Barring a passing reference, non-resident Indians (NRIs) were largely ignored by India’s finance minister when he tabled the country’s annual budget in Parliament.
India’s Arun Jaitley unveiled a rural-focused budget that seemed to be designed to appease the local masses.
India will see several state elections this year, and most of the budget proposals sought to win back support among rural voters for Prime Minister Narendra Modi's government.
Financial investors gave Jaitley’s budget a cautious thumbs up, with the rupee, bonds and stocks buoyant.
The Indian rupee, which made a lifetime low of Rs18.76 vs Dh1 on Thursday, February 25, 2016, firmed up after the budget proposals and is now trading at Rs18.41 vs Dh1, up more than 1.8 per cent from the pre-budget lows.
In a small sop that will also benefit expats, Jaitley announced an unspecified increase in free baggage allowance for international passengers, and said that filing of baggage will be mandatory only for those carrying dutiable goods.
In addition, NRIs without a PAN (a 10-digit alphanumeric ‘permanent account number’, issued by the country’s income tax department) will not be subjected to higher rate of TDS.
“Non-residents without PAN are currently subjected to a higher rate of TDS.
“Budget 2016 proposes to amend section 206AA of the Income-tax Act so as to provide that TDS shall not be deducted at a higher rate in case of non-residents not having PAN, subject to prescribed condition,” Jaitley said.
More than 22 million Indians live and work outside of India, remitting billions of dollars every year and making India the world’s biggest recipient of overseas remittances.
Below are budget reactions from a cross-section of UAE-based prominent Indians who welcome the proposals saying they’re good for their home country’s long-term future even if there’s not much in them for the overseas Indians.
Dr Azad Moopen, Founder Chairman and Managing Director, Aster DM Healthcare
“The Union Budget for 2016-17 is transformative in nature and is aimed at empowering the rural population and strengthening the 'bottom of the pyramid'.
This will play a key role in fuelling the overall economy and help sustain a growth rate of over 7 per cent, which is a bright spot in a sluggish global economic scenario.
For the healthcare sector, the three major measures announced are aimed largely at the underserved and rural segments of the country, and support the National Health Policy 2015 which advocates healthcare as a fundamental right.
The announcement of Health Protection Scheme which will offer health insurance of up to INR1 lakh per family and INR1.3 lakh for senior citizens, is welcome as this will be in addition to the Rashtriya Swasthya Bima Yojana which currently provides a cover of INR30,000. This, we believe is a significant move towards universal health cover.
The budget will steer us towards a Healthier India with a deft combination of preventive, inclusive and accessible healthcare for all Indians.”
MA Yousuf Ali, Founder, Emke Group
“The Finance Minister has clearly highlighted the growth pillars of the Indian economy in Agriculture, Rural, Social sector, Skills, Ease of Doing Business and Tax and Compliance reforms. I am happy that the government has given stress on ‘Make In India’ by providing tax and duty benefits.
These will go a long way in strengthening the manufacturing capabilities and infrastructure facilities of India.
He added that the focus on agriculture will enhance expenditure on the rural and agriculture sectors which in turn will enhance food security and boost exports.
The three years tax holiday for start-ups is one of the most exciting announcements of this budget.
The next generation of skilled entrepreneurs are our future and this will bring in the much-needed impetus.
Another highlight would be the 100 per cent FDI in food processing business.
This will be news to many international players who are looking to set up business in India and we all must welcome this.
Being a retailer, obviously I am pleased to note that the FM has mentioned about Retail as the largest service sector employer in country and many more jobs opportunities can be created, provided the regulations are simplified.”
Kamal Vachani, Group Director, Al Maya Group and Dubai Chapter of Global Organisation of People of Indian Origin
“Those NRIs who do not have PAN card can submit passport copy or any other documents as proof of residence to avail the low rate TDS and increase in baggage allowance are welcome steps taken by the Finance Minister.
Allocation of Rs35,984 crores will get big boost for Agriculture Sector and focusing on the rural growth will push the business across various industries.
A 100 per cent FDI allowed in food processing industry, where the products are manufactured and then exported out of India will attract more foreign investors in this field.
Registration of company in one day for startups and 100 per cent tax deduction for companies building houses upto 30sqm and also no service tax for building houses up to 60sqm are welcome steps.
First-time home buyers to get additional deduction of Rs50,000 on interest for loan up to Rs35 lakh will give a big relief for the middle class people to construct/buy new homes.”
Sudhesh Giriyan, COO, Xpress Money
“The Union Budget’s focus on education and skill development is a praiseworthy move since it will increase the employability of Indians within the country as well as overseas.
In this context, setting up of the High Education Financing Agency and the allocation for multi-skill training institutes are two significant initiatives.
The budget mentions that in the next three years, one crore youth will be skilled – this could significantly increase the demand for potential Indian migrants.
With the increasing requirement of skilled workforce in the GCC region, especially to the UAE, this initiative of the Government of India could help the Indian migrant workforce with the right kind of job opportunities.”
PK Sajith Kumar, CEO and Managing Director, IBMC International DMCC
“Indian budget for 2016-17 is a growth focused one that gives more confidence level to the domestic and international investors. The NRIs have expressed their concerns about the hike in vehicle prices and green cess for small vehicles.”
K V Shamsudeen, Chairman, Pravasi Bandhu Welfare Trust
“The budget’s focus on agriculture and the target to double farmers’ income before 2022 will have an impetus on making India an economic superpower.
The financial resources and expertise of the overseas Indian community is not utilised by the Government, but the incentives for start-ups and skill development can help the Non Resident Indian entrepreneurs and professionals.”