Sensible, Credible, Growth-Oriented Budget Etc., Etc.,
BizNewsConnect presents a kaleidoscope of opinions on the pre-election Budget presented by FM Nirmala Sitharaman
ASHISH BAGADIA, Partner – Corporate Finance and Investment Banking, BDO India: This Budget has primarily focused on reducing the battery cell cost from the Electric Vehicle industry perspective. While the FM has allowed concessional custom duty of 5% on battery cells for another financial year, she has waived the custom duty on import of capital goods/machinery for manufacturing of Lithium-ion cells which is aimed at encouraging domestic manufacturing of cells in the medium term. This is a very positive and effective approach towards bringing down the overall life cycle cost of EVs. The industry was expecting a lot more from the FM, but given the balancing act approach adopted by her, some of the other policy supports for EV industry may have to wait for some time.
Vikas Jain, Co-Founder, PLAY Design Labs: A very sensible budget presentation and the FM has been considerate to the common man and industry alike. There is massive commitment of job creation and infrastructure spending which is very well received for India. Modification to the income tax slabs is a delight for the citizens and should encourage more citizens to declare their income statement. Most the industry is well taken care of and focus on strengthening manufacturing is evident. We hope to see some focus and action on the “cost of capital” in future budgets and themes. Backing manufacturing by incentivizing R&D/Design could have been a great addition and we remain hopeful for outlay for design in the forthcoming edition.
Varun Khurana, Founder & CEO of Otipy: It is encouraging to see the government’s focus on agriculture, specifically setting up an agri accelerator fund for agri startups. This will accelerate the pace of innovation in a sector which is India’s biggest in the context of the employment it generates. The Government’s commitment to set up digital public infrastructure for agriculture will help the agritech startups to connect with more farmers and in turn enable them to realize better value for their produce.
In addition to above measures, the plan to set up massive decentralized storage capacity will go a long way in helping the farmers by not only providing a respite from post-harvest loss but will act as a booster to increase the returns for them.
Dhawal Dalal, CIO – Fixed Income, Edelweiss MF: Building on theme of “continuation, consolidation and credibility”, the finance minister delivered her 5th Union Budget today with clear focus on capex-led growth while maintaining fiscal prudence.
A 33-percent jump in capex to Rs. 10 trillion in FY24 will create multiplier effect on economic activities and support additional jobs. Higher allocation for Indian Railways will continue modernization of the key infrastructure and heavy industries. Extension of 50-year interest-free loan to States by one more year while linking it to capex will support infrastructure development.
Market participants rejoiced the conservative estimates in the Union Budget with no fine print or hidden negatives. There was something positive for every strata of the society. Broadening of personal tax slabs and nudge for the New Tax Regime is aimed at higher savings which may support personal consumption.
FY24 nominal GDP is assumed to grow at 10.5%, which is quite credible. Increase in FY24 net tax receipts at 11.5% suggests modest tax buoyancy. Fiscal deficit is expected to contract by 50 bp to 5.9% of GDP with aim to bring it below 4.5% of GDP by FY26.
Bond and equity markets rebounded sharply after the announcement. For bond market, FY24 net borrowing of Rs. 11.8 trillion and gross borrowing of Rs. 15.4 trillion was on the lower side of market estimates. This should keep benchmark bond yields from rising, in our view. We expect benchmark 10Y sovereign bond yield to trade between 7.25% and 7.5% in the near-term.
Vinit Garg, Founder & CEO, Mylo: Measures such as the extension of the tax benefit eligibility to startups incorporated before April 1, 2024, show a commitment to creating a more favourable environment for startups, enabling us to take bigger risks, innovate, and contribute to the economic development of the country. The government’s commitment to creating a supportive environment for startups is crucial in establishing India as a global hub for innovation and entrepreneurship.
Vikas Jain, Co-Founder, PLAY Design Labs: A very sensible budget presentation and the FM has been considerate to the common man and industry alike. There is massive commitment of job creation and infrastructure spending which is very well received for India. Modification to the income tax slabs is a delight for the citizens and should encourage more citizens to declare their income statement. Most the industry is well taken care of and focus on strengthening manufacturing is evident. We hope to see some focus and action on the “cost of capital” in future budgets and themes. Backing manufacturing by incentivizing R&D/Design could have been a great addition and we remain hopeful for outlay for design in the forthcoming edition.
Nikhil Mathur, Managing Director India & Head of Data Partnership & Innovation-APAC at GfK: “The budget for 2023-24 has struck the right chords and is balanced. The massive push for capital investment and spending augurs well across industries as it shall lead to increased job creation. With the new tax slabs, there is an expectation of increased disposable income and consumer purchasing power which will have a positive impact on the retail sector. The reduction in customs duties for mobile phone manufacturing inputs and television along with the continuation of existing import sops will build more momentum in domestic manufacturing capacity. Going forward, we expect companies in the consumer tech sector to benefit from the progressive measures announced today. Overall, a budget focused on delivery.”
Dr Saundarya Rajesh, Founder – President, Avtar Group: The Union Budget 2023 has covered the cohorts such as indigenous tribes, youth, MSME’s, women and senior citizens with a potentially impactful list of benefits being offered to them. The sustainable city program is an applaudable move for it is one of the key inclusion measures required to increase women’s workforce participation. When there is a focus on capital expenditure spending on infrastructure, it is bound to have a ripple effect on women’s employment.
Manish Raj Singhania, FADA president: The Modi Government’s last full budget has been populist in all aspects as it will help boost Auto Sales all around.
While the capital outlay of Rs 10 Lakh Cr in infra spending will definitely aid CV sales, the aim to scrap all old government vehicles by aiding State Governments will boost all segment sales.
Apart from this, the reduction in individual tax slabs will benefit the ailing entry level 2W and PV segment. Reduction in highest tax surcharge from 37% to 25% will also benefit luxury vehicle sales. With focus on Electrification, relaxation on import duties of Lithium ion batteries will help in price reduction of EVs, thus make it affordable for the masses.
On business front, being part of the MSME universe, cost of credit guarantee will reduce by 1% thus helping Auto Dealers in raising funds. The budget has also focussed on ease of doing business by reducing more then 39K compliances and enabling entity level digilocker for storing and sharing documents.
Ramanujam Komanduri, Country Manager, Pure Storage India The Union Budget presented by the Finance Minister is growth-oriented and inclusive. The impetus for the ‘Digital India’ vision is clear from budgetary allocations across sectors like infrastructure, skill development, sustainability, MSME, and entrepreneurship.
This budget provides numerous growth opportunities for the technology industry by bringing digital solutions and innovation in legacy sectors like infrastructure, manufacturing, education, railways, healthcare, financial services, and regulatory bodies to turn India into a technology-driven, knowledge-based economy. Also commendable is a clear intent and investment in making India a net zero carbon emission country by 2070 through National Green Hydrogen Mission.
Overall, the budget 2023 promises to sustain and catalyze India’s economic and digital growth with a strong role played by technology.
Mahesh Krishnamoorthy, Managing Director at Core Integra: As expected from the last full budget before Elections, the FM has announced aggressive growth plans through the budget. It is encouraging to see the projected growth target at 7% with the Indian economy poised to continue the growth momentum as seen over the last 10 years. The initiatives to promote the Agriculture, MSME, Tourism sectors along with focus on job creation is a welcome. It is also nice to note the Governments continued focus on ease of doing business, simplifying compliances and making the legal framework friendlier towards start-ups and entrepreneurs. Unified KYC process with control in the hands of the filer looks to be a first step towards data privacy and user-controlled information governance, definitely a positive move. On the personal income tax side, it is indeed appreciated on the steps taken to increase minimum taxable slabs, reduce tax slabs and tax rates, simplify the tax structure with reduction in highest tax rates along with making the new tax regime as the default one.
It is highly commendable to note that income tax refunds are processed within 24 hours to 16 days, which is probably for the first time in the history of our country. While the initiatives and benefits may cause a dent on the tax collection, I am sure that it would increase the tax base with increased transparency through digitalization. Last but not the least, the 7 point priority definition made the entire budget more structured and process oriented. Overall, a well presented budget and look forward to continued growth of the Indian economy and a rising star in the global arena.
Shachindra Nath, Vice Chairman and Managing Director, U GRO Capital The demand of NBFCs from the finance minister was to advance hassle-free credit access and the government has given a much-needed boost to the MSME sector. An allocation of Rs. 9,000 crore for the credit guarantee revamp scheme starting April 1, 2023 will give a big relief to MSMEs in the current inflationary conditions. Presumptive taxation for micro-enterprises with a turnover of Rs. 2 crores, unified filing process, entity-based Digi lockers, and formation of National Financial Information Registry will enable better underwriting of credit to MSMEs. It will help Datatech NBFCs like us bridge the needs of India’s credit-starved business segment. The government has provided the financial sector much-needed momentum, however an active liquidity support system for NBFCs still remains a request.
Shekar Sivasubramanian, CEO, Wadhwani AI: The Government of India is embracing AI technology to bring about positive change and improving the lives and livelihoods of farmers nationwide through public-private partnerships, extension services, and market linkages. The use of AI and other digital technologies will play a key role in bringing about sustainable growth and greater prosperity for all in the agriculture sector and other sections of the population.
At the Wadhwani Institute for Artificial Intelligence, our work is, and will continue to be, homegrown. We are deeply embedded into meaningful government ecosystems to uncover problems, design solutions and rapidly deploy solutions that reach the beneficiary directly, in the context of India. The emphasis that the government has placed on Making AI in India directly aligns with the work we are doing. We are committed to making AI in India, for India, and have a number of AI solutions in development, across healthcare, agriculture, and education, that can significantly impact the lives of underserved communities in the country.
Suresh Pansari, Vice Chairman and Whole-time Director – Rashi Peripherals Limited: The Union Budget 2023, presented by Mrs. Nirmala Sitaraman today highlights India’s ambitious growth vision. This is a progressive budget that emphasises inclusive growth, sustainable development, harnessing the power of new-age technologies, business reforms, green growth and empowerment of MSMEs, farmers, youth and women. Despite of global recession and the Russia – Ukraine war, India demonstrated an impressive 7% GDP growth in fiscal 2023. The fiscal deficit for FY23 is estimated at 6.4% of GDP while the fiscal deficit target for FY24 is pegged at 5.9%. This reduction will pave the way for the country’s robust economic growth.
In her 5th consecutive budget, the Finance Minister highlighted the role of new-age technologies such as AI, IoT, 5G and Robotics in technological advancement. Announcements of setting up Centers of Excellence for Artificial Intelligence and 100 labs for developing apps using 5G services, roll out of phase 3 of the eCourt’s project, and National Digital Library for children and adolescents etc. will trigger demand for IT and datacentre solutions. The Finance Minister also announced relief on Customs Duty on the import of certain parts & inputs like a camera lens and continued the concessional duty on lithium-ion cells for batteries for another year. It will help boost local manufacturing of mobile phones and drive mobile penetration in rural India.
The Finance Minister also announced a slew of measures for ease of doing business such as the reduction of more than 39,000 compliances and decriminalisation of more than 3,000 legal provisions. Also, PAN will be used as a common identifier for all Digital Systems of specified government agencies. The Union government will set up a DigiLocker digital document storage capability to enable the storage of documents digitally and ease the process of digital application of credit for MSMEs. This will encourage the thriving startup ecosystem and also attract global players to invest in India. The development of 50 new airports and helipads will aid seamless connectivity.
Namit Chugh, Investment Lead, W Health Ventures: This year’s budget highlights the government’s continued push toward improving access to quality healthcare for all. We are particularly excited about the announcement to open 3 inter-disciplinary AI research and development centres to “Make AI in India and Make AI work for India.” AI in Healthcare has already shown immense promise across the globe in improving care. We have seen use cases across diagnostics where AI tools are bettering accuracy, speed and also enabling early diagnosis, mental health where AI chatbots can be used as the first line of treatment, etc. Given the potential to create large healthcare data sets in India used to train AI and the pool of highly qualified tech talent, this move by the government makes us more ready than ever to make AI in Healthcare a trillion-dollar opportunity.
Healthcare continues to be a space where professionals like doctors, nurses, etc. have unequal influence over any individual’s care journey. Additional investment in developing and upskilling healthcare personnel like nurses and technicians was one of our key expectations from the budget. We welcome the announcement to set up 157 new nursing colleges in the country, a move that will be pivotal not only to healthcare but also employment.
Abhay Batra, Co- Founder & CFO, Clovia: Budget 2023 is a positive and balanced budget with a strong focus on a prosperous and inclusive India. It is encouraging to see that key pillars of growth include skilling and job creation, opportunities and reduction of compliance burden for small entrepreneurs, and the empowerment of women entrepreneurs. This is consistent with our expectations of including incentives to enable the empowerment of women entrepreneurs in tiers 2, 3, and 4.
Reduced tax burden for small entrepreneurs will mean reduced supply-chain costs and hence more competitive markets. This will help Clovia’s initiatives from day 1 of its existence of incubating small and medium manufacturer entrepreneurs to build their technical expertise, develop products and create sustainable revenue streams for themselves. Reduced individual tax burden will mean higher disposable income; this is a welcome step for the retail industry as a whole. Steps like carry forward of losses for start-ups in case of shareholding, extension of date of incorporation amongst other steps is a step forward for the start-up ecosystem.
Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles: After passing through a difficult period of lack of good quality” Made in India” EV components for the last 2 years, the local supply chains are beginning to take shape and the increase in customs duty on SKD/CBU is therefore timely as it will further incentivise the local suppliers because of the relative price advantage. There are still many a parts of EV componentry such as lithium cells, permanent magnets for electric motors, semiconductors etc that will need to be imported and we expected rationalisation of customs duty on such essential imports help keep the EV prices in check. The continuation of the customs duty-free status for machinery used to produce lithium-ion batteries could result in some stabilisation in battery pricing.
A “Green Credit Programme” to promote behaviour change has been announced as another intriguing proposal. We are awaiting the fine print and anticipate that it will support the creation and uptake of EVs.
Promoting Hydrogen as a fuel for future is another great idea specially as India is having abundance of sunshine most part of the year and majority of our goods are transported in heavy duty trucks that cannot run on lithium batteries efficiently and in a cost effective manner. We believe both Hydrogen and Lithium batteries can co-exist as great clean fuels for the energy and transportation needs of the next few decades.
Rajat Deshpande, CEO and Co-Founder of FinBox: It’s been heartening to see that financial inclusion has been clearly laid out as a priority in the 2023 budget, and been backed up by solid policy recommendations. For starters, the government has revamped the CGTMSE Scheme, infusing INR 9000 cr into the corpus and reducing the cost of credit by 1%. The formation of the National Financial Information registry and Digilocker for MSMEs too is a huge step for the credit underserved and is set to improve credit flow and promote financial inclusion.
Agriculture wasn’t left behind either – the FM proposed three centres of excellence for AI where leading AI players will collaborate in areas of health and agriculture. We’ve been talking about tech and agri for a while now, and it’s thrilling to see it come to fruition.”
Ketan Gaikwad, MD and CEO of RXIL(Receivables Exchange of India Ltd): “India has made remarkable advancements in the MSME sector, and the revamped credit guarantee scheme will take effect from April 1, 2023, through the infusion of Rs 9,000 crore in the corpus. This will enable additional collateral-free credit of Rs 2 lakh crore to MSMEs – FY 22 had a credit guarantee approved of 56,172, and an additional 9000 would improve their business and overall contribution to the GDP. PM Vishwakarma Kaushal Samman is aimed at providing assistance to traditional artisans and craftspeople to improve the quality, scale, and reach of their products. The scope of documents available in Digi locker will be expanded to enable more fintech innovative services and to ease up the process for MSME registrations in these services.
Gusti Noria, President, The Hyderabad Public School Society: This is overall a good consolidation budget. It is a good step by the FM to increase allocation for school education by 8% i.e. from Rs 63,449 crore (Budget Estimate) in 2022-23 to Rs 68,804 crore in 2023-24. The emphasis on establishing CoEs for artificial intelligence and also teachers’ training being revisited for better pedagogy and raising quality education, is a welcome step. The establishment of District Training Centres for educators along with the National Digital Library is yet another initiative that will be a boost for both public and private school education. The Skill India International Centres that are going to be set up across states will provide the right digital ecosystem for skilling and help foster national apprenticeship.
Applaud the initiative of the centre to recruit 38,800 teachers and support staff for the 740 Eklavya Model Residential Schools that will end up serving 3.5 lakh tribal students. Together these steps would surely pave an effective path to implement the National Education Policy for the “Amrit Peedhi”
Karun Tadepalli, Founder and CEO, byteXL: The education sector has witnessed some of the announcements from a longer-term perspective. The increase of 8% allocation to higher education to INR 44,094 crores is a welcome move from the point of raising the employability quotient of students. This will be a key component in transforming the institutes to provide better education compatible with industry needs. New age courses for Industry 4.0 like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills under Pradhan Mantri Kaushal Vikas Yojana 4.0 will help in skilling the students for global job opportunities making them career ready. Establishing a National Digital Library will enhance the culture of eLearning across the country, which will be a positive step towards a futuristic approach.
Rahul Singh, CIO-Equities, Tata Mutual Fund: Budget is pro-growth with focus both on investment (capital outlay increase) and consumption (direct tax cuts). This will be important driver of broad-based GDP growth in FY24E, critical to maintain the fiscal roadmap outlined by the government. Meanwhile, capital gains (on equity) remain unchanged which addresses one of the concerns pre-budget. Tax changes on some savings products in insurance is a negative for the insurance sector.
Saiyam Mehra, Chairman- All India Gem and Jewellery Domestic Council (GJC)- We thank Honourable FM Shri Nirmala Sitharaman ji for presenting a well-balanced Union Budget 2023-24, focused on the spirit of Amrit Kaal. Key announcements such as Income tax- rebate extended on income up to Rs 7 lakhs in new tax regime, increase in outlay of PM Awaas Yojana is a big relief for the middle-income group. However, the Gems & Jewellery Industry’s critical concerns are not addressed in the Union Budget 2023-24. While the Research and Development grant will be provided to one of the IITs for the development of Lab Grown Diamond seeds and machines, the other sectors of the industry have been ignored. The reduction in Gold Custom Duty in this Budget was our big expectation, which has severely hampered the industry and encouraged smuggling and grey market. GJC has been actively representing the reduction in customs duty of Gold over past many years. However, the Silver Dore Bars Custom Duty has been brought at par with Gold and platinum in this budget. This move will adversely affect the masses. GJC will continue to represent this important issue of the Industry. We are having a meeting with Honourable FM on 4th February at Mumbai, in which we shall once again stress upon the important concerns such as reduction in custom duty, EMI on Jewellery, Relief in Capital Gain tax and Gold Monetisation Scheme etc.
Mayank Arya, Co-founder- Yes Madam: Startups in India demand ease of doing business, and the Hon’ble FM has taken the same into consideration by reducing more than 39,000 compliances and decriminalizing 3,400 legal provisions. This will not only provide relief to the existing entrepreneurs but will also encourage the aspiring ones. Additionally, the persisting skill gap in youth is something that is faced in every organization. This implicates a direct impact on the overall employment rate in the country. Therefore, the proposals such as Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0 and setting up of 30 Skill India international centres announced in the budget are more relevant now than ever.
Mukesh Taneja – Co founder & CEO, GT Force: Auto sector in India has been struggling for way too long. It was expected that the foray of EVs will give a new life to the players, however, the sector continues to suffer from initial ownership costs and other factors. The penetration of EV brands and the adoption of the new technology seems to be taking time. Amidst this, the announcement by Hon’ble FM to replace old government vehicles will certainly play a game changer for the sector. Additionally, an Indirect tax proposal can certainly fuel the exports which will lift the auto economy immediately, as manufacturing here is competitive on the global stage. Furthermore, manufacturing lithium-ion battery has been a challenge for EV players, and it was the first ask of EV players to have customs duty exemptions on the import of capital goods and machinery required for lithium-ion batteries. Overall the budget has certainly taken steps to revive the sector.
Mridu Mahendra Das, Co-founder and CEO, Automovill: Auto and auto service sector have been facing various challenges. In the current scenario when new age entrepreneurs are trying to explore businesses in unorganised sectors like auto services or similar, it becomes difficult to follow procedures of traditional business, as it comes at a cost, and you only have so much bandwidth in terms of resources. Therefore, we value a lot that the budget has taken the same into consideration and by reducing more than 39,000 compliance it has made an effort to add to the ease of doing business in India. Additionally, the tax benefits on their incorporation is being extended by another year and the carry forward of losses to set off against future profits will now be allowed for 10 years instead of 7 years, which is going to provide a lot of relief to startups.
