Union Budget

Striking a balance between growth and sustainability: Ajay Durrani, Covestro India

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The last budget of the current tenure of the Government is expected to be a mix of populist and pragmatic measures. The agro based industries are expected to receive major stimulus with the government’s emphasis on increasing the farmers’ income. However, the Government also needs to support cold chain segment that merits incentives as it would be critical in strengthening the food security initiatives as well as ensure better realization to farmer community.

The rural infrastructure will also be at the centre of focus, and will see an uptick in the budget allocation. At the same time, urban housing is another acute challenge that merits creation of an ecosystem that is based on private-public-partnership model. In the interest of making India an energy saving country, there should also be incentives for building insulation materials, LEDs and solar powered dryers. The mission of building an energy efficient India warrants strong emphasis on initiatives such as UJALA scheme.

In addition, incentivising adoption of insulation technology in construction along with removal of anti-dumping duties on inputs and technology that supports creation of energy efficient buildings and products should find place in the budget. Income tax reforms – especially change in the income tax slabs and rates – that widens the base of tax payers could be a move that might ring well with the people.

Meanwhile, initiatives concerning electric vehicles and those reducing the carbon footprint of the country might find renewed support from in the form of tax sops and probability of a clean energy cess.

In order to push the adoption of automobiles running on cleaner fuels, the government may also pull the plug on vehicles older than 10-15 years. It would be an encouraging step if the Finance Minister also incentivizes use of EVs by further reducing taxes on the allied technology and inputs that support the ecosystem, including lower interest rates on loans, and electricity tariffs for fleet operators.

(Views expressed in this artcile are of Ajay Durrani, Managing Director, Covestro India only)

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