The much-awaited 2015-16 Union Budget, announced by Finance Minister Arun Jaitley, may not have unleashed far-reaching reforms but seems to be a wide-ranging and inclusive budget.
Among key concerns of franchisors which they looked forward with bated breath is Goods Service Tax (GST). Though the FM has put an end to the speculation on when GST will finally be a reality but entrepreneurs will have to wait little more. Jaitley has declared that GST will be put in place as a state of art indirect tax system by April 1, 2016.
The NDA government has also focused on entrepreneurship and job creators with the FM promising Rs 1,000 crore corpus for putting a mechanism to facilitate startups. Franchising industry and business associations seemed excited over the budget but feel that more should have been done.
Vaibhav Singhal, MD and CEO, Savemax Wholesale said, “It is a progressive and well-balanced budget that will lay the foundation of major structural changes in the Indian economy in the coming years. The hike in individual tax exemption is a welcome step that will give more money in the hands of people.”
Adding to this, Neelu Singh, COO, Ezeego1.com, commented, “We are happy with the thrust on domestic and inbound tourism by developing key tourist destinations and sites and making them more tourist-friendly, such as world heritage sites of old Goa, Hampi, Elephanta caves, Leh Palace and Varanasi temple town. It will help draw a lot of heritage and religious tourists. The government has highlighted the desire to incentivise cashless transactions which is a positive development for online sites such as Ezeego1.com. With individual tax payers getting tax benefit up to income of Rs 4.44 lakh, disposable income will increase, which is likely to indirectly induce leisure tourism.”
Welcoming the allocation of Rs 20,000 crore through Micro Units Development Refinance Agency (MUDRA) Bank for the SME sector in the Union Budget, 2015, Dalip Sharma, Director, PHD Chamber of Commerce and industry, said, “This shall not only enhance the much required credit facility to the MSMEs but thereby boost the growth of small businesses and manufacturing units also. The Rs 1000 crore allocation for support of start-ups, shall help harness India’s demographic dividend as well.”
On the other hand, Vinod Kapoor, Business Associate, Titan Company Limited, found it a mixed kind of budget. “Announcements like service tax being raised from 12.3 to 14 percent and quoting of Pan Number made compulsory for transactions more than Rs 1 lakh will have an effect on service sector franchise. For GST, we will have to wait for one more year. However, slew of other measures declared by the FM, will help in curtailing corruption and black money,” he added.
Reacting on the budget, Harkirat Singh, Managing Director, Aero Club (Woodland Shoes), felt, "Overall, the budget seems to be focused and positive and should give us a a healthy ground to grow the business as well as the economy. As a leather footwear brand, we welcome the excise reduction in leather-upper based footwear falling in the MRP bracket of Rs 1000 and above. However, we were anticipating full reduction in-line with the Make-in-India campaign. To add, even the reduction of Corporate Tax is a welcome move though a marginal one. Increase in the service tax is one of the key and probably the only low of this budget. However, the futuristic notification of implementation of GST would negate that but at the current moment, increase in Service Tax is indeed an unwelcome move.”
The franchising industry as a whole wants to get recognised as a separate industry like other major countries of the world. As per recent reports, the Indian franchise industry is estimated at $24 billion with a healthy year-on-year growth of 30 per cent. Its size is estimated to reach $35 billion by 2020.
The industry provides job opportunities to a large pool of unemployed people across the globe, thus those in the trade feel recognising it as a separate industry will give a boost to the business and open more job avenues, which has also been Prime Minister Narendra Modi’s agenda.