BELAGAVI: Group CFO and MD of Aequs India Rajeev Kaul, an aerospace manufacturing company, said
SEZs
across the country have lot of expectations from forthcoming Union
Budget scheduled on February 29. Aequs has SEZ unit at Hattaragi in Belagavi district.
According to Kaul, SEZ Act launched in 2006 with great expectations was the first giant step towards promoting large-scale industrialisation. But after the MAT and DDT incentives were withdrawn in 2011, it has become difficult for SEZs to attract new units. Restoring fiscal incentives and integrating them with the MIIM (Make in India, Manufacturing) and drop the ‘all or nothing (horizontal) approach’ to tax incentives and adopt smart incentives that are selective and focused - these are desired. This means that the incentives should be linked to priority industries as are covered in the MIIM.
Implementation of the Goods & Services Tax (GST) is one of the areas the government should deliver in 2016-17 with a total exemption of taxes on manufacturing SEZs to optimize the cost of production in India. It is equally important for the removal of the minimum alternate tax (MAT) especially for high capital-intensive manufacturing SEZs. It is also critical for the forthcoming budget to provide 100% tax-exemption from central excise duties. The sunset clause, currently applicable to SEZs should not be invoked as abolishing of tax incentives could hurt exports and creation of the much-needed employment, Kaul opines.
Group CFO of first largest aerospace manufacturing company states, though the government has enhanced the FDI cap from 26% to 49%, in the defence sector, a further increase (of 26%) is desired through private equity and venture capital for the sector to flourish to its full potential. To enable manufacturing sector to flourish in tier II and tier III cities through introduction of high speed trains, establishment of better roads, telecommunication etc are needed.
Kaustubh Nande, country marketing head of ANSYS India said overall there is renewed optimism for 2016 General Budget with the government launching several big programs on ‘Make in India’, ‘Digital India’, ‘Skill India’ and the latest ‘Start-up India’. Aerospace and Defense sector is already opening up and the Budget should accelerate this process to boost defense manufacturing and indigenous R&D further. This is particularly important as the offset policy is being completely rethought and rewritten.
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