Factbox: What Indian industries want from the Modi govt's Feb. 1 budget

ICRA

28/01/2021 08:19

By Sethuraman N R
    BENGALURU, Jan 28 (Reuters) - Indian Finance Minister
Nirmala Sitharaman is expected to unveil plans to boost economic
growth when she presents the 2021/2022 federal budget on Feb. 1.
    Corporates and industry lobby groups expect the government
to announce greater spending on healthcare and infrastructure,
as well as tax breaks for the automotive, manufacturing and
tourism industries, reeling from the coronavirus crisis.
    Here is a wishlist from industry leaders:
    
    HEALTHCARE AND PHARMACEUTICALS
    The drugs industry is hoping for incentives to spur more
investment in research and development (R&D), via bigger tax
deductions on R&D spending, said Sudarshan Jain, secretary
general of the Indian Pharmaceutical Alliance.
    Kiran Mazumdar Shaw, chief of Biocon Ltd  BION.NS , hopes
the government will raise healthcare spending to 2.5% of gross
domestic product by fiscal 2025 from about 1% now.
    
    REAL ESTATE AND INFRASTRUCTURE
    The real estate and construction sector, a bellwether for
the Indian economy, is hoping for tax reliefs for home buyers
and regulations curbing a rise in construction costs.
    
    AUTOMOBILE INDUSTRY
    The automobile industry hopes for a roadmap for a recently
announced production-linked incentive scheme and policy on
scrapping of commercial vehicles.
    Toyota Kirloskar, the Indian unit of Toyota Motor Corp
 7203.T , said it was looking forward to support measures for
the manufacture of hybrid electric vehicles and parts.
    
    AVIATION
    The aviation industry is looking for lower taxes on aviation
turbine fuel and levies such as airport charges, parking and
landing and navigation charges, said Moody's India unit, ICRA.
    
    TOURISM AND HOSPITALITY
    The National Restaurant Association of India is hoping for
more liquidity support, with low collateral, and a minimum
moratorium of six months.
    Personal tax breaks for domestic travel would also help,
said Deep Kalra, founder and top official of online booking
website MakeMyTrip Ltd  MMYT.O . 
    
    RETAIL
    Brick-and-mortar retail firms seek a national retail policy,
to help combat the growing popularity of online sellers.
    "Formulation of national retail policy, removing the
distinction between e-commerce and physical retail under one
policy has been spoken about and we hope that this happens in FY
21," said Preet Dhupar, chief financial officer of Ikea India.  
 
    
    BANKING
    The coronavirus brought a slump in lending by banks, and
despite signs the economy is improving, the central bank has
warned that the industry could see bad loans nearly double.
    Some analysts expect the setting up of a so-called "bad
bank", which the government will use to buy bad assets from
state-owned banks. There are also expectations for moves to
recapitalise state-owned banks.
    Public sector banks may need a further 430 billion rupees
($5.9 billion) as capital requirement in the next financial
year, ICRA said.
($1=73.1600 Indian rupees)

 (Additional reporting by Sachin Ravikumar, Chandini Monnappa,
Chris Thomas, Nivedita Bhattacharjee and Anuron Kumar Mitra in
Bengaluru; Aditi Shah and Manoj Kumar in New Delhi, Nupur Anand
in Mumbai; Editing by Clarence Fernandez)
 ((Sethuraman.NR@thomsonreuters.com; (+91 8061822737); Reuters
Messaging: nallur.sethuraman.thomsonreuters.com@reuters.net))