Post-Budget quote from Managing Director of Volvo India Kamal Bali:
The Indian Union Budget presented by the Finance Minister this morning in Parliament is both progressive & fiscally prudent. It addresses a lot of concerns of many sectors, with focus on reviving economic activity & job creation.
The provisions such as investment allowance, push on infrastructure & manufacturing sectors, increase in FDI in certain sectors, deepening the debt market & advance ruling on transfer pricing, are some of the positive moves that will encourage investment and a regime of predictability on taxation.
Also, of particular significance is the announcement with regard to the mining sector, which has been languishing in the recent past. The planned changes in the MMDR Act will help encourage investment & promote sustainable mining practices.
However, what is a disappointment is the lack of correction in the inverted excise duty structure in the Commercial vehicle sector. The mismatch between the input and the output rates of excise duty has led to huge accumulations of credit in the system, which has had a crippling effect on the cash flows of manufacturers. In the twin contexts of the need to bring state-of-the-art automotive technology into India and the much needed socio-economic imperative of providing impetus to manufacturing in India, this inverted duty structure is becoming a big deterrent. This is making manufacturing of high technology products in India uncompetitive, which will indirectly also encourage the undesirable imports of fully built vehicles. We do hope that the Government will in the near future address this pressing issue.