Union Budget 2018: have the NRI’s been forgotten?

The Union Budget had focused on various sectors of the Indian economy; as usual leaving one behind. The NRIs.

This is the story every year. There always have been demands from the Indian community abroad, which remitted more than $65 billion last year making the country the topmost recipient of dollars globally, but hardly anything came their way in this budget, like in the past.

Non-resident Indians (NRI) had expected a customs duty exemption for gold ornaments for up to 50 grams for males and 100 grams for females. The community also wanted a rationalization of 10% import duty on gold.

The NRIs also expected some pension plan and a reduction of GST on property transaction from 12% to 5%.

“From an NRI perspective, the budget does not have anything to write home about. We expected certain tax reforms relating to investments in India, but the business community will be disappointed with the oversight,” Adeeb Ahamed, Managing Director, Lulu Exchange Holdings, and Twenty 14 Holdings told an international news agency.

Dr. Ram Buxani the Chairman of IPL Group too has agreed.

“Taking into consideration that Prime Minister Narendra Modi is visiting UAE in a few days, it was expected that NRI community, whose number exceeds three million in the UAE alone, would have some favorable words in the budget. Regrettably, they remained neglected,” Buxani said.

In 2014, the government came up with a tax for NRIs.

12.3% service tax introduced in 2014 on fees paid by agents for facilitating remittances.

The government levied a 12.36% service tax on fees or commission paid by agents for facilitating remittances, thereby making it a little more expensive for expats to send money back home.

Most of the money that is sent home by the NRIs either gets invested in property, stocks, bonds or gold.

“The major decision that was expected is in the investments by NRI in the real estate, where reduction of GST on property transactions and legal reforms allowing NRI’s to invest in agricultural properties would have been welcome considering that NRI’s have great potential to turn around the Indian property, land and real estate scenario,” Sripriyaa Kumaria, director-general ITEC Middle East and Secretary General, Business Leaders Forum (BLF) said.

Populist stance:

The budget instead kept its focus on rural areas with next general and state elections in mind.

“Keeping in mind the fact that, currently India is the seventh largest economy and looking to reach the fifth position, this is a very encouraging and growth-oriented budget with more emphasis given on rural and infrastructure development,” said Yusuff Ali MA, Chairman of Lulu Group.

100,000,000 Indians will receive health insurance coverage worth Rs 500,000 (Dhs 28,672), among other steps like extending billions to microenterprises.

To woo the rural voters, finance minister Arun Jaitley said the government will work to improve the price realization of farm products, by increasing the minimum support price for farm produce. About 100 million Indians will receive a health insurance of Rs 500,000 (Dhs 28,672), among other steps like extending billions of dollars to microenterprises.

Rs 40,000 tax relief announced by the government for expenses on health.

“This is an excellent pro-farmers pro-rural budget. The budget has given a tax relief up to 40,000 Indian rupees as expenses on health. The budget will act as a further boost to the good environment required for the FDI. We still need to have introduced mandatory health insurance. Women have been taken care in all aspects,” Dr. Sanjay Paithankar, Managing Director of Right Health said.

State elections are due in eight states in Meghalaya, Tripura, Nagaland, Karnataka, Mizoram, Chhattisgarh, Madhya Pradesh and Rajasthan. General elections are due in 2019.

“Government made agriculture the center of the economy because if farmer incomes double and agriculture sector progresses at a fast pace and India will definitely see a boom in the economy. This should have a good impact on the common man and the economy at large. Additionally, the high investment in physical and social infrastructure and digital connectivity will lead to more jobs and income to households,” Rizwan Sajan, founder, and chairman of Danube Group said.

However, for NRIs, the underlying message is simple, according to Sudhesh Giriyan, a chief operating officer at Xpress Money.

“Overall this budget is truly everyone’s budget. While things remain largely unchanged for NRIs around the world, they will still find plenty of reasons to keep investing in India and its growth,” Giriyan said.

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