Union Budget 2023-24: Various quarters of the Indian economy have laid down their expectations from Finance Minister Nirmala Sitharaman. For example, Indian manufacturers are anticipating a lower GST and relaxation on Custom duty on the import of electronic supplies. Similarly, real estate is seeking some financial support in the Budget. Expectations ranging from change in income tax slabs, GST rates on various services to demands of more funds from various sectors of the economy, have captured the newsroom conversations. Read More
Zaiba Sarang, Co-founder, iThink Logistics, said, “Logistics is one of the most competitive industries in the world, to the point where it is regarded as the foundation upon which all other businesses are built. As a result, when discussing budget allocation, we must recognise how critical it is to not only invest in this sector but also to ensure that our investments are directed toward areas that truly matter. Logistics is one of the unorganised industries, so we should anticipate investments in activities that will make it more organised. PM Gati Shakti, for example, has focused on seamless multimodal connectivity to enable smooth operations. We can anticipate the implementation of the National Logistics Policy, which will reduce the cost of GDP from 14% to single digits. As we all know, logistics is one of the world’s largest carbon-emitting sectors; there has been discussion about investing in making this sector carbon-neutral by using less carbon-emitting fuels, electric scooters, and other similar technologies. On top of that, we can expect Rs 2 lakh crore in investments in port infrastructure to alleviate logistics inefficiencies. Overall, we can predict that 2023 will be the year when the logistics industry reaches its full potential.”
Deval Sanghavi, Partner and Co-Founder of philanthropic organisation Dasra, said, “This is an especially awaited Union Budget as India leads the G20 Presidency, and our inclusive development models will be closely observed. Grassroots NGOs have a critical role to play in extending such development models to vulnerable communities. We hope Budget 2023 will encourage more giving in the country to support NGOs through flexible funding and capacity building. This will enable social leaders on the ground to run their organisations better, serve their communities meaningfully, and drive change at local levels.”
“This is an especially awaited Union Budget as India leads the G20 Presidency, and our inclusive development models will be closely observed. Grassroots NGOs have a critical role to play in extending such development models to vulnerable communities. We hope Budget 2023 will encourage more giving in the country to support NGOs through flexible funding and capacity building. This will enable social leaders on the ground to run their organizations better, serve their communities meaningfully, and drive change at local levels,” Deval Sanghavi, partner and co-founder of Dasra, said.
“As the global economy experiences geopolitical uncertainty, rising inflation and slowing growth, the Budget 2023-24 will play a pivotal role to boost consumption and improve consumer demand. The central government also remains committed to introducing and implementing reforms that will lead to ease of doing business, with a focus on encouraging investments to promote make in India and Atmanirbhar Bharat. Our expectation from the budget 23-24 is that government should consider streamlining tax rates on televisions (TVs). They are no longer ‘luxury goods’, but have become essential items for daily life,” said Sagar Gupta, director of Ekkaa Electronics.
Gupta added that reducing the tax cap from 28 per cent to 18 per cent would offset price pressures, boost demand for TVs (105cm and above), improve consumer affordability, attract investment in component manufacturing, Helps support deeper market penetration. For manufacturers, reforms such as the Production Linked Incentive (PLI) program demonstrate the government’s intention to promote healthy backward integration and boost domestic manufacturing while strengthening India’s position as a global manufacturing hub.
“During the past six years, DPIIT recognised over 84,000 entities under the Start Up scheme and have generated employment to over 0.86 million people within India. The current scheme offers many benefits but still entrepreneurs face a lot of practical issues. To extend further support to the Start Up community, Union Budget 2023 should consider extending the period of ‘Tax Exemption’ from 3 years to 5 years without limiting the number of years within which the exemption can be availed / claimed by a start-up. Currently, the start-ups are not able to avail this benefit which is evident from the fact that only 993+ businesses out of over 84,000 businesses have availed the benefit,” said Sandeep Agrawal, director and co-founder of Teamlease Regtech.
He added that the government will consider “Quarterly” payments of GST Liability instead of “Monthly” payments. This will support Start Ups in managing their day-to-day cashflow struggle which is aggravated due to statutory requirements related to payments for GST on a month-on-month basis. “Being an indirect tax, businesses need to collect GST from customers and pay to regulators, but unfortunately due to delays in receipt of outstanding from customers, GST liability is borne by entrepreneurs from their pockets.”
Manoj Shastrula, CEO and founder of SOCLY.io, said, “At the outset of the Global Financial scenario, SMEs are in fear about funding and revenue and are looking towards the Budget. Reduced GST and tax slabs for Startups, and the introduction of an instrument like Venture Debt Capital will be some master moves that can help a great deal.”
“The Union Budget is an opportunity to introduce new reforms for the betterment of the citizens and the nation at large. As the life insurance sector, our paramount interest has always been to insure more citizens and ensure they have the apt coverage. Towards this, our collective initiatives will be augmented if the government may introduce a separate tax deduction limit exclusively for life insurance premiums paid. Furthermore, we’d also request that the government brings life insurance Annuity or Pension products at par with NPS, especially from a tax deduction point of view. This, we believe, will help citizens plan for regular income during their retired years, in an effective manner,” said Tarun Chugh, MD&CEO, Bajaj Allianz Life Insurance.
“The gems and jewellery sector plays a significant role in India’s GDP and employment generation. Last year, the economy made a strong resurgence from the pandemic induced uncertainty and the jewellery industry too made a strong bounce back with a significant growth. Several positive steps taken by the government including reduction of customs duty on cut and polished diamonds further accelerated this upward growth trajectory,” Amit Pratihari, vice-president of diamond Jewellery brand De Beers Forevermark.
Pratihari added that though the rising inflation have put the market overview in a ‘wait and watch’ mode now, the positive shift in consumer buying behaviour will have a significant influence on the jewellery demand. Clients are now drawn to making purchases that are valuable, meaningful and that lasts forever. “In this view, we are optimistic that the forthcoming budget will have a favorable result.”
“A crucial step for increasing the uptake of CBDC in the payments ecosystem will be to lay down strong regulatory and compliance measures that address user privacy and data protection. Another key measure is improving the user experience, the existing payments infrastructure and accessibility to the internet across semi-urban and rural India. Players from different sectors must join hands to build a low-cost infrastructure and enhance the user journeys,” said Adelia Castelino, co-founder and managing director of In-Solutions Global Ltd.
“The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme has been instrumental in extending microfinance to underserved segments and decreasing the credit gap. NBFCs are hopeful that the guarantee cover under the CGTMSE scheme will be restored to 75 per cent since it was reduced to 50 per cent earlier. In addition, more efficient guidelines are needed for the Emergency Credit Line Guarantee Scheme (ECLGS) as it plays a crucial role in preventing loans from slipping into non-performing assets (NPAs),” said Vikas Singh, CEO and co-founder of Sugmya Finance.
“The insurance regulator along with the government has taken some significant steps over the past year with a view to enhance insurance penetration across the country. In the upcoming Budget, the government should look at offering GST credit to small- and medium-sized businesses that sponsor the cost of insurance and wellness for their employees. This will further boost and motivate SME employers to provide adequate healthcare to their employees and in turn, reduce the burden on the government to provide the necessary healthcare to the country’s missing middle,” Yogesh Agarwal, founder and CEO of Onsurity, said.
He added that health and wellness have a direct impact on productivity and loyalty which in turn influences the country’s GDP. Additionally, the government should also review the skyrocketing medical inflation and its impact on low-income households due to high out-of-pocket expenses.
Atul Monga, CEO and founder of BASIC Home loan, said, “The home loan/ real estate sector is an important part of the Indian economy and is facing some challenging times due to the rising interest rates. Increasing interest rates can have a major impact on the home loan and real estate sectors, making affordability a major concern for buyers. The government needs to take steps such as hiking the tax rebate on housing loan interest under Section 24 (b) to Rs 5 lakh. Also, the current price band of Rs 45 lakh for a property to be considered under affordable housing is not appropriate in most of the cities in India, it should be increased to Rs 75 lakh or more.”
He added that the current GST structure for under-construction and affordable housing creates an additional burden on developers, leading to a higher cost of properties for buyers. This leads to a higher price of a house because the GST on steel and cement is 18% and 28%, respectively and developers cannot claim tax credits for GST paid on input items.
“To reduce this burden and increase the affordability of properties, the government can consider restoring Input Tax Credit (ITC) in the upcoming budget. Further, capping GST at 1% for under-construction projects and reducing raw material costs such as cement and steel can help encourage more people to buy affordable homes,” Monga said.
Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com & Makaan.com, said, “There is a strong case for interest subsidy to first-time homebuyers as this will boost sales in the real estate sector, which is not only the second biggest employer in the country but also creates demand for two hundred other industries including cement and steel. The Finance Minister should also consider the industry’s long-pending demand for an increase in tax incentives for both principal and interest paid on home loans by borrowers. There is also a need to enhance the corpus of the stress fund SWAMIH from Rs. 15000 crore to at least Rs 50,000 crore to ensure that more stalled projects get completed. This will go a long way in rebuilding the trust of homebuyers in the residential real estate market.”
Indian markets experienced a sharp fall on January F&O expiry day. There is no trigger, but the market is looking nervous ahead of the Union budget. The market is following last year’s pattern because, in 2022, the Nifty saw a doji candle (which indicates a range-bound move) in the second and third weeks of January, followed by a sharp fall in the final week of January. However, that sell-off was a buying opportunity because then we saw a sharp post-budget rally. So, as per the template, we can expect a post-budget rally in the market. Technically, Nifty is near the critical support level of 17800, and if it falls below this, then 17625 and 17425 are the next support levels. On the upside, 18200 is a critical hurdle; above this, we can expect a rally toward 18500 and 18650 levels. – Santosh Meena, Head of Research, Swastika Investmart
Devanshu Bansal, Director, UK Realty, said, “The Indian residential market sales have been at a decade high in 2022 and to continue this growth momentum, the sector will need some financial support in the upcoming Budget 2023. In the budget, it is imperative to update the affordable housing policy by revising the price capping so that it can be in sync with the market dynamics of different cities. This move will also enable more homes to qualify for affordable housing. Currently, the unit size is 60 sq.m carpet area, which is suitable. However, the price range of up to Rs. 45 Lakh under affordable housing across India’s metro cities such as Mumbai is definitely something that needs to be brought into focus, where an upward range of Rs.85 Lakh or more seems more appropriate.”
Yogesh Agarwal, Founder and CEO, Onsurity, said, “In the upcoming Budget, the government should look at offering GST credit to small and medium-sized businesses that sponsor the cost of insurance and wellness for their employees. This will further boost and motivate SME employers to provide adequate healthcare to their employees and in turn, reduce the burden on the government to provide the necessary healthcare to the country’s missing middle.”
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Rajat Goel, co-founder and CEO, Eye-Q Super speciality Eye Hospitals, said, “To commit to a greater push to make eye care services an essential component of universal health coverage and tackle the skyrocketing impact of vision loss on sustainable development, the union Budget 2023 must come up with new mechanisms and initiatives for large-scale eye screening and testing. Following the Covid-19 pandemic, India is confronted with a mountain of backlog due to a steep decline in the number of eye surgery, particularly in rural areas. So we also anticipate initiatives and government support to assist eye-care chains in clearing the backlog. Moreover, lowering GST and other import taxes should be prioritised in order to make health insurance and eye-care equipment more affordable.”
A customary Halwa ceremony will be performed before the “lock-in” process of officials involved in Budget preparation in the presence of Union Finance & Corporate Affairs Minister Nirmala Sitharaman tomorrow.
The ceremony marks the final stage of preparing the Union Budget. The Finance Minister begins the ceremony by stirring the Halwa in the Kadhai and then serves it to their colleagues at the Ministry’s headquarters in Delhi, news agency ANI reported. Know what is Halwa ceremony
JB Singh, Director, MOVIN Express Ltd., said, “The national logistics policy has made tremendous progress in utilising platformisation and the power of digital transformation to dismantle industry silos. It is anticipated that the upcoming union budget will advance it by strengthening the framework for its successful execution and lowering logistics costs. We believe that this budget will successfully strike a careful balance between the need for economic development and inflationary worries. Additionally, there will be a big push in digital technology to streamline the customer interface for the logistics industry.”
Preekshit Gupta, Vice President. APAC & MEA, Bureau, said, “The Indian identity verification and fraud prevention industry is on the cusp of exponential growth, and we hope that the upcoming budget will be a catalyst for this growth. Regulatory and policy reforms such as the enactment of the Data Protection Bill and setting up a solid and effective data protection authority will ensure a conducive environment for the sector to thrive. We also expect the budget to provide financial incentives to boost innovation and encourage entrepreneurs to adopt risk orchestration solutions to tackle problems such as fraud prevention, data security, KYC compliance, and identity theft.”
Finance minister Nirmala Sitharaman will present her final Union Budget on 1 February 2023, before the general elections scheduled to be in 2024. This Budget 2023 is being projected as a differential Budget, being the first post-pandemic Budget and also the last full-year budget ahead of the aforesaid Lok Sabha elections. While tax collections have been robust this financial year to cushion revenues and projections, the forthcoming Budget in its proclamations, will also have to take into consideration the significant challenges predicted for the Indian economy, due to global economic downturns, emergence of fears of global recession, and geo-political concerns like the Russia – Ukraine crisis.
Experts expect higher infra spending, the budget to enhance the disposable income of middle-class households, and list what the key priorities should be for the government in the upcoming budget.Budget 2023 may see India stepping up on capex with a major thrust on Gati Shakti and National Infrastructure Pipeline (NIP) targets and National Infrastructure Pipeline (NIP) targets. Nirmala Sitharaman’s last full Budget before elections, may also have dedicated
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