Budget 2023: A fine balance and much needed boost
Like every year, corporate India discusses threadbare the impact of the Finance Minister’s presentation of the Union Budget. And just like every year it’s a mixed bag of goods, there is much to be said about protecting India’s air from global recessionary doldrums, revving up employment and boosting skills whilst focusing on digital. Something that is gladdening hearts everywhere. Read on to find out more.
Impetus for growth across sectors
The Union Budget 2022-23 will provide an impetus for growth across sectors, that will help the economy revive at an accelerated rate. The measures introduced by the Finance Minister are expected to support domestic capacity creation and boost infrastructure, generating both growth and employment across industries. The overall increase in capital expenditure in line with the ‘Make in India” and “Atmanirbhar Bharat” will also create long-term benefits paving the way for recovery. The development of urban infrastructure in Tier 2 and 3 cities will increase the demand for infrastructure projects, consumer appliances, and HVAC systems. The focus on agriculture and horticulture storage is expected to expand the market, increasing the demand for cold chain and commercial refrigeration. The green growth agenda will help businesses and customers to achieve their vision of a greener tomorrow. The attention on customs duty for AC components and other high-demand consumer durables would help manufacturers reduce the cost of production and thereby increase consumer demand. At Voltas, we look forward to being a part of India’s growth story as it strives for a higher trajectory.
- PRADEEP BAKSHI,
MD & CEO, Voltas Ltd
Focus on green growth
The future of the Indian economy seems bright with the proposed economic growth expected at 7 per cent. With the numerous frameworks proposed in the 2023-24 budget concerning sustainability and green hydrogen, we are confident that the industry will reach new heights. It is expected to control the carbon footprint and reduce the dependency on fossil fuels in curbing the effect of climate change on our planet. The National Green Hydrogen Mission has been included in the government’s top priorities with a focus on green growth. With India moving firmly towards the ‘panchamrit’ and net-zero carbon emission by 2070, we are sure that India will emerge as a leader in the market with this initiative. The investment of ₹19,700 crore in the initiative will drive the country towards its contribution for a future-ready world.
- VIPUL MATHUR,
MD & CEO, Welspun Corp Ltd.
Success depends on implementation of measures announced
I believe Budget 2023 is aimed at boosting the Indian economy and protecting it from the impact of global recessionary pressure through several measures. Some of these measures include increased investment in infrastructure; focus on agriculture and rural development; investment in human capital and reforms to attract foreign investment. What’s more, the Budget 2023 includes measures aimed at incentivising employment generation, particularly in areas of artificial intelligence, machine learning, data analytics, and other emerging technologies. Some of these measures include investment in technology, skill development and encouragement for start-ups. Overall, the Budget 2023 is focused on creating a conducive environment for employment generation, particularly in areas of new and emerging technologies. These measures are aimed at promoting economic growth and helping to address the challenge of unemployment in the country. These are: reforms in the labour market, promoting exports, improving access to finance, and fostering innovation. Ultimately, the success of the Budget 2023 in fueling growth will depend on the implementation and execution of the measures announced, as well as other factors such as global economic conditions and the broader policy environment.
- SACHIN SAXENA,
Larsen
and Toubro, LTI Department, IT Project Manager
Pathway for India to achieve universal health coverage
On the healthcare front, the budget focuses on the opening of 157 new nursing colleges and using existing facilities in select ICMR labs for research by public and private medical facilities. The announcement of dedicated multidisciplinary courses for medical devices in existing institutions to ensure the availability of skilled manpower for futuristic medical technologies and high-end manufacturing will play a pivotal role in strengthening the healthcare sector. We also welcome the mission to eliminate sickle cell anaemia by 2047 which will immensely benefit a large population. The Government’s greater emphasis on R&D, innovation, and results-based financing toward more effective PPP will be beneficial in creating the much-needed shift towards quality and higher value. In view of the G20 Presidency, the announcements provide a strong impetus to strengthen the Indian healthcare ecosystem.
- DR. ASHUTOSH RAGHUVANSHI,
MD & CEO,
Fortis Healthcare Limited
Budget for the auto sector stands well managed
I can confidently say that the overall budget for the auto sector stands well managed and good. There have been several initiatives by the government to utilise a portion of their funds on the scrappage policy. Now, the main challenge that lies ahead is to successfully implement the policy on a large scale, which will directly depend on the involvement of the public at large. If the people take active initiative regarding the same, the sector should see significant progress in the coming days. It is concerning to see a fiscal deficit at 5.9%. This is not a sustainable level of deficit and needs to be addressed. While the announcements made for steel will in all likelihood help the sector, it is unlikely to have a lasting impact. As a long-debated issue, the personal income tax is finally being addressed with a much needed and welcome relief. A move towards fairer taxation of equities and capital gains was expected, and while we haven’t seen any such initiatives yet, there is still hope for a more equitable and efficient taxation system in the near future.
- LALIT KHETAN,
Executive Director and CFO, Ramkrishna Forgings
Oriented to economic growth
The budget 2023 is oriented to economic growth of the country. I am sure that 33% growth in capital expenditure will result in balanced development. This is a smart move since it will help the country achieve its goal of becoming a 5 trillion-dollar economy and a global powerhouse. I believe that the announcement of setting up 100 labs to effectively develop 5G services and the vision to promote Artificial Intelligence in overall industries is a strong step by the government. This will further lead to automation in the industries which will help in propelling India’s growth and promoting smart cities. The union budget 2023 has come up with positive announcements for different sectors to support the Make In India initiative and can result in balanced growth in the near future.
- RAJEEV SHARMA,
Chief Strategy Officer, Mitsubishi Electric India Pvt. Ltd
Comprehensive and inclusive
I feel the budget for 2023 will aid GDP growth and protect India’s economy. India’s economy crossed the $3 trillion-mark last year. As per my research and whatever I have read, in the fiscal year ending March 2023, the economy is expected to grow at a rate of 7%. Come March, the nominal GDP of India will be around USD 3.5 trillion. The budget for 2023 has focused on job creation in many ways. The Machine Learning job market is projected to be worth $31 billion by 2024. The finance minister also announced the launch of Pradhan Mantri Kaushal. Vikas Yojana 4.0. Artificial intelligence has the potential to drastically improve the efficiency of a workplace by augmenting the work humans do. The finance minister also announced the launch of Pradhan Mantri Kaushal Vikas Yojana 4.0 to skill lakhs of youth within the next three years. Overall, the budget seems quite comprehensive and inclusive, with much focus being given to several paramount sectors. I expect the budget for 2023 to help India safeguard itself from any recessionary trends and scares while also ensuring it fulfils the ambitious promises made by the government.
- AASHISHA CHAKRABORTY,
Author
Good news for startups and entrepreneurs
The carry forward of losses for startups to set off against future profits will now be allowed for 10 years instead of 7 years. MSMEs (with turnover of up to Rs. 2 crore) and professionals (with turnover of up to Rs. 50 lakh) can avail the benefit of presumptive taxation. This is definitely good news for startups and entrepreneurs. Startups can now register one year after incorporation and tax liability will come afterwards, this will act as a shot in the arm for early-stage startups. The government has announced to set up of an agriculture accelerator fund to nurture start-ups in rural areas, this is sure to have a positive impact on the economy. The government has announced various incentives for MSMEs, Startups, and startups in the agriculture sector which will fuel growth. I was expecting the government would announce an easier loans facility with better lending rates and more grants to startups.
- TEJAS KULKARNI,
Co-founder, SheWork.in
A mixed bag for the Hospitality sector
The Indian hospitality sector has come to realise and has focused on being more Atmanirbhar than dependent on anything external. The intention of the budget is always to help generate employment and spur industrial and commercial growth but when it comes to the jobs in particular of an IMI data analytics etc. this is more the responsibility of the companies that encourage research development into these areas and that’s where private enterprise plays a very important role. The budget has like, every year, disappointed our industry which is a heavy labour intensive and high capital intensive industry hand supporting and industry such as hours can only further boost the employment generation both directly and indirectly. Hospitality is known to be a force multiplier of the economy and studies show that one direct employment in hospitality leads to 5 indirect employment opportunities and this is seen globally in strong tourism focused countries. I would have hoped more direct support to our Industry but considering the positive sentiments in consumers there is good desire to travel and spend which has kept the industry busy and on its toes.
- VISHAL KAMAT,
Director, Kamat Hotels & Orchid Hotels
This progressive budget will go a long way
The Finance Minister has presented a progressive budget that will go a long way in ensuring India enhances its consumption and contribute to the growth of GDP. On one hand, the ‘last mile’ project aims to raise rural Indians’ disposable incomes, on the other hand ‘Awas Yojana’ will ensure affordable housing. Similarly, the revamping of the Credit Guarantee Scheme will prove to be a great support to the micro, small and medium enterprises (MSME) sector. The vision for Amrit Kaal will ensure that we move towards an empowered, technology-driven, and knowledge-based economy. Small farmers across the country will benefit from the budget due to proposed advancements in aggrotech. The budgetary allocation for the agriculture sector is an estimated Rs 1.25 lakh crore for the 2023-24 financial year. The PM Kisan scheme alone has received an outlay of Rs 60,000. With the finance minister announcing the launch of an agriculture accelerator fund for young entrepreneurs, the agritech industry and startups will get a major boost with the use of modern farm technologies.
- PRIYANKA WADHWA,
Co-owner, Kapila Krishi Udyog Limited & Cofounder,
CommsCredible
Progressive and growth-oriented
The budget is progressive and growth-oriented given the focus on capital expenditure, green mobility, clean energy, and agriculture. It further defines the roadmap for achieving net-zero emissions by 2070. At SKF, we support India’s aspirations of inclusive and sustainable growth, and we remain committed to achieving net-zero emissions across all our production facilities by 2030 and across our supply chain by 2050. We will continue to develop intelligent and clean products and solutions to meet the evolving needs of industries and further support their decarbonization efforts. Further, the budget will also help the Indian economy reap benefits from local manufacturing, infrastructure development, and technology advancements and will firmly position the country on the path to accelerated growth.
- MANISH BHATNAGAR,
MD, SKF India Ltd
We welcome the increased outlay towards energy transition
The Union Budget rightly builds incentives to support low carbon development pathways with the focus on Green Growth among the Saptarishi priorities. Catalyzing sustainable growth in India will r e q u i r e incentives to drive investments in technology and innovation, to ensure that we do not have to make trade-offs between people and planet. We welcome the increased outlay towards energy transition, and particularly for Green Hydrogen and waste-to-energy, which will boost energy independence. The PRANAM scheme and bio-inputs centres shall incentivize adoption of sustainable and regenerative agriculture practices. The Green Credit programme will channel much needed capital to support the transition to a sustainable economy. Concessional duties on Li-ion batteries will provide further boost to the EV sector and help decarbonize the transport and logistics sectors. The measures announced in Budget 2023 will further strengthen India’s position as a global climate leader, and catalyze sustainable, inclusive development.
- ANJALI BANSAL,
Founder, Avaana Capital
Balanced budget; focusing on the Indian growth story
The Indian budget is quite a balanced budget covering many sectors and reaches out to all sections of society. I am really happy to see India aspiring to be a centre of excellence for Artificial Intelligence; climate related initiatives and driving momentum in areas like agriculture, further enhancing reading habits with focus on education and talent. This is necessary and timely. The key will be to see how further momentum is given for manufacturing specifically small and medium sized enterprises i.e. SMEs and the answer to the critical question: will they successfully realign themselves with the future growth areas? Job creation will continue to be a challenge till we don’t see momentum in manufacturing and SMEs. We strongly believe this is an Indian story with one of the largest and finest talent pools to draw from; India will play a leading role in solving some of the major global problems, and Indian startups surely will play a crucial role in this area.
- VINEET PATNI,
TiE Pune President, and Managing Partner, Wepartner Consult LLP
Focus on the green economy
The focus on the green economy not only addresses climate change problems but also provides a favorable environment for startups like those in the water and climate-tech domain to grow and expand. The green initiatives in the budget, such as the reduction of indirect taxes on customs duty for the green economy and the allocation of funds towards the Ministry of Energy, Oil, and Petroleum and the National Green Hydrogen Mission, demonstrate the government’s commitment to supporting the transition towards a greener and more sustainable future. This presents growth opportunities for startups in this field and can help drive their success and expansion in the coming years.
- SWAPNIL SHRIVASTAV,
Co-founder, Uravu Labs
A budget that was on expected lines
The focus was on capital expenditure, especially on the execution and completion of infrastructure-related projects. The budget delivered that. Overall, it was a satisfactory budget on expected lines and is progressive. Happy that the Government didn’t give in to the pressure from the middle class. Though there has been a revision in the income tax slabs for the salaried class, the income tax regime needs a massive change. We need a clear rollout plan toward a simpler, more effective, and inclusive income tax regime. The government is trying to make Section 80C obsolete with the new tax regime. I would have liked a phased rolldown of 80C. Many investors force themselves to save in ELSS and Term insurance. My concern is that under the new tax regime, this may lead to reduced individual savings-80C could have been addressed. Regarding the step towards a PAN card as a KYC, this is the right step forward. As such, Aadhar was linked to a PAN card; with this, the number of documents required for businesses and investing will decrease. As a next step, if a PAN card can be the primary document, it would make onboarding easier for individuals and corporates.
- ANAND K RATHI,
Co-founder, MIRA Money
A good balance between today’s needs and the future’s demand
This is the first Budget of Amrit Kaal, and we believe that this is a budget aimed at fostering growth. Infrastructure and development are among the seven priorities of the Budget 2023. The newly announced one hundred critical t r a n s p o r t infrastructure projects will help the country to ensure energy and food security as these are critical for India as it targets to become the third largest economy in the world in the next 6-8 years. The government has also decided to inject 2.40 lakh crore in railways in order to derive the positive outcome on environment sustainability. The announcement of 100 Labs for developing applications using 5G services will bring in changes across the transport sector including increasingly smart and efficient logistics and improved urban transportation with the implementation of Mobility as a Service (MaaS) platforms. The Budget 2023 has demonstrated a good balance between today’s needs and the future’s demand.
- NIKHIL AGARWAL,
President, CJ Darcl Logistics
Personal income tax rate
The basic exemption amount is increased under the new income tax regime in Budget 2023 from Rs 2.5 lakh to Rs 3 lakh. Additionally, the new tax regime has modified the income tax slabs. According to the proposal, there would be five income tax slabs instead of six in FY 2023–24.
The income tax slabs under the new income tax regime will be as follows:
- Between Rs 0 to Rs 3 lakh - 0% tax rate
- Between Rs 3 to 6 lakh - 5%
- Between Rs 6 to 9 lakh - 10%
- Between Rs 9 lakh to Rs 12 lakh - 15%
- Between Rs 12 lakh to Rs 15 lakh - 20%
- Above Rs 15 lakh above - 30%
Taxes for individuals making Rs 9 lakh a year will only pay Rs 45,000, i.e. five percent of their income and a 25 percent decrease from the Rs 60,000 they were previously paying. Similarly, those making Rs 15 lakh would only have to pay Rs 1.5 lakh, or 10 percent of their income. Currently, they pay a tax of Rs 1,87,500 annually.
This is a fantastic measure that will assist many middle-class and young earners improve their take-home pay, allowing them to invest more and build money for their future. I will advise everyone to use their surplus funds to start a new mutual fund sip or to use this planned saving towards their emergency fund and future security.
- RISHABH PARAKH,
founder of NRP Capitals
Taxpayers have a choice, but they should choose well
While this budget was a mixed bag when looked at in its totality, I am personally not very convinced with the announcement of the non-taxable slab being increased to income upto Rs 7 lakh. Let me explain. On the face of it, it looks like the taxpayer is saving a lot of tax, and in some cases, as long as the person’s taxable income is under Rs 7 lakh, it is actually the case, but in order to avail of this benefit, taxpayers have to move to the new tax regime and forfeit the old one. In my opinion, there is a fundamental concern which comes with that. The old tax regime allowed for several deductions like Housing loan, PPF, tuition fees and life insurance premiums in addition to standard deductions. Now if the taxpayer migrates to the new tax regime, he will not be able to avail of these benefits, as there are no deductions allowed in the new regime, although the slabs have been increased to compensate for it. Most Indians do not have a social security net for their old age, and they mostly live paycheque to paycheque. The old tax regime gave people the motivation to save money and invest in healthcare, insurance and other such measures which will protect them in their old age. But once a taxpayer migrates to the new tax regime, he has no incentive to save and all the incentives to spend. If you look at the US, a lot of blue collar workers live from paycheque to paycheque. This is not the prudent way to manage your finances. India had and even now (through the old tax regime) gives an impetus for taxpayers to save money and invest in their future. I hope this regime continues, and I appreciate that the government has given taxpayers a choice between the regimes. However, since the government has also said that the new tax regime will be the default moving forward, I hope that the government also brings in other policies to encourage Indians to save more and invest in their future as well.
- ROHIT JOSHI,
Head of Marketing Projects, Easol Pvt Ltd founder, CommsCredible
Increase in Capex is the big ticket announcement
I am a salaried employee. The Budget has given provisions for salaried employees to save more tax by raising the tax slabs, but I think that is only part of the picture. The headlines in this budget is the increased spending on Capex. There is a nearly 4-% increase in Capital Expenditure to Rs 10 lakh crore. This is excellent news. In economics, It is well known that a single rupee of investment in capital assets will generate 3 to 4 rupees of increase in GDP. That is how big the multiplier effect it. India is fast becoming the hub of manufacturing, replacing China. What is needed to support this transition is massive improvements in infrastructure, which is being facilitated by the increased capex spending. I have read recently that Apple plans to move 50% of its entire manufacturing to India by 2027. Imagine the amount of jobs this will create. This is the reason the big ticket announcement for this year’s budget is increase in Capex.