Budget Expectations 2019: ‘Centre Must Announce Green Cess’

An income-based solution should be given preference over subsidies, says Sameer Kalra of Target Investing.

From farmer income to investment tax, from green cess to digital India – there are many areas that the 2019 interim Budget should focus on, says Sameer Kalra, Founder-President of Target Investing.

The interim Budget will be presented by the Narendra Modi government on 1 February.

Income-Based Solution for Farmers Over Subsidies

According to Kalra, an income-based solution should be given preference as it reaches the farmers’ bank accounts directly rather than choosing subsidies.

“There are sources mentioning sustainable solution being provided to the farmers with expenditure of Rs.70,000 crore to 75,000 crore per year, which is 0.4% of Fiscal Deficit to GDP. I’m in favour of that, especially income-based solution, which goes directly into their bank accounts as compared to subsidy which are inefficient and may or may not go to them.”

Sameer Kalra, founder and president of Target Investing

On Introducing Green Cess

Talking about electric vehicles and tax subsidies, Kalra suggests that the Centre should announce a ‘green cess’.

“World is obsessed with electric vehicles, which are running on mostly two things: coal based power and tax subsidy. Government might announce Green Cess on certain vehicles that will fund this subsidy.”

Sameer Kalra, Founder and President of Target Investing

‘Create More Jobs’

According to Kalra, the Employees' Provident Fund Organisation added 73.5 lakh subscribers in the last 15 months, which does not fulfil the criteria if the number of jobs needed are calculated.

Benefits in textile, aviation and housing would be helpful, he says.

“EPFO added 73.5 lakh subscribers in last 15 months. That’s a good growth but not good if you calculate the jobs needed. For this purpose, I think there would be benefits announced in textile (high labour intensive), aviation (high/medium skilled) and housing (high labour intensive) industries.”

Sameer Kalra, Founder and President of Target Investing

LTCG Relief

Union Minister Arun Jaitley, in his Budget 2018 speech, had proposed taxing long-term capital gains (LTCG) on equities exceeding Rs 1 lakh at 10 percent, in order to address a significant erosion in the tax base, and rake in revenue of Rs 20,000 crore subsequently.

Kalra expects some relief to last year’s proposition.

“I expect government to announce removal of LTCG or some relief as since it has been applied NIFTY has given only 6% return and lowered retail participation.”

Sameer Kalra, Founder and President of Target Investing

Incentives for Digital Payments, Startups

Digital payments and startups are growing among India’s youth, and the Target Investing founder suggests providing incentives for it in the Budget.

“Two avenues which are very high growth, One is Digital Payments by which young generation wants to spend or invest billions rupees and Second is startups by which the young generation wants to make billions of rupees. Here, the government might introduce incentives to help the young generation do both.”

Sameer Kalra, Founder and President of Target Investing

Higher Deductions

With the new year, the Centre had announced 10 percent reservation for economically weaker section of general category and the change of tax slabs is expected in the upcoming Budget.

“In 2004, NDA-1 has proposed changes which would come in regular Budget if they came back in power. NDA-2 might just repeat it by way of higher deductions or just might change the slabs since 10% economic reservation, which is not inline with tax slab.”

Sameer Kalra, Founder and President of Target Investing

On Fiscal Deficit

“Investor world, especially debts, are obsessed by this number as it judges the countries macro by this. In my personal opinion, this really does not matter as we have only 5-7% of total debt owned by FII. And every 0.1% change gives us roughly Rs.18,000 crore to spend.”

Sameer Kalra, Founder and President of Target Investing

This year’s Budget has many expectations tied to it, and it makes it all the more important for the present government right ahead of the Lok Sabha polls.