Budget expectations 2021
Financial Services
The upcoming Union Budget 2021–22 is likely to be significant in transforming the Indian economy from a US$2.94 trillion to a US$5 trillion economy, as envisioned by the Government of India. Given the current economic impact of COVID-19 and ongoing political tensions with neighbouring countries, budget announcements are also likely to be aimed at pursuing efficient, competitive, and resilient policies to make India stronger amongst global economies, as part of “Atmanirbhar Bharat” (i.e., self-reliant India), formulated by the Hon’ble Prime Minister. Some key budget expectations of the financial services industry have been listed below:
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Top three asks:
- Introduction of robust and transparent policy measures to address governance and operational issues for banks/NBFCs and reduce compliance burden through simplification of procedures.
- Tax rationalisation for foreign bank branches to ensure a level-playing field vis-à-vis Indian banks.
- To achieve parity with life insurance companies, general insurance (including reinsurance) companies should also be provided with lower tax rates and also be exempted from the levy of MAT provisions under the IT Act.