Abolishment of DDT will really help the industry, which was earlier facing an effective DDT of 20.35%.
Removal of interest and penalty payment on disputed tax, if paid by 31st March, 2020 and some additional penalty, only if paid till 30th June 2020, is a welcome move, as it will increase the tax receipts for the government and also relieve the taxpayer from the cost of excessive penalties and cost of paperwork.
Creation of an International Bullion Exchange by GIFT CITY will add liquidity and depth to the gold commodity market. There is tremendous value potential to be unlocked from the gold industry in India in terms of it being one of the largest consumers of the precious metal globally and in terms of the finesse of jewellery produced in India, thereby acting as a vast employment generator. As the true value of this gets unlocked by the formation of the bullion exchange, India will gain its rightful place in the global gold markets.
Enablement of rupee derivatives trading at GIFT City, Gujarat is also a welcome decision as it will offer greater credibility, and hence allow the Rupee to find its true value.
Simplification undertaken in the personal tax slabs is a welcome step for the public at large, as it will add real money into their hands and will probably kick start the economy through increased spending by the retail consumers.
Partial sale of stake in LIC is also a welcome step because it will provide monetary inflows to the government, which will help fund reduction in inflows due to tax exemptions and other breaks to the industry. This will hence help the government keep the fiscal deficit within the projected limits. If this is read in conjunction with the government’s efforts for divestment of Air India by offering a 100% management stake sale as well as support in terms of reduction of debt, a positive story emerges in terms of the government being determined to push through the divestment of strategic assets and hence raise resources.
- Abhishek Bansal’s Chairman and Managing Director, Abans Group of Companies.