Singapore-based Indian businessmen have welcomed the new Indian government's first budget, saying it gives clear signals on development of infrastructure in railways, roads, ports, housing and smart cities.
The Singapore Indian Chamber of Commerce and Industry (SICCI) praised India's decision to raise the cap on foreign direct investments (FDI) to help the Indian economy.
"Singapore has a role to play in Prime Minister Narendra Modi's government plan to bring urban amenities to rural areas especially the creation of smart cities," SICCI Chairman Doctor R Theyvandran told PTI.
"It is a work in progress budget. It is in the right direction and gives you very clear signals on the development in infrastructure - railways, roads, ports, housing and smart cities," added Girija Pande, executive chairman of Apex Advisors, an investment promotion consultancy based in Singapore.
Plans to develop "smart cities" and liberalisation of FDI limit to 49 per cent for defence and insurance sector will offer more opportunities for Singapore investors to enhance their engagement with India, added Abhijit Ghosh, Partner & India Desk Leader at the PriceWaterhouse Cooper, an international business consultancy.
Setting up a high level Central Board of Direct Taxes committee to review cases related to retrospective taxation and commitment to roll out a unified Goods and Services Tax regime by end of 2014 will help to win back the confidence of foreign investors, Ghosh said.
However, with the announcement to raise the tax to GDP ratio, one can expect stricter enforcement of tax regime which will help to shore up the tax collection, he pointed out.
"On the flip side, considering that a number of Indian companies are expanding overseas, removing the sunset clause for the 15 per cent tax rate applicable on dividends earned from overseas subsidiaries will also go a long way in bringing back foreign exchange into the country," said Ghosh.
But the budget has mentioned nothing on judicial reforms. One hope there will be announcements in due course to strengthen the legal system for speedy judgments and resolution of issues, said SV Padmanabhan, Senior Vice President for Finance at the Singapore-based global commodity group, Olam International limited.
CP Gurnani, Managing Director and Chief Executive Officer of Tech Mahindra, welcomed the Finance Minister's decision to revive Micro Small and Medium Enterprises, calling it a step in the right direction.
"We feel that the only way forward for the IT industry is 'Collaborate, Connect and Co-Create', with the development of smart cities," he said.
But the government should also have pondered over renegotiating tax treaties, facilitating cross border transfer pricing adjustments, for Indian MNCs to penetrate emerging markets in IT, Gurnani felt.
