LIVE BLOG
Economic Times | 03 Feb, 2021 | 03.56PM IST
Union Budget 2021 News: MCA amends definition of small companies
MCA amended the Companies Rules to revise the definition of a small company and to allow non-resident Indians (NRIs) to incorporate one person companies (OPCs) in India.
!1 New UpdateClick here for latest updates
Budget will enhance growth in manufacturing, trade: Commerce Secy
- The commerce secretary said that one primary area of focus is the creation of a robust infrastructure, logistics and utilities environment for the manufacturing sector.
- Some of these measures include a scheme for Mega Investment Textiles Parks (MITRA), which will create world class infrastructure with plug and play facilities to enable the creation of global champions in the sector, benefiting from economies of scale and agglomeration. Seven Textile Parks will be established over three years.
- For the promotion of exports from the agriculture sector, the "Operation Green" scheme of Ministry of Food Processing Industry, which is presently limited to onion, potatoes and tomatoes, has been increased to 22 perishable items. This would promote creation of infrastructure and value addition for horticulture products.
- Streamlining of the ADD / CVD provisions, including measures aimed at enforcing anti-absorption, will potentially enable a level playing for domestic industry through addressing unfair trade practices.
I had expected from the Budget that Govt will provide support to 99% of India's population. But this Budget is that of the 1% population. You snatched away money from people in small & medium industry, workers, farmers, Forces & put it in the pockets of 5-10 people.
- Rahul Gandhi
India's Budget to drive broad economic growth, but fiscal consolidation prospects remain weak: Moody's
Key takeaways for small businesses
- For startups, the tax holiday and capital gain exemption have been extended till March, 2022
- To provide additional benefits to innovators, the restrictions on the paid-up capital and turnover of One Person Companies (OPCs) have been removed
- The director's residency criteria have been reduced from 182 days to 120 days
Budget made a token provision for manufacturing zones. The concept note has been circulated and then it will go to the EFC and then to cabinet. We have made groups of states like coastal states in one category, hilly states in the other. Whichever state offers land and power at lowest power will get the zones. We will provide Rs 500 crore for each zone.
- Power and renewable energy minister RK Singh
Govt to delicense power distribution, push for GST on electricity, says RK Singh
The government will delicense power distribution space to allow multiple suppliers, push afresh for GST on electricity and bring changes in the Electricity Act to set up more benches in Appellate Tribunal for Electricity, power and renewable energy minister RK Singh told ET.
Our constant endeavour is to ensure that a taxpayer feels motivated to voluntarily comply with tax laws and the honest taxpayer gets all facility to which he is entitled to and at the same time the persons who are trying to game the system or trying to take advantage in unfair and undue manner they will also get taken care of.
- CBDT Chairman PC Mody to PTI
Dispute Resolution Committee to have multiple benches, says CBDT chief
The focus on inclusive growth, rural infrastructure, human capital deployment and quality of life would create social equity. So all in all, it is a terrific Budget which takes care of growth, sets the growth cycle in place and also has the right levers to make sure that the growth is inclusive and sustainable.
- Sanjiv Puri, Chairman & MD, ITC and CII Agriculture Chair
This is indeed a visionary, growth-oriented Budget with focus on the six very important pillars to lay the foundation of sustained growth of the economy in future. It is very welcome and there has been an expansion in the fiscal space with a very clear glide path and the quality of expenditure is also commendable.
- Sanjiv Puri, Chairman & MD, ITC and CII Agriculture Chair
MCA amends definition of small companies, allows NRIs to incorporate One Person Companies
- The ministry of corporate affairs amended the Companies Rules to revise the definition of a small company and to allow non-resident Indians to incorporate one person companies in India
- The changes, announced by finance minister Nirmala Sitharaman during her budget speech on Monday, will come into effect from April 1, according to the notifications
The Budget time must not be perceived, unfortunately as was the case, to tinker with rates -- up or down. Every year something or the other used to get done. What is important is the stability of the rates. Once you have brought down tax rates, like one and half years back we brought down the corporate tax rate.
- Finance Secretary Ajay Bhushan Pandey
Developers who operate the asset have been seeking input tax credit on leasing. The government in the budget could have given some direction to the GST council, as operators of any rental asset, be it warehousing or data centres, were seeking this relief.
- Gaurav Karnik, partner and national leader-real estate, EY India
The office space, which has been the most impacted sector due to the work-from-home scenario, could have been recognised in this Budget, a reduction in stamp-duty duty for commercial real estate, offering single-window clearance and reduced GST on leasing would have helped in the market recovery.
- Rajat Johar, country head, Skootr
Proposed duty levy on components to hit Indian handset makers most: Industry
Indian smartphone makers such as Lava and Micromax are likely to be the most affected by the increase in basic customs duty (BCD) on import of mobile phone sub-parts as the move will mostly impact the sub-Rs 10,000 category, as per industry executives and analysts.
Strong nominal GDP growth will be critical in the government's plans to grow its revenues at a clip of 23% next year, and in keeping the debt stock stable at just above 90% of GDP through 2023.
- S&P
Plan to spend $130 billion on defence modernisation in next 7-8 years, said Defence Minister Rajnath Singh
The wider deficits and more gradual pace of consolidation will lift India’s government debt and put more onus on the nominal GDP growth outlook in our assessment of the medium-term debt trajectory, which is core to our view of India’s sovereign rating.
- Jeremy Zook, director, Asia-Pacific sovereigns, Fitch Ratings
The budget's emphasis on capital expenditure marks a noteworthy shift, and higher investment in India's physical infrastructure should help to raise investment potential and competitiveness in the economy over time.
- S&P
Sitharaman's bad bank plan sparks concern
- India’s move this week to set up a bad bank to manage one of the world’s largest piles of soured loans could bring unintended consequences
- Some market participants say they’ll be closely whether it could wind up inflating the price of distressed assets
- This could happen if the creation of the bad bank reduces pressure on loan owners to price such debt at discounts attractive enough to draw other buyers
The budget forecasts wider near-term deficits of 9.5% of GDP in FY21 and 6.8% in FY22 and a more gradual pace of consolidation than we had previously anticipated, reaching 4.5% only by FY26.
- Jeremy Zook, director, Asia-Pacific sovereigns, Fitch Ratings
Reduced GST on leasing would have helped in the market recovery, as per experts
Commercial real estate developers and co-working operators are disappointed by the government’s lack of support for the sector in the Budget announced on Monday.
GoM to decide bare minimum PSUs in strategic sectors, said Tuhin Kanta Pandey, DIPAM secretary
The bare minimum presence of public sector enterprises (PSEs) in strategic sectors – announced by finance minister Nirmala Sitharaman in the budget – will be decided by a group of ministers after consulting ministries in each identified sector, Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey told ET on Tuesday.
Decision to tax PF interest based on the principle of equity, said Ajay Bhushan Pandey, Revenue secretary
The decision to remove the tax exemption on provident fund contributions of ?2.5 lakh and above in the budget was based on the principle of equity, said revenue secretary Ajay Bhushan Pandey.
New central schemes added in rejig, allocation jumps 12.3%
The budget has increased the number of centrally sponsored schemes to 33 from 31 now, adding three new schemes while doing away with one old scheme and replacing one with a new scheme.
Goodwill depreciation out; companies face higher tax outgo
Many companies will have to fork out higher tax on past M&A deals while some may renegotiate valuations of ongoing and future transactions with the budget ending Corporate India’s age-old practice on ‘goodwill’ accounting.
Info-based assessments will help reduce harassment of taxpayers, said PC Mody, CBDT chairman
Assessing officers will be able to begin inquiry based on third party information from audit or agencies, rather than anonymous information, which will reduce harassment of taxpayers and lead to reduced litigation, Central Board of Direct Taxes (CBDT) chairman PC Mody told ET.
