
significantly reviving due to easing of supply • Recovery in the manufacturing
0.9 percentage
manufacturing, construction and Union Budget 2021-22
more optimistic point higher
for 2022, as than
we disruptions as well as unlocking of space in Q2 was driven by the
real estate activities as the economy We thank of
the Motor
Hon’ble Vehicles
Union Finance
projectedvaccine
assume in the rollout
previous willforecast
facili- pent-up demand. sectors and
underwent a gradual unlock and Minister
(reflecting
tate stronger-than-expected
a material easing in social Transport Equipment,considering
for favorably Electrical
labour mobility normalised, pent- IMC’s recommendation during Pre-
momentumand
distancing in boosting
the second half of
economic • On supply side, the noteworthy Equipment, Fabricated Metals,
up and festive consumer demand Budget discussion.
2020).
activity. A significant uplift to feature is the return of Manufactur- Tobacco, Textiles and Apparels,
getting bunched up and mercifully
Eurozone GDP of growth in 2022y isis ing and Utilities GVA to expansion L e a t many
With h e r, Efresh
l e c t ro n i c s the
ideas, , H FY22
eavy
The strength the recover an absence of a second wave of
expected territory. Growth in Manufacturing
projected from
to varygrant disbursements
significantly across virus in India alongside a few policy Machinery,
Budget signalsFurniture
the surgical anddelivery
Wood
from the EU’s Next Generation EU GVA has now turned positive after a Products,
by Beverages,inBasic
the Government areasMetals,
it was
countries, depending on access to initiatives especially for the real
recovery fund (NGEU). The US gap of 4-quarters, upending the among others.
desired the most. Undoubtedly, the
medical interventions, effectiveness estate sector. Further, accelerated
and the support,
of policy Eurozoneexposureis expected
to cross-to drag from both pre COVID and economic backdrop against which
progress on vaccine and its rollout
regain
countrypre-pandemic
spillovers, and (4Q19) GDP
structural
COVID related reasons. Further, • On
this demand
Budget wasside, while all was
presented key
in Q4 has buoyed consumer and
levels earlierentering
characteristics than the previously
crisis.
healthy expansion in Agriculture drivers continue
challenging to say to thecontract
least. Theon
business sentiment. In this spirit,
anticipated, by 3Q21 and 2Q22, and Allied activities on the back of a annualized has
government basis, the extent
focused on growth of
underscoring the strength of the
respectively.
Indian Economy Vaccine rollout surplus monsoon is comforting. The contraction
and economiceased recoverysignificantly
by providingin
V-shaped recovery, a gamut of lead
problems or delays are the drag in growth however came from aQ2 vis-à-vis
counter Q1. fiscal push.
cyclical
India’s GDP posted a mildly positive indicators either surpassed or were in
key downside risk and could the financial sector (emanating
growth of 0.4%YoY in Q3 FY21 after striking distance of pre-COVID levels In totality, bythe Budget
result in repeated circuit- from deceleration in credit offtake) • Supported expenditure
a hiatus of 2 quarters to finally by the end of CY20. On an annual announcements
breaker lockdowns and extensive and public sector (reflected in a rationalization and other sources in
must be seen of
Reboot | Reform | Resurge
IMCIMC Journal
Journal < November-December
n January-February 2021 2020
3 01
From the President’s Desk
conjunction with the multitude of smart and intelligent way to generate Sitharaman ji at a meeting
measures announced for the rural funds. organized during her first visit
and MSME sectors in the ongoing to Mumbai post the Budget.
IMC welcomes the proposals to
fiscal year.
set up – (i) Asset Reconstruction • Agriculture accounts for 16%
Amidst the pandemic, while an Company Limited and Asset of India’s GDP has emerged as
enhanced focus on Health sector was Management Company to tackle the star performer in India’s
expected, the Budget overdelivered stressed assets of the banking pandemic-hit-economy by
on this front. The introduction of sector, (ii) A Development Financial recording 3.4% growth during
the new PM AtmaNirbhar Swasth Institution with an initial corpus of the first two quarters of 2020-
Bharat scheme, a clearly demarcated Rs 20,000 cr for infrastructure and 21. IMC organized an excellent
fund allocation towards COVID real estate lending along with début expert panel discussion on the
vaccine, along with 137% increase in of a National Monetization Pipeline Agricultural reforms to discuss
allocation towards the health sector and Zero-coupon bonds. These are the transformations expected
are welcome steps. all steps to ensure requisite long-term in the Indian agricultural
funds. landscape.
In addition, the thrust on universal
coverage of water supply, clean air, Separately, increase in permissible • India witnessing the startup
expansion of Ujjwala scheme reflects FDI limit from 49% to 74% in boom with of 50,000 plus
the positive intent of the Government Insurance Companies and allow startups. We sparked a new
to improve general wellbeing. foreign ownership and control with conversation to harness
safeguards is an attempt to attract the entrepreneurial spirit
The Budget reinforces the
overseas players in this underinvested in Navi Mumbai with a
continued thrust on agriculture
sector. webinar on New Mumbai as
sector and welfare of farmers, via
Entrepreneurship Hub Series
higher outlays to RIDF, expansion In addition, the revised customs duty
to create an ecosystem for
POETRY
of Operation Greens Scheme and structure to eliminate distortions,
entrepreneurs to fulfil their
e-NAMs etc. In fact, introduction especially for iron and steel,
needs in terms of access,
of the Agri-infrastructure cess in Electronic and mobile phone, textiles,
human capital and funding.
a non-inflationar y manner is a chemicals, gems & jewellery, leather
smart move to channelize revenues among others, reinforces the creation • With technology accelerating
in a guaranteed manner to further of levers to propel growth in the job- innovations and digitization
agriculture investments. creating sectors. changing the face of business
today, we had a scintillating
From industr y perspective, However, there are few misses
session on driving Digital
the Budget rightly frontloads specially concerning the Tourism,
Strategy by Prof Sunil Gupta,
infrastructure investment. The Aviation, Hospitality sector. Also,
Edward W. Carter Professor
allocation towards infrastructure with there are some concerns regarding
from Harvard University.
a stronger focus on roads, railways, Tax amendments got in the Budget.
ports, urban infrastructure among IMC has taken up the issues and • IMC has been organizing
others, will create a much-needed represented to the Hon’ble Finance INDCON Building Stronger
multiplier impact in the economy. Minister for consideration. Research and Development
Towards this end, the pegged capital Ecosystem Enabling Saksham
Overall, the Union Budget makes
spending at 2.5% of GDP in FY22 Bharat Abhiyan – a series of
a fervent pitch by attaining a fine
which is a significant jump from virtual conclave pan-India with
balance of supporting growth via a
1.7% in FY20, assumes paramount a focus on industry-academia
durable impetus to investments with
importance given that capex has partnership. A fter Mumbai-
the commitment of a glide path of
a nearly 7x impact on GDP than Pune, Delhi-NCR INDCON
fiscal consolidation beginning FY22
revenue spending. Kolkata & Guwahati has also
onwards.
received a resounding success
A well laid out plan for disinvestment
with India’s top educationist
including 2 Banks and an Insurance IMC Activities
and eminent industry experts
Company sets the stage for • I had the honour to speak and covering a wide range of issues.
revamping of Public Sector Policy. share the dais with the Hon’ble A robust collaboration between
Focus on Monetization of Assets is a Finance Minister Smt Nirmala industry-academia will create
Reboot | Reform | Resurge
4 IMC Journal n January-February 2021
an employment-ready workforce biggest competitor, disrupt Considering the emergence
producing a vast pool of skilled your business and emerge of technical textile as a fast-
talent. in the new stronger avatar.” growing sub-segment finding
– Mr. Rajesh Srivastava. its usage in an array of sectors
• MSME’s represent the spirit
A scintillating session on IMC was honored to have
of enterprise and are the
discovering the soul of your Hon’ble Minister for Textiles &
backbone of our economic
Women and Child Development
engine as we head towards our business by Author Rajesh
Smt. Smriti Irani at the
$5 Trillion Goal! Through a Srivastava sparked a new
Technical Textile Summit.
session on What MSME’s need dynamic on how re-inventing
On the potential of technical
in the current economy. We our businesses at regular
textile, she said that Technical
had eminent experts discussing intervals can help us thrive in Textile is poised to be the
tangible solutions and an ever-changing world. future of the Textile Industry
actionable insights to accelerate
• Technical Textile accounts for with target growth of 15-20pc
the growth momentum for
13% of India’s total textile and to increase to 40-50 B USD by
MSME’s.
2024.
apparel market contributing
• “Businesses never die,
to 0.007% of India’s GDP. Stay safe Stay well
Business models do. Be your
Reboot | Reform | Resurge
IMC Journal n January-February 2021
5
Knowledge
COVER STORY
Reboot | Reform | Resurge
6 IMC Journal n January-February 2021
Knowledge
UNION BUDGET 2021-2022
Agri-infra focus of Union Budget will exert
long-term positive impact
G. Chandrashekhar
Economic Advisor, IMC Chamber of Commerce and Industry and Director, IMC-ERTF
The focus of the Union Budget To address the issue of water stress, and southern coast to be developed
2021-2022 is on healthcare, the Budget has doubled the micro- as hubs of economic activity. At the
education & infrastructure. Despite irrigation fund to Rs 10,000 crore. same time, inland fishing will be
robust economic growth, our social boosted with plans to develop inland
India is among the world’s largest
development indicators leave much to fishing harbours and fish landing
producers of fruits and vegetables.
be desired. So, higher outlay for and centres along the banks of rivers and
The scope of Operation Green
renewed emphasis on healthcare and waterways.
which focused on tomato, onion
education is welcome. With proper
and potato is now extended to as India is the world’s second largest
implementation, over time, our social
many as 22 perishable products of producer and exporter of cotton. But
conditions are sure to improve.
horticulture. This is intended to we do import about 15-20 lakh bales
To pare India’s infrastructure deficit, result in reduced wastage, higher of extra-long staple (ELS) varieties
the outlay of Rs 5.54 lakh crore value addition, price stability and of cotton that are not grown in our
will look to create assets like roads, improved price realisation for growers country in adequate quantities. To
bridges, etc., ease transportation while strengthening the supply chain. discourage imports and encourage
INSIGHT
bottlenecks, create jobs and incomes domestic production, the Budget has
The varying rates of basic customs
as also utilize commodities such as imposed a 10 percent customs duty
duty on import of a variety of
cement, steel, copper and so on. on cotton import.
vegetable oils and pulses have now
The policy to scrap old vehicles been reduced and standardized. The This levy has no doubt upset the user
will boost the automobile industry, basic customs duty will be 15% on all industry. But there is a silver lining.
promote commodity consumption and vegetable oils and 10% on all pulses. There is now an opportunity for the
help reduce vehicular pollution. This standardization will also help user industry to establish backward
address objections raised at the WTO linkages and boost cultivation of ELS
Agriculture and allied activities saw
by supplier countries about India’s cotton domestically. The industry
enhanced agricultural credit target,
unstable customs duty regime. must work with farmer producer
higher allocation for micro-irrigation,
companies by using the contract
focus on rural infrastructure To compensate for loss of revenue
farming law.
development and rationalization due to standardization of customs
of customs duty on imports of duty at lower levels, a new levy All these budgetary provisions when
specified commodities while levying called Agriculture Infrastructure read with the three agri-market
a new agriculture infrastructure Development Cess is introduced. reform laws (contract farming,
development cess on such imports. The fund created will boost agri- private markets and liberalization
infrastructure. APMC mandis (usually of ECA) are expected to have a
The agriculture credit target has
under control of State governments) significant positive impact on the
been enhanced by 10% to a new
are eligible to access the fund for farm ecosystem.
high of Rs 16.5 lakh crore for 2021-
augmenting infrastructure facilities.
22 with focus on increasing credit Union Budget 2021-2022 is a
Simultaneously, 1,000 more mandis
flows to animal husbandry, dairy and pro-growth budget coming at a
are to be integrated with e-NAM
fisheries. Higher credit flow will help challenging time for the economy.
(electronic national agricultural
farmers access inputs in time and The key to success is implementation.
market).
boost output. The policymakers need It is critical New Delhi monitors
to ensure that small and marginal The growth of the fisheries sector the implementation of the budget
farmers are able to access and benefit has now been fast-tracked with five proposals and provides the nation
from the enhanced credit availability. major fishing harbours on eastern periodic updates.
Reboot | Reform | Resurge
IMC Journal n January-February 2021
7
Knowledge
India FY 2021/22 Union Budget:
Bold spending plans underpinned
by Shaky Funding Projections
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY
RESEARCH and is NOT a comment on Fitch Ratings’ Credit Ratings. Any comments
or data are solely derived from Fitch Solutions Country Risk & Industry Research and
independent sources. Fitch Ratings analysts do not share data or information with Fitch
Solutions Country Risk & Industry Research.
Key View The Indian central government Wide Deficit To Continue
• We at Fitch Solutions forecast released its FY2021/22 (April – India - Central Government Fiscal
India’s central fiscal deficit to March, FY22) Union Budget on Balance, % of GDP
be 8.0% of GDP in FY2021/22 February 1 2021. Major expenditure
(April – March, FY22), versus areas in FY22 remain on
the government’s 6.8% infrastructure, healthcare, agriculture
projection. and rural development. No major
changes were announced on the
COVER STORY
• Infrastructure, healthcare, revenue front regarding direct tax
agriculture, and rural rates.
development were the main
focus areas for government As we hold a less optimistic forecast
expenditure in FY22. for real GDP growth in FY22 at 9.5%,
against the government’s 11.0% e = Government Revised Estimates,
• With no major changes to projection, this also informs our view f = Fitch Solutions forecast. Source:
revenue-side measures, we for revenue collection to be less than Budget Documents, Fitch Solutions
forecast revenues to come the government had projected for the
in below the government’s fiscal year. Government Raining Cash On
projections, given our real The Economy
GDP growth forecast of 9.5% in As such, we at Fitch Solutions
forecast the FY22 central The central government
FY22, which is less optimistic
deficit forecast to be 8.0% of budgeted expenditures for FY22
versus the government’s 11.0%
GDP, versus the government’s at INR34.8trn, 0.9% above the
expectation.
6.8% projection. Nevertheless, our FY21 revised estimate of INR34.5trn,
• A likely shortfall in projected forecast does reflect our view for and effectively maintaining its high
asset divestment receipts will revenue collection to pick up on the level of spending as per FY21 to
push up the government’s back of an improvement in economic revive growth in the economy
domestic market borrowing activity, this drives our view that the following the pandemic crisis. For
above budgeted levels over the deficit will narrow compared to the context, fiscal expenditures in the
coming quarters. government’s estimated shortfall of revised FY21 estimates were already
9.5% of GDP in FY22. 13.4% more than budget estimates
• We forecast public debt to
GDP to fall to 84.6% in FY22, On the whole, we think that high and 30% higher than actual FY20
from an estimated 86.7% in government spending in the FY22 levels. Our estimate for FY22
FY21, as a recover y in the budget will be very supportive of central government expenditure
GDP level will offset a rise in growth although this also brings the is in line with the government
net borrowing. risk of fueling inflationary pressures. at INR34.7trn. Key spending areas
Reboot | Reform | Resurge
8 IMC Journal n January-February 2021Knowledge
in FY22 remain in infrastructure Of which INR1.1trn will be capital financing of infrastructure investment
(transport, urban, power), healthcare, expenditures for road transport and trusts and real estate investment
e = Government Revised Estimates, f = Fitch Solutions forecast. Source: Budget Documents, Fitch Solutions
agriculture and rural development. highways. The government plans trusts by foreign portfolio investors.
Government Raining Cash On The Economy
to complete 11,000km of national
No Change
The central government budgeted expenditures for To FY22 atExpenditure
INR34.8trn, 0.9% above the FY21 revised estimate of
In other areas of infrastructure
INR34.5trn, and effectively maintaining its high level of spending as per FY21 to revive growth in the economyhighway following corridors by March 2022.
Focus
the pandemic crisis. For context, fiscal expenditures Areas
in the revised FY21 estimates were already 13.4% more than spending, the government has
budget estimates and 30% higher than actual FY20 levels. Our estimate for FY22 central government expenditure Moreover,is it has also planned for
in line with the government India – Budget
at INR34.7trn. Key spendingExpenditures, % (transport, urban,
areas in FY22 remain in infrastructure budgeted INR3trn over a five-
power), healthcare, agriculture and rural development. additional economic corridors such
Of Total year period to reform the power
No Change To Expenditure Focus Areas as the 3500km National Highway
India Ð Budget Expenditures, % Of Total distribution sector. Meanwhile,
works in Tamil Nadu, Kerala, and
INR2trn has been budgeted over five
West Bengal. In urban infrastructure,
years for the government’s existing
over 1000km of metro lines are
under construction in 27 cities, with production-linked incentive scheme
ongoing work on the Kochi Metro to improve the scale and size of key
Railway, Chennai Metro Railway, economic sectors.
Bengaluru Metro Railway, and the INR2.2trn will be allocated towards
Nagpur Metro Railway. spending on health and wellbeing
Source: Budget Documents, Fitch Solutions
Outside budgetary support for capital in FY22, up 137% from the FY21
Source: Budget Documents,
Infrastructure spending was a key focus of the government during the FY22 Union Budget. In particular, capital
spending, the Ministry of Railways
expenditure surged to INR5.54trn in the FY22 budget estimates, up 26% from INR4.39trn in the FY21 revised estimates. budget estimate of INR944bn. Of
Fitch Solutions
Transport and power were key areas identified for capital investment.
will also spend INR1.0trn on existing which, INR746bn will be allocated
Infrastructure spending was a key works on the Western Dedicated towards healthcare. The government
focus of the government during the Freight Corridor (DFC), and Eastern will inject INR641bn over six years
FY22 Union Budget. In particular, DFC, expected to be commissioned into a scheme to develop the capacity
COVER STORY
capital expenditure surged to by June 2022. The government of health systems, strengthen existing
INR5.54trn in the FY22 budget will also set up a Development health institutions, and create new
estimates, up 26% from INR4.39trn Financial Institution to support and institutions. Additionally, INR350bn
in the FY21 revised estimates. manage long-term debt financing will be set aside for Covid-19
Transport and power were key areas for infrastructure projects, and vaccines, with the government ready
identified for capital investment. will capitalise this institution with to provide more funds if required.
A total of INR2.3trn has been INR200bn. Legislation reforms will Meanwhile, the government plans
budgeted for transport spending. also be implemented to allow debt to achieve universal water supply
Reboot | Reform | Resurge
IMC Journal n January-February 2021
9Knowledge
shortfall in asset divestment receipts against budget projections would subsequently imply higher domestic market
borrowing over and above the budgeted INR14.3trn to fund fiscal expenditures for FY22. While this theoretically implies
an upward push on longer-dated bond yields, we think that the central bank will continue to intervene to cap long end
yields, so as to avoid crowding out private sector borrowing.
Set To Fall Slightly In FY22
coverage in all urban local bodies 11.0% projection. There were no India Ð Public Debt (Central And State), % of GDP
and liquid waste management in all changes to direct tax rates nor
Atal Mission for Rejuvenation and major announcements which would
Urban Transformation (AMRUT) have a large impact on direct tax
cities, with an outlay of INR2.8trn collections (accounting for 50% of
over five years. gross tax revenue). Separately, the
budget also announced plans to look
Agriculture and rural development
into and rationalise certain segments
will see a combined expenditure of
of custom duties come October 1 Source: Bloomberg, Fitch Solutions
INR3.4trn in FY22. The government
2021. Source:
Public Debt Levels To Improve Slightly Bloomberg, Fitch Solutions
has increased the allocation for the We forecast public debt to GDP to fall to 84.6% in FY22, from an estimated 86.7% in FY21, as we expect a recovery in the
Rural Infrastructure Development Public Debt L evels To Improve
GDP level to offset the rise in net borrowing. Rising borrowing will inevitably raise the government’s interest burden,
Divestments Likely To which the government projects to be 23% of expenditures in FY22, however, the central bank intervening to cap long-
Fund to INR400bn, from INR300bn Slightly
dated borrowing yields combined with the low interest environment will somewhat aid to slow the pace in which interest
Underperform Projections burden rises.
previously, as well as doubled the
L ooking at how the government We forecast public debt to GDP to fall
Micro Irrigation Fund to INR100bn. This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company
In the plans are also investments to plans to finance its FY22 deficit, to 84.6%
we number 08789939
registration ('FSG'). FSG in FY22,
is an affiliate from
of Fitch an
Ratings Inc. estimated
('Fitch Ratings'). FSG is solely responsible for
the content of this report, without any input from Fitch Ratings. Copyright © 2021 Fitch Solutions Group Limited. © Fitch
develop modern fishing harbours and believe that asset divestments areGroup Limited86.7%
Solutions in FY21, as we expect a
All rights reserved.
seaweed cultivation. That said, the unlikely to come in as high as the recovery in the GDP level to offset
government expects to wind down government’s INR1.7trn projection, the rise in net borrowing. Rising
spending on a rural employment with our estimates at INR400bn, borrowing will inevitably raise the
scheme to INR730bn in FY22 as somewhat similar to the average of government’s interest burden, which
economic activity improves, from previous years. the government projects to be 23%
INR1.1trn in the FY21 revised of expenditures in FY22, however,
This is given persistent challenges
estimates. the central bank intervening to cap
faced by the government in finding
COVER STORY
long-dated borrowing yields combined
buyers for its state assets. A
Reforms And Banking Sector Aid shortfall in asset divestment receipts with the low interest environment
Also Announced against budget projections would will somewhat aid to slow the pace in
In the budget, the government also subsequently imply higher domestic which interest burden rises.
announced that it would relax the market borrowing over and above the This report from Fitch Solutions
foreign direct investment ownership budgeted INR14.3trn to fund fiscal Country Risk & Industry Research
cap in the insurance sector to 74%, expenditures for FY22. While this is a product of Fitch Solutions
from 49% previously, allowing foreign theoretically implies an upward push Group Ltd, UK Company registration
players to have majority control in on longer-dated bond yields, we think number 08789939 (‘FSG’). FSG is an
domestic insurance firms. Regarding that the central bank will continue affiliate of Fitch Ratings Inc. (‘Fitch
the banking sector, public sector to intervene to cap long end yields, Ratings’). FSG is solely responsible
banks will receive recapitalisation so as to avoid crowding out private for the content of this report, without
of INR200bn, while an asset sector borrowing. any input from Fitch Ratings.
reconstruction company will be set Copyright © 2021 Fitch Solutions
Set To Fall Slightly In FY22
up to manage the toxic assets in the Group Limited. © Fitch Solutions
India – Public Debt (Central And
sector. INR15bn will also be allocated Group Limited All rights reserved.
State), % of GDP
towards the use of digital payments.
Funding Projections Shaky
The government projects
revenue collection of INR17.8trn
in FY22, which reflect its
expectation for revenue to recover
by 15% from INR15.5trn in FY21.
By contrast, we are forecasting
revenues of INR16.9trn in FY22,
given our less optimistic real GDP
growth forecast of 9.5% for the
fiscal year versus the government’s
Reboot | Reform | Resurge
10 IMC Journal n January-February 2021Knowledge
Budget 2021-22:
Enhanced focus on digitisation
Geeta Ramrakhiani and Urvashi Agarwal
The Finance Minister presented the (8) Procedural relaxations. (2) No deduction for delayed
Union Budget 2021-22 on 1 February deposit of employee’s
2021. With massive investments (1) Slump exchange and contribution
by the Indian government in depreciation on goodwill Currently, taxpayers claim
digitisation of the tax processes, Slump exchange taxable employees’ contribution
the future of tax compliances lies deposited after the due date
in faceless tax compliances and Currently ‘slump sale’ is
prescribed under the relevant
assessments. The Government of defined to mean transfer of
Acts, but before the filing of
India is working towards introducing one or more undertakings as
the return of income. However,
dynamic jurisdiction to impart a result of sale for a lump
this has been an area of
greater efficiency, transparency and sum consideration without
litigation and various High
accountability, and to also eliminate values being assigned to the
Courts have taken divergent
human inter face to the extent individual assets and liabilities
views in this regard. It is
in such transactions. If the
COVER STORY
technologically feasible. proposed to clarify by insertion
business was transferred for a
While the central theme of the of an Explanation, stating that
non-monetary consideration,
Budget has been digitising most employee’s contribution which
based on favourable judicial
of the tax processes, extension of is deposited after the due date
precedents an argument was
some of the existing incentives was prescribed under the relevant
taken that slump exchange is
inevitable during these testing times. Acts, but before the due date
not taxable. It is now proposed
The Budget also proposed to ease of filing the return of income
to amend the definition of
out some compliance burden and is not allowable as a deduction,
the term ‘slump sale’ so as
rationalise certain provisions in order on the basis that the same has
to include ‘slump exchange’
to avoid long drawn litigations. been deposited before the due
within the term from
date of filing the return of
The key Budget proposals are assessment year (“AY”) 2021-
income. While, the proposed
classified into eight baskets as under: 22 and onwards. In view of
Explanation indicates that the
this, tax implications on the
(1) Slump exchange and clarification is retrospective in
proposed slump exchanges will
depreciation on goodwill; nature but the Memorandum
now need to be reviewed.
explaining the provisions of
(2) No deduction for delayed
Goodwill not to be considered the Finance Bill states that
deposit of employee’s
as a depreciable asset the said amendment will apply
contribution;
from AY 2021-22 and onwards.
Based on favourable tax
(3) Tax incentives;
rulings, taxpayers were able to
(3) Tax incentives
(4) Higher tax withholding for non- claim depreciation on acquired
filers; goodwill as depreciation on Extending incentives for
intangibles. It is proposed that affordable rental housing and
(5) Tax deducted at source
from AY 2021-22, depreciation start-ups
(“TDS”) on purchase of goods;
will no longer be available on The tax holiday period in
(6) Widening the scope of future acquisitions as well relation to affordable housing
equalisation levy (“EQL”); as on goodwill, appearing as developers has been extended
(7) Reducing compliance life cycle; opening written down value in to 31 March 2022. Further,
and the intangible asset block. affordable rental housing
Reboot | Reform | Resurge
IMC Journal n January-February 2021
11Knowledge
project (to be notified) will also from 1 July 2021 as under: credit for purchase of goods,
eligible for 100% tax holiday. whichever is earlier. These
Particulars TDS TCS provisions are not applicable
Deduction towards interest
A. At twice Higher Higher on – (i) transaction which
on loan, taken for purchase
the rate of A or of A or attracts TDS under other
of affordable housing project specified in B or C B provisions of the Act, or (ii)
is proposed to be extended in the relevant TCS under provisions, other
respect of loans that may be provision of than TCS on sale of goods.
sanctioned up to 31 March the Income-
The specified buyer is the one
2022. tax Act, 1961
(“the Act”) whose sales, gross receipts or
Capital gains exemption for turnover from business carried
B. At the rate
incentivising investment in on by him exceeds INR 100
of five percent
start-ups will be extended to million during financial year
C. At twice Not (“FY”) immediately preceding
31 March 2022.
the rate or Appl
the relevant FY .
Exemption for Leave Travel rates in force icable
Concession (“LTC ”) cash
(6) Widening the scope of
scheme
EQL
Specified person is defined to
Cash allowance in lieu of LTC Finance Act, 2020 expanded
mean:
is proposed to be exempt, the scope of EQL provisions so
subject to conditions (to be — A person who has not as to provide that non-resident
prescribed). Some indicative filed return of income ecommerce operators are liable
conditions are as follows: for two immediate years to pay EQL at the rate of 2%
COVER STORY
preceding the year in on consideration received or
a) Employee exercises the
which tax is required be receivable by an ‘ecommerce
option for deemed LTC
deducted/collected; operator’ from provision /
fare in lieu of applicable
facilitation of ‘e-commerce
LTC for the 2018-2021 — Time limit to file return supply or services’. It is now
block; of income under section proposed to clarif y the EQL
b) Expenditure to be 139(1) of the Act, for provisions as under:
incurred from 12 the aforementioned
period has expired; and a) EQL will not apply
October 2020 to 31
on consideration that
March 2021 on goods or — Aggregate of TDS and is chargeable to tax
services liable to GST at TCS exceeds INR as royalty or fees for
12% or above;
50,000 in each of the technical services under
c) Amount of exemption two preceding years; the Act or tax treaties.
shall not exceed lower
A non-resident not having a b) EQL shall be applicable
of - (i) INR 36,000
permanent establishment in on e-commerce supply
per person; or (ii)
India is specifically excluded. or services irrespective
one-third of the above
expenditure; of whether the
(5) TDS on purchase of goods e-commerce operator
d) Payment is through TCS is applicable on sale of owns the goods or
banking channels. goods at the rate of 0.1% w.e.f. provides / facilitates the
1 October 2020. It is now services.
(4) Higher tax withholding for proposed that w.e.f. 1 July c) Income subject to EQL
non-filers 2021, TDS will be applicable will be exempt from
To ensure filing of return on purchase of goods in excess income-tax from 1 April
of income, higher TDS/Tax of INR 5 million, by a specified 2020 onwards.
collected at source (“TCS”) buyer at the rate of 0.10% (5%
rates are proposed in case of in case PAN is not furnished) d) Definition of the term
specified persons with effect at the time of payment or “online sale of goods”
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12 IMC Journal n January-February 2021Knowledge
and “online provision Proposed time limits for completion digital transactions and
of services” is now of regular assessment as applicable also reduce compliance
expanded to include one for AY 2020-21 and AY 2021-22 are burden.
or more of the following as under:
activities taking place
Cases not
online: referred to
Cases refe-
the Transfer
(i) acceptance of offer AY Timeline prescribed rred to the
Pricing
for sale; TPO
Officer
(“TPO”)
(ii) placing the
purchase order; 2020-21 12 months from the end 31 March 31 March 2023
of the relevant AY plus 12 2022
(iii) acceptance of the months in cases which are
purchase order; referred to the TPO
2021-22 9 months from the end of 31 December 31 December
(iv) payment of the relevant AY plus 12 2022 2023
consideration; or months in cases referred
to the TPO
(v) supply of goods
The timelines for reopening
or provision of b) Income of foreign
completed assessment or tax returns
services, partly or institutional investors
which have escaped assessments
wholly. from securities will
is proposed to be reduced from six
COVER STORY
years to three years, if the tax officer be subject to TDS at
(7) Reducing compliance life the rate of 20% or
is in possession of information which
cycle relevant tax treaty rate,
suggests that income chargeable to
In view of the digitisation of tax has escaped assessment. The whichever is lower.
tax processes, the due date for time-limit is proposed to be increased The role of the
submission of tax returns are to 10 years in certain specified cases. government in digitising
proposed to be reduced from
the compliance and
AY 2020-21 as under: (8) Procedural relaxations
litigation procedures is
Particulars Existing due Proposed
a) The turnover threshold commendable. However,
date due date for applicability of tax the process needs to be
Belated return Last date of the T h r e e audit is now proposed evolved over the next
relevant AY (i.e. m o n t h s
Revised return 31 March) before the to be further enhanced few years. Till such
end of the from INR 50 million time, taxpayers will have
relevant
AY (i.e.31 to INR 100 million to go through the mill.
December)
(i.e. Euro 0.56 million It is important that the
The timelines for issuance of notices to Euro 1.13 million) challenges and hardships
for assessments or processing of for the taxpayers who faced by the taxpayers
income tax returns are also proposed carry out 95% of their in the implementation
to be reduced by three months. transactions digitally, of digital compliances
Revised time limits are as under: in order to incentivise is addressed in a timely
and efficient manner.
Particulars Existing due date Proposed due date
Time-limit to process 31 March (i.e. 1 year 31 December (i.e. 9 months Information for the editor for
tax returns from the end of the from the end of the relevant reference purposes only
relevant AY) AY)
Geeta Ramrakhiani is Director with
Notice for selection of 6 months from the 3 months from the end of Deloitte Haskins and Sells LLP and
a case for assessment end of the relevant AY the relevant AY (i.e. 30 June) Urvashi Agarwal is Deputy Manager
(i.e. 30 September)
with Deloitte Haskins and Sells LLP
Reboot | Reform | Resurge
IMC Journal n January-February 2021
13Knowledge
Does the budget have the Midas touch?
Let us see through the Fog with Insight
and Clarity in this recovery of a Century
Anirudh Gupta
CEO & Certified Corporate Director (Institute of Directors) Ashiana Financial Services
Does the budget have the Midas below. 0.50 % depending on the quality of
touch? Let us see through the Fog What do you expect from the the paper in the 2-5 year Category.
with Insight and Clarity in this Budget? The only silver lining is Oil is in a
recovery of a Century. range acceptable to India’s long term
Lower Taxes – 30%
The Budget is a statement of intent. interests, however as the commodity
Better Long term direction – 30% cycle is picking up, it needs to be
It also shows on what priorities
the country’s finances are focused Relief for the needy – 10% watched. This in the past has led to
on. This budget rightly focuses on Better policy making – 30% earnings upgrade especially with the
creation of a stronger health care Infrastructure theme being supported
Basis this as there is no
system and doubles the pace on in a big way by the government.
enhancement of tax slabs our
infrastructure creation particularly research team rates it a 7 out of 10. Every budget leads to creation of an
roadways and also strives to look at opportunity or a change in policy
If you are looking at markets from which leads to creation of that
correcting the imbalances in the
COVER STORY
a business exit point of view then opportunity. Let us examine the key
power sector. The government rightly
maybe you need to keep the tax elements which can have a multiplier
so has considered a good choice of
considerations in mind and you effect
creating assets and is leading from
may need specialized advice there.
the front which has been indicated
However for most part of it all the 1. Bank Recapitalization:
in a conscious stance to increase the
tax rules continue to be the same PSU Banks have been merged
fiscal deficit to 6.5% of GDP for the
for long term and short term capital with the consequence that most of
coming year and a strong medium
gains across asset classes. the bad loans have been provided for.
term approach for asset creation.
Since we have strong reserves this is Is there any change? There could be some opportunities
not likely to impact us as a Country No, not as far as the critical decisions as an Investor from a tactical point
if things go wrong. go. of view. That said most of the PSU
banks are not as well run on return
More importantly it also looks at A question which comes to mind is
ratios as they could be. Therefore we
creating a development financial how will this be funded?
recommend them selectively on a
institution which would have an One way is disinvestment wherein case to case basis.
overall book of 20000 crores with 10 heavy weights like LIC and BPCL
times the ability to leverage deposits. are likely to hit the markets next 2. NBFC Funding:
This is particularly important as financial year. Also 2 Public sector The funding has increased
we seek to emerge out of China’s banks and 1 general insurer will be from 7 lakh crores to 8 lakh crores in
influence in Asia. privatized. Also the vivad se vishwas the last quarter. This is important as
For the bygones in the stressed asset scheme is gaining traction and has many companies are not qualified to
space an asset management company already collected close to 1 lakh take a loan from mainstream banks.
approach is advised which is similar crore.It is also being extended till They rely on NBFC’s for funding
to a bad bank approach. These are Feb 28, therefore a possibility of gaps. This apart from the government
good ideas if done for a limited time higher numbers happening would support is likely to grow as most
frame as it can create a negative help in meeting the enhanced Capital people have parked their savings in
impact on accountability related expenditure numbers. deposits last year from a safety view
issues and create a conflict of interest This already is showing some and Banks will have a higher capacity
issue within Public Sector Banks. strain on government finances and to lend. That said the capex cycle is
Our team did a poll on LinkedIn on the result is increase in interest not expected to start before March
prebudget expectations with a 1000 rates by 0.20% in the short term 2023 which implies that Banks may
plus views, the result we are sharing categor y (upto 2 years) & 0.40- lend to NBFC ’s a bit more. This
Reboot | Reform | Resurge
14 IMC Journal n January-February 2021Knowledge
is so as earlier Banks have burnt utility oriented sector it is a cashcow, Alternatively one could look at
their hands in infrastructure related however till the ground level issues Zero Coupon Bonds which have a
lending wherein they are likely to are sorted this does not appear to be similar taxation effect.
fund housing and other relatively investment worthy.
sure and safe bets. 3. Real Estate
8. Defence
As per numerous studies
3. Affordable Housing In this sector orders are conducted on the sector from time to
The tax holiday has been slower to be executed. Also there time the oversupply for Residential
extended by one year to March are a couple of companies which housing is in the region of 36-60
2022.Investment in housing has operate at scale in this sector. Since
months depending on micro market.
a multiplier effect of 8 from an as an opportunity it is large, most
likely weapons will be procured Considering the fact one needs
employment perspective. This is
from outside India as in many areas to look at it selectively and are likely
likely to address the employment
gap to some degree. Depending upon we lack technology and technology in the region of 8-12% gross returns
fulfillment for housing for all targets transfers come at a steep price basis commodity price rise over a
laid down by the concerned ministry, considering the not so successful period of time.
the extension may happen. Joint Venture Model in this sector
over the years. 4. Alternate Assets
4. Agriculture Alternate assets like Hedge
9. Railways funds can be considered from a cash
Agricultural credit target set
by the Finance Ministry is 16.5 lakh The FM has been generous flow perspective.
crores.This is aimed towards animal in allocations. That said Railways
Any areas in which one may
husbandry, dairies and fisheries. This is more of a social enterprise
need to plan differently?
is likely to provide stimulus to the considering the operating ratios
published by the Government from Two major pointers come to
COVER STORY
economy going forward. In the listed
time to time. mind
space opportunities are relatively less,
however it does affect the broader Given all this what are the options 1. PF: If the PF is above
markets. from an Investment perspective? 250000 per annum, the
amount above that will
5. Infrastructure 1. Equity/Equity Oriented be taxed for interest
opportunities
Zero Coupon Bonds in income.
Infrastructure Investment Trusts India is a good long term
One of our clients
would be good opportunity from an opportunity and needs to be thought
pays 6 lakhs in PF per
investment point of view. These are on those lines. Next Ten-fifteen years
annum.3.5 lakhs is
also efficient from a taxation point of are critical from a growth point of
view for India. additional.
view. Considering the need for funds
for the sector this is a good move. To become a developed nation The interest earned on
the government is taking all steps 3.5 lakhs will attract
6. Roadways and we are on our way to build taxation as per your tax
Despite a tough covid situation growth over a period of time on the slab.
3800 kms of roadways has been back of strong infrastructure spends 2. ULIP’s: Unit Linked
constructed so far for the year. and consumption which increases Insurance plans as
Another 11000 kms are likely to be over a period of time as connectivity they are called will not
completed by March 2022.Cement increases. have a tax free status
companies with lower utilization We can look forward to the if premium is above
levels may be looked at from a next decade for a double digit returns 2.5 lakhs to bring
medium term point of view. from a markets standpoint. parity between Mutual
Funds and Insurance
7. Power 2. Debt Funds
companies.
A revamped reforms-based Commodity prices and a
stretch at the fiscal deficit are Therefore any ULIP’s
result-linked power distribution sector
likely to create conditions of higher purchased after 1.2.2021 need to
scheme will be launched with an
outlay of `3, 05, 984 crores over inflation. This is likely to result in be planned on this basis. It is not
5 years to consider viability. This higher interest rates over a period of applicable to older policies.
is likely to bring the next level of time. A return of 7-7.5% on a post That said, it depends on policy
accountability for a critical sector tax basis can be expected over a 3 execution on the ground. May we
for the country’s progress. Being a year period. choose wisely.
Reboot | Reform | Resurge
IMC Journal n January-February 2021
15Knowledge
Budget 2021 – Setting the Pace
for a Resilient V-shaped Trajectory
CA Minita Khanchandani
The world has endured a year of the The Union Budget 2021-22 was companies and asset management
unexpected onslaught by COVID-19 founded on the 6 pillars – companies would takeover stressed
virus. The virus has posed an assets and manage them to later on
1) Health and Well-being;
unprecedented challenge for policy dispose them to potential buyers.
making, globally and nationally. It has 2) Physical and Financial Capital; While the concept of bad banks by
tested the mettle of policymakers to itself is not new, it is expected to
deal with uncertain, fluid, complex 3) Inclusive Development for
strike a chord specially in this Covid-
and dynamic situations having far- Aspirational India;
ridden environment wherein the
reaching socio-economic implications. 4) Reinvigorating Human Capital; NPAs are likely to go up.
It has also tested the frontiers of
medical science, which rose to the 5) Innovation and R&D; and A number of initiatives on the
challenge by developing an effective corporate law from such as
6) Minimum Government and strengthening the NCLT regime,
vaccine within a year.
Maximum Governance. widening the ambit for small
India has far exceeded its fiscal companies, incentivizing one person
With real estate and infrastructure
deficit target due to higher spending companies and permitting non-
TAX CORNER
being the critical economic engines
to stimulate the economy amidst the residents to set up foreign companies
of the Indian Economy, the present
pandemic and has budget the deficit
emphasis on providing an impetus in India are also on the cards.
at 6.8% of GDP for 2021-22. While
to infrastructure is quite the Decriminalisation of the LLP Act,
the net tax revenues are expected to
highlight. Furthermore, unveiling introduction of alternate methods for
grow at ~14%, the said revenues are
the disinvestment strategy by the debt resolution as well as introduction
not expected out of increase in taxes
government, the anticipated capital of a special framework for MSMEs is
or surcharges, as was anticipated.
inflows are to be on account of the also on the cards.
Further, for curbing the fiscal deficit,
much awaited LIC IPO coupled with
in addition to the capital receipts Moving on from the macro to the
the privatization of various public
of ` 1.75 lakh crores expected from micro front, the key tax proposals
sector banks as well as certain PSUs.
disinvestment proceeds of several were as follows:
public sector undertakings, significant Bringing in certain regulator y
borrowings (about 15 lakh crores) liberalisation so as to amp up the Impetus to affordable housing
are budgeted to be raised, thereby ease of doing business scenario under “Housing for All”
increasing the GDP to borrowing in India was again one of the • In order to incentivize
ratio. noteworthy features. Consolidating affordable housing, make
the securities’ laws into a unified available low cost funds to
Against this backdrop, the Finance
code would address various home buyers and to boost the
Minister presented the Union Budget
interpretational challenges amongst ‘Housing for All’ incentive by
for the year 2021-22
these regulations. Suggesting a
the Government, the Finance
permanent institutional framework
Act, 2020 had introduced a
so as to mobilise the corporate bond
Section 80EEA wherein
market wherein retail investors can
a deduction of up to INR
participate in such issues. Raising
1,50,000 shall be available
the investment limit for foreign
incase of a house property
investments in the insurance sector
the stamp duty value of which
has also garnered positive responses.
does not exceed INR 45 Lakhs
Another upcoming feature is the ‘bad and the time period for the
banks’ wherein asset reconstruction sanction of the loan should be
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16 IMC Journal n January-February 2021You can also read
