Budget 2020: Private Sector To Have Greater Role In Wealth Creation, Says RC Bhargava
Cars are being taxed as if they are sin goods, says Maruti Suzuki’s Bhargava.
Policies such as stake divestment in state-run firms and removal of dividend distribution tax in the hands of companies indicate that the government increased private-sector participation to drive economic growth, according to RC Bhargava.
“We have a clear enunciation from the policy of the government that the private sector is going to play a greater role in wealth creation,” the chairman of Maruti Suzuki India Ltd. told BloombergQuint in an interview. “The divestment policy has become much stronger and foreign inflow is much higher on the agenda with the removal of DDT and exemptions extended to sovereign wealth funds.”
That comes as Finance Minister Nirmala Sitharaman pegged the divestment target at Rs 2.1 lakh crore for 2020-21 during this year’s Union budget speech. The government also announced that it would abolish the dividend distribution tax in the hands of companies—which were required to pay the tax at 15 percent. That, with the addition of surcharge and cess, put the effective rate at 20.56 percent. Now, the dividend receipts will be taxed in the hands of the recipient.
Tax On Cars
Bhargava also said the tax levied on cars waS too high and the industry has been raising this issue for the last 18 months. “There needs to be a recognition that cars are taxed as if they are sin products,” he said. “Unfortunately, it isn’t something the budget will answer but the Goods and Services Tax Council and the various state governments have to look at.”
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