Union Budget 2020-21: Paint makers are seeking for government's move to improve consumer sentiment to boost demand in the upcoming Union Budget on February 1. Finance Minister Nirmala Sitharaman will present Union Budget for financial year 2020-21 on February 1. The second budget of Ms Sitharaman assumes significance as the economic growth fell to 4.5 per cent in the second quarter of financial year, registering slowest pace of growth in more than six years. Meanwhile, the government has forecast annual growth rate of 5 per cent for the current financial year which marks the slowest pace of growth since 2008-09.
Instead of further tax rate cut, the paint makers have sought government to unveil measures to boost demand in the Union Budget.
"With the economy having slowed down over the last one year, the government should take steps to improve consumer sentiments and boost demand through tax incentives and increased spending in the infrastructure sector," Berger Paints managing director and CEO Abhijit Roy said.
Country's largest paint maker Asian Paint's Chief Operating Officer Amit Syngle said it is always "good if there is a tax cut" but the industry is "not hopeful of such a step" from the government. "The government should enable consumers to spend more. It can come through tax breaks and any other forms," Mr Syngle said.
Initially, a 28 per cent Goods and Services Tax (GST) was levied on paints, but after demand from the industry, the government had brought down the GST rate by to 18 per cent in July 2018.
"As a next step to the reduction of the corporate tax rates, we hope for the rationalisation of the direct tax code which would put more disposable money in the pocket of the tax payers. This will help enhancing consumer sentiments, higher consumption and an overall positive multiplier effect on the economy," Mr Roy said.
Roy also sought incentives for individuals to invest in housing and realty sector through more tax benefits. "This should go a long way in boosting consumer confidence and would kick start a positive cycle for all industries related to construction segment," he added.