VIA Taxation & Corporate Law Forum organised a panel discussion on “Recession / Slow Down – Government Booster & Industry” at VIA today.
Eminent panel speakers share their views on the recent steps taken by the Government of India on a slowdown in industry and recession. CA Dr. T S Rawal, an economist one of the panel speakers as well as moderator of the discussion.
He said for good business component – do you think present stimulus announced by Modi Government will revive the slowdown economy? GST Rate could have been a better option as it would have benefited the common masses and would have resulted in increased demand? Fiscal deficit in the coming years will result in an inflationary trend? The biggest beneficiaries of the stimulus package are 0.70% corporate-like RIL, TCS, Infosys etc which are in the 30% tax bracket. Is it a good move? Why the stimulus package announced is so late? Recession has not come overnight. Is it good to announce it, not in the budget but in the middle of the year? Is it a good practice? Money (Dividend) is taken from RBI to give booster of tax cut. It is a wise decision? Sensex rise is showing the bright future for economy? New units will be liable to pay income tax @ 15% as against existing companies @ 22%. Will it not disturb the existing player?
GST: Does it need rationalization? 5 Trillion Economy by 2025 (i.e., 2.50 times of existing economy, or around 18% annual growth) is the vision of PM. Do you think it is feasible with the present Government working & stimulus? What could have been done to make it better?
A onetime effort will not review the economy rather it will be a long term and ongoing process. He further said structural change is needed as industrial demand is very low, however, the service sector is growing faster now. Capacity utilization is poor this results in additional cost without return. The measures are confidence-building measure and the Government has been successful in achieving this result. The government will come out with some other measures including ease of doing business.
CA Rajesh Loya, Direct Tax Consultant said the Government is proactive and is taking timely decisions by announcing the incentive or say Boosters for the economy. The impact of these incentives will be visible in the near future and are such that is will have a very long-standing effect. Also, the corporate tax rate cuts were a very good decision and also relief from MAT is welcomed by trade and industry.
Eminent speaker Anand Sancheti, Managing Director of SMS Group, whose company is dealing with the Government explained about what is a recession and economic contraction. He said this recession is not cyclical rather it is due to structural changes in the governing system. He emphasized that the trade and industry should look into the opportunity created during this slow down process and take full advantage of it. He shared his experience that a company that has seen opportunists during the recession has grown many folds later. Stating that in his personal opinion Government has taken steps for revival of economy however it has given only two boosters in form of 70,000 capitalizations to Bank and 15% extra depreciation on new vehicles, all other announcements are either rollback of previous announcements or changes in government policies.
CA R S Paliwal, Indirect Tax Consultant said keep accounts and look where it is spent. Pro back is with corporates only and not with individuals, that is why GST Rate cuts are not done. He said retail consumption has increased but some industries have seen slow down in the last couple of months. Corporate Tax cut benefit will be available, wherein the saving in plough back in the economy by way of the rate cut, repayment of a loan, creation of employment or say non-reduction of staff.
Venugopal Malu, Director of Malu Electrodes Pvt Ltd said if you will not innovate, you will fail. Information exchange has brought great change and opportunity. He strongly said the Innovation is future. Explaining further he said that look for innovation in products, markets, marketing, consumers, etc. He also said that timely completing statutory Compliances will help you to save time and use time properly. He expressed that the most important is if you will not do – some other will do and get ready for it, either you will perform with some innovation or perish for example companies like Nokia, HMT, etc. who did not innovate with the change in time they perished.
Earlier, Suresh Rathi welcomed Anand Sancheti; Ashok Chandak welcomed Venugopal Malu; O S Bagdia welcomed Dr. T S Rawal; CA Naresh Jakhotia welcomed CA Rajesh Loya and CA Jethalal Rukhiyana welcomed CA R S Paliwal with floral bouquets.
Ashok Chandak, Chairman of VIA Taxation & Corporate Law Forum in his welcome address said to trade, industries, and citizens of the country that to find out whether we need something more from Government. He further said that everyone would agree that last that recessions are the cyclical things and to come out of this recession, there is a need for collecting efforts from all including from the Government.
Suresh Rathi, President – VIA in his opening remarks welcomed the resource persons and said about the reduction in corporate tax, recession, Govt’s efforts. He further stated that whatever suggestions and ideas come out of these discussions will be forwarded to the Government of India in the form of representation.
CA Sachin Jajodia, Convener of VIA Taxation & Corporate Law Forum conducted the program, introduced the galaxy of speakers and CA Naresh Jhakotia proposed a formal vote of thanks. Prominently present were Pravin Tapadia, Past President – VIA; O S Bagdia, former Vice President – VIA; KK Bagdia, M C Jawanjar, Kaushal Mohta, Shilpa Agrawal; representatives from Kapilash Dhatu; Raisoni Group; Truform Products; Solar Industries also largely attended by the industrial fraternity, trade, and professionals.
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