Lawyers say that the recent Union Budget provides many positives for Indian industry, including streamlining of the insolvency process, and an increased outlay on infrastructure.
WHAT WERE THE MOST IMPORTANT ASPECTS OF THE BUDGET FROM THE POINT OF VIEW OF INDIA INC?
Bhavin Gada, partner, Stratage Law Partners
Besides significant proposals for incentivising IFSCs as a global financial hub, the following are the important aspects of the Budget 2022 proposals for India Inc.: (i) Excluding Category I and Category II AIFs regulated under IFSA Act from angel tax provisions; (ii) Providing a mechanism for extending assessments and other proceedings under taxation law made on predecessor entities to successor entities in case of business reorganisations; (iii) Withdrawing lower tax rate of 15 percent applicable to foreign inter-company dividends, making the same taxable at normal corporate tax rates; and (iv) Extension for concessional tax rates for manufacturing companies and the incorporation period for eligible start-ups by a year.
Apart from the abovementioned proposals, another welcome proposal is enabling provisions for the tax authority to reduce demand as per the NCLT’s order in IBC proceedings.
Charandeep Kaur, partner, Trilegal
From the perspective of ease of doing business for India Inc., the government’s continued focus on further streamlining the voluntary liquidation process and timelines is a welcome development. The IBBI was also quick in releasing a discussion paper on proposed amendments to the Voluntary Liquidation Regulations on the budget day itself, which solidifies the government’s intention of prompt actions for ensuring ease of doing business.
The proposal in the budget for amendments to the insolvency code for facilitating cross-border insolvency is also a greatly anticipated development and an important focus area. While the fine print and operational details are awaited, we certainly hope that the new framework would greatly facilitate cross-border insolvency resolution.
Siddharth Srivastava, partner, Khaitan & Co
The Union Government through the budget has reinforced its focus on the infrastructure sector to multiply sustained economic growth. Artificial intelligence, geospatial systems and drones, semiconductor and its eco-system, space economy, genomics and pharmaceuticals, green energy and clean mobility systems were identified as sunrise opportunities.
There was a focus on green bonds as the budget clarified that as part of the government’s overall market borrowings in 2022-23, sovereign green bonds will be issued for mobilising resources for green infrastructure. In terms of investments, roads and railways saw a significant increase, with 100 PM Gati Shakti Cargo terminals proposed to be developed over the next three years.
The budget saw highlights on PPPs, asset monetisation, commencement of activities of the National Bank for Financing Infrastructure and Development (NaBFID) and National Asset Reconstruction Company, and tax concessions for foreign pension.
