Pre-Budget 2023 Highlights: Expectations high as stakeholders look for tax benefits
Pre-Budget Expectations 2023, Highlights: Finance Minister Nirmala Sitharaman will present the Union Budget tomorrow.
India Budget 2023-24, Highlights, January 30: The Budget session began on Tuesday with President Droupadi Murmu’s address to the joint sitting of the two Houses of Parliament. “By 2047, we have to build a nation that will be connected to the pride of the past and which will have all the golden chapters of modernity. We have to build an India that will be ‘Aatmanirbhar’ and capable to fulfill its humanitarian duties.” President Murmu said. The session will extend till April 6 and have 27 sittings over 66 days with a recess from February 14 to March 12.
Finance Minister Nirmala Sitharaman will present the Union Budget tomorrow. Expectations are high that she will meet the demands of all stakeholders, including the common man who is reeling under the price rise. The finance minister has held several rounds of discussions with various stakeholders, and final touches are being given to the Union Budget for 2023-24 which will be unveiled in the Lok Sabha.
Meanwhile, the Centre on Monday called an all-party meeting today, a day ahead of the start of the Budget Session of Parliament. The customary meeting, called by Parliamentary Affairs Minister Pralhad Joshi and chaired by Defence Minister Rajnath Singh, was held in the Parliament Annexe Building. At the meeting, opposition parties the Adani Group issue and the conduct of governors in some states ruled by them, news agency PTI reported. Joshi assured that the government was willing to discuss every matter allowed by rules and sought their cooperation. “We seek the opposition’s cooperation in running Parliament smoothly,” Joshi told reporters after the meeting which was attended by 37 leaders, representing 27 parties.
Did you know who presented the first Budget in India? In which year? Who was the first Indian PM to present a Budget? Who has presented the highest number of budgets? Read on to know more.
*Scottish economist James Wilson presented the first Indian Budget 163 years ago in 1860
*After Independence, then Finance Minister RK Shanmukham Chetty presented the first Budget on 26th November 1947 Read more.
The assumptions and assessments of India’s annual Economic Survey and Budget last year went awry within weeks of tabling them. Russia invaded Ukraine. Inflation ran riot. A year later, the war continues. The inflation genie is yet to be bottled. Will this fiscal be any different?
To be sure, as the Economic Survey 2022-23 notes, the Indian economy looks more upbeat than many others, given the circumstances. A broad-based recovery is underway and has lifted all major sectors above the pre-pandemic levels this year. But that is about to be tested by slowing global growth amid tighter financial conditions. The full effects of aggressive rate hikes by global central banks through 2022 will play out this year. A cache of troubles — high global debt burden, rising debt servicing costs, tight external financing conditions, geopolitical risks, and extreme weather events — threaten to pile on. Read more
Observing that the Indian agriculture sector has been growing, the Economic Survey 2022-23 said Tuesday it needs “re-orientation” in view of challenges like adverse impacts of climate change, fragmented landholdings, and rising input costs.
The Survey, presented by Finance Minister Nirmala Sitharaman in Lok Sabha, noted, “The Indian agriculture sector has been growing at an average annual growth rate of 4.6 per cent during the last six years. It grew by 3.0 per cent in 2021-22 compared to 3.3 per cent in 2020-21.” Read more.
Union Finance Minister Nirmala Sitharaman Tuesday tabled the pre-Budget Economic Survey 2022-23 in Parliament after President Droupadi Murmu’s address to the joint sitting of the two Houses.
The Economic Survey document was prepared by the Economic Division of the Department of Economic Affairs in the Ministry of Finance and formulated under the supervision of the chief economic adviser V Anantha Nageswaran. It gives insights into the state of the economy and various indicators in the current financial year 2022-23 (April-March) and outlook for the next year.
The first economic survey reportedly came into existence in 1950-51, when it used to be a part of the Budget. In the 1960s, it was separated from the Budget. Know the key highlights of the survey here.
Stating that both wholesale and retail inflation are on the descending slope of the surge that hit the Indian economy in the first half of the current fiscal, the Economic Survey on Tuesday pointed out the inflation challenge in FY24 should be a “lot less stiff” than it has been this year.
The Survey said the upside risks to India’s projected inflation rates may outweigh the downside risks with any possible re-emergence of Covid-19 in China that can trigger supply chain disruptions, along with the geopolitics associated with oil, which can affect imported inflation. Read more.
The Economic Survey was tabled in the Parliament on Tuesday by Finance Minister Nirmala Sitharaman, here are the key points from the survey:
The Year-on-Year (YoY) decline in monthly demand for Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) work is emanating from the normalisation of the rural economy due to strong agricultural growth and a swift bounce-back from Covid-19, said the Economic Survey 2022-23.
The Survey, presented by Finance Minister Nirmala Sitharaman in Lok Sabha on Tuesday, noted, “The number of persons demanding work under MGNREGS was seen to be trending around pre-pandemic levels from July to November 2022. This could be attributed to the normalisation of the rural economy due to strong agricultural growth and a swift recovery from Covid induced slowdown, culminating in better employment opportunities.” Read more.
RBI’s projection of retail inflation at 6.8 per cent in the current fiscal is neither too high to deter private consumption, nor so low as to weaken inducement to invest, the Economic Survey said on Tuesday.
However, entrenched inflation may prolong the tightening cycle and therefore, borrowing costs may stay ‘higher for longer’, it said.
The Economic Survey 2022-23 was tabled in Parliament by Finance Minister Nirmala Sitharaman. The Survey details the state of economy in the current fiscal, while giving a sneak peek into the future. Read more.
The Indian economy is seen growing 6.0-6.8 per cent with a baseline real GDP growth of 6.5 per cent in the next financial year 2023-24 on the back of a rebound in private consumption, higher capital expenditure, near-universal vaccination coverage enabling spending on contact-based services, and strengthening of the balance sheets of the corporates, says the Economic Survey for 2022-23 tabled in Parliament on Tuesday (January 31).
Challenges and risks
The Survey has listed risks and challenges from widening current account deficit (CAD) amid elevated commodity prices, likelihood of further rate increases in policy rates by the US Federal Reserve, the challenge of the depreciating rupee, and further possible loss of export stimulus amid slowing world growth and shrinking global market size along with ongoing monetary tightening exercise globally with “entrenched inflation” expected to prolong the tightening cycle. Read more.
India's economy is projected to slow to 6.5 per cent in the fiscal year starting April but will remain the fastest growing major economy in the world as it fared better in dealing with the extraordinary set of challenges the globe has faced, the Economic Survey 2022-23 said on Tuesday.
India's gross domestic product (GDP) growth of 6.5 per cent in 2023-24 compares with an estimated 7 per cent expansion in current fiscal year (April 2022 to March 2023) and 8.7 per cent in the previous year.
Like the rest of the world, India too faced an extraordinary set of challenges in tightening financial conditions and supply chain disruptions from a prolonged war in Europe but "withstood them better than most economies", the annual document detailing the state of the economy said. (PTI)
"Climate change is the biggest challenge of our time and with its devastating effects on ecosystems and communities, it is critical that the upcoming Union Budget allocates adequate resources to tackle it. The last budget was promising for the EV sector and discussed a new battery-swapping policy. A higher allocation was also made to the Union Ministry of Environment, Forests, and Climate Change. However, as the world’s third largest emitter of greenhouse gasses, we are still far from achieving our ambitious goals of net zero carbon emissions by 2070. The need of the hour is to broaden the focus. More funds need to be allocated towards developing climate technology designed to reduce emissions, improve energy efficiency and create more sustainable pathways for development. A greater focus needs to be laid on renewable sources of energy such as solar power and wind energy, energy efficiency measures, smart grids, and boosting the electric vehicle's ecosystem. Companies and startups operating in the sector must be given benefits like PLIs, subsidies, and lower GST on the import of raw materials or equipment, etc. Investors and startup incubators backing such players should be provided tax exemptions and other capital gain benefits. By prioritizing climate tech incentives in the upcoming Union budget, India can lead the way toward a greener future for all citizens," said Mr. Varun Goenka, CEO & Co- Founder, of Chargeup.
The Centre is likely to renew its thrust on capital expenditure in the upcoming Budget, buoyed by some visible traction in capex spending by states late in the current financial year. After remaining muted for the first seven months of 2022-23, capital spending by states has seen a sharp pickup in November, with 18 major states — including Gujarat, Karnataka, Jharkhand, Uttar Pradesh, Bihar and Odisha — posting a 49.7 per cent year-on-year increase at Rs 44,647 crore. For the financial year so far till November, these 18 states have seen a rise of 5.7 per cent in their capital expenditure to Rs 2.44 lakh crore, primarily on account of the sharp pickup seen in November, according to official data.
Capital expenditure by these 18 states in November accounts for 18.3 per cent of the overall capital spending during April-November. Capex by states such as Gujarat, Karnataka, Jharkhand, Uttar Pradesh has more than doubled in November as against the corresponding period last year. For states such as Odisha, the rise in capex is nearly five-fold, while for Bihar, it is an over three-fold increase in November.
While addressing a joint sitting of both Houses Tuesday, President Droupadi Murmu said an Aatmanibhar Bhart needed to be built by 2047. "By 2047, we have to build a nation that will be connected to the pride of the past and which will have all the golden chapters of modernity. We have to build an India that will be 'aatmanirbhar' and capable to fulfill its humanitarian duties," President Murmu said.
"An effective system has been put in place to end corruption. The government is of the clear opinion that corruption is the biggest enemy of democracy and social justice. A continuous fight against corruption going on for past years," President Droupadi Murmu said.
Follow our Parliament Budget Session Live blog for the latest updates.
As the Union Budget 2023-24 will be presented on February 1, various stakeholders from the education sector share what are their budget expectations for this year.
Stakeholders from the technology and medical sector expect to see a boost in research and development, more budgetary allocation for modern and state-of-the-art tools and equipment.
‘Investment in technology and upskilling is needed’: Prof Himanshu Rail, Director, IIM Indore
Fresh flows of funding and incentives must be made into programmes like Pradhan Mantri Gramin Digital Saksharta Abhiyaan and FutureSkills Prime. Implementation and audit taskforces must be built to accelerate and catalyze various ongoing broadband expansion and quality improvement projects. Investing in the advancement and enrichment of various technology and skilling platforms for students and educators like DIKSHA, NISHTHA, SWAYAM, etc. A detailed roadmap and resource allocation for escalating the implementation of the National Educational Technology Forum.
Moew sops for the affordable housing sector, increasing the range of price and greater tax concession are some of the demands of the real estate consultancy group Anarock from the upcoming Union Budget to revive the “sluggish” sector.
According to Anuj Puri, chairman of Anarock, a survey conducted by his firm found that from 39 per cent buyers going for affordable houses in 2018, 26 per cent have shown interest in 2022 in the top seven cities.
In numbers, Of the 6.30 lakh unsold units, over 27 per cent are of affordable stock, the survey claims.
The Centre on Monday called an all-party meeting today, a day ahead of the start of the Budget Session of Parliament. The customary meeting, called by Parliamentary Affairs Minister Pralhad Joshi and chaired by Defence Minister Rajnath Singh, was held in the Parliament Annexe Building.
RM Shri @rajnathsingh ji chaired a meeting with floor leaders of the NDA parties, ahead of the #BudgetSession of Parliament. Together we deliberated on the strategy for the upcoming session. pic.twitter.com/gIXLJWRGzL
At the meeting, opposition parties the Adani Group issue and the conduct of governors in some states ruled by them. Joshi assured that the government was willing to discuss every matter allowed by rules and sought their cooperation. 'We seek the opposition's cooperation in running Parliament smoothly,' Joshi told reporters after the meeting which was attended by 37 leaders, representing 27 parties. Read more
The education sector has several expectations from digital and technology applications. It expects the applications to help students overcome different constraints and divides of access, distance, availability of time, language, finances, choices and preferences, learning styles, learning pace and learning paths etc. It is also hoped that technology can be leveraged to reduce non-teaching workload for teachers.
Digital and technology applications have the ability to provide teaching-learning materials for teachers as well as management tools for the administrators. Additionally, students will be able to learn about things that are difficult to experience in real life through technology – for example deep sea exploration, nuclear explosions, volcanic eruptions etc. Support for students is also expected to cover Personalized Adaptive Learning (PAL) for learners including those with physical and learning disabilities and for administrators by providing them real time, actionable data for decision making. Deloitte India's Kamlesh Vyas writes
With Finance Minister Nirmala Sitharaman getting ready to present the last full budget of the Modi 2.0 government, expectations are high that she will meet the demands of all stakeholders, including the common man who is reeling under the price rise.
The finance minister has held several rounds of discussions with various stakeholders, and final touches are being given to the Union Budget for 2023-24 which will be unveiled in the Lok Sabha on February 1.
"The Budget to be announced will be an exercise of managing several objectives: movement to fiscal prudence, stimulating growth without accompanying inflation, garnering more resources through non-tax measures and providing sops where necessary. As all these objectives would run in different directions, the FM will exercise considerable dexterity to move ahead decisively on all counts," said Madan Sabnavis, Chief Economist, Bank of Baroda. (PTI)
Tamil Nadu Chief Minister and Dravida Munnetra Kazhagam (DMK) president M K Stalin has urged party MPs to raise issues like the ban on BBC documentary on the 2002 Gujarat riots, and the most recent controversy surrounding Adani Group and its economic effects during the upcoming budget session of Parliament, which starts on January 31. At a meeting Sunday, Stalin asked the DMK MPs to support the Congress on all the important issues.
Long standing demands for Tamil Nadu to be exempted from the National Eligibility cum Entrance Test (NEET), preference for locals in Union government jobs in the state, international status for Madurai airport, recognising native Tamils as employees of the Neyveli Lignite Corporation (NLC), issue of the sharing of power with Tamils in Sri Lanka, and speedy completion of AIIMS in Madurai are among the other issues the DMK MPs likely to raise in the budget session. Read more
Indian government debt market participants have lowered their position in longer-duration bonds but remain invested in the shorter end of the curve on expectations of another year of elevated government borrowings, investors and traders said.
"Looking at the current levels, it seems the markets are light, especially on the long end, and are expecting a heavy borrowing calendar," said Vijay Sharma, senior executive vice president at PNB Gilts. "Chances of any positive surprise are more as major negatives are already factored in at current levels."
Barclays and Goldman Sachs have predicted the borrowing to be higher, at 16.80 trillion rupees, and the former expects the benchmark 10-year bond yield to trade in a 7.50%-7.75% range in the April-June quarter amid a glut of fresh supply.
The benchmark 7.26% 2032 bond yield was last at 7.40%, 14 basis points above the lows hit earlier in the month on easing U.S. and domestic inflation. Most market participants believe the 7.40% level on the benchmark paper should be the near-term peak and if there is any positive surprise in the borrowing schedule, the light positions are likely to trigger a rally. (Reuters)
The Indian rupee ended flat on Monday, as the choppiness in equity markets soured the mood at the beginning of a week packed with the domestic Union budget and global central bank meetings.
Having moved in a narrow band throughout the session, the partially convertible rupee finished at 81.4950 per U.S. dollar, compared to its previous close of 81.5225.
There were corporate dollar inflows in the latter half of the session, otherwise, the day was fairly quiet, said a private bank trader. The mood was sombre amid volatility in Indian stock markets , following a two-day selloff fuelled by a U.S. short-seller's report on the Adani Group flagging concerns about the conglomerate's debt levels and its use of tax havens. (Reuters)
The government will present the Budget for the financial year 2023-24 (FY24) on February 1. This year’s Budget will be the last one before the general elections of 2024. Taxpayers, like every year, expect the Budget to have announcements that put more money in their hands to deal with high costs of living and inflation.
They expect tax deductions under various heads. New deductions ensure greater income in their hands. Greater disposable income boosts expenditure. This is welcome — especially in inflationary times.
The government introduced an optional tax regime in recent years. The new tax regime allowed some taxpayers to opt into a low-tax regime where they would lose their deductions. However, for any person with financial and family responsibilities, it may be difficult to let go of these deductions to opt for the new tax regime. Therefore, they remain on the old regime to claim necessary deductions. Read more
Nilesh Patel, the founder and CEO of LeadSquared, a Bengaluru-based SaaS company known, said: “The increased adoption of cloud computing and the proliferation of affordable internet access have been key drivers for the growth of the SaaS market in India in the past few years. In the upcoming Union Budget, the government should continue to take the momentum of last year’s growth ahead. I expect that this year's budget will facilitate ease of doing business with other countries by reducing regulatory requirements and enabling SaaS start-ups to navigate compliance and legal requirements faster. We expect the budget to strengthen the start-up ecosystem and assist in booming its affluent future, even outside India.”
Eklavya Gupta, the co-founder and CO-CEO of Recur Club, a recurring revenue-based financing solution provider, said: “India is eagerly looking forward to the policy announcements and allocations designed to support start-up ventures and the entrepreneurship sector in the country. With the ongoing funding, it is especially crucial for organisations to receive comprehensive support from the government in streamlining and easing funding avenues and increasing accessibility for all. To reinvent the technology-based underwriting experiences and infrastructure and shorten the time to funding underprivileged MSMEs, Indian fin-techs would require more collaborative partnerships with banks and NBFCs.”
Lalit Das, the founder 3SC Solutions, a SaaS and AaaS-based Supply Chain solution providers, said: “The Union Budget 24 will be announced at a period of critical importance for India, particularly in light of the ongoing pandemic and the impending recession. Exports are one of the main factors contributing to India's economic growth today, as the global market presents a host of opportunities for the nation's comprehensive supply chain network. To make India a part of the worldwide supply chain for products and services, the budget must create a favourable political climate that promotes importing raw materials rather than completed items, seeking new markets and increasing service exports.”
Ashok Babu Kunjukkannan, co-Founder and president of e-con Systems, an end-to-end OEM camera solutions provider, said: “Having described Artificial Intelligence as “sunrise opportunity” in last year’s budget, the Finance Minister has emphasized the importance of AI from the government’s view point. With the IOT, 5G and Robotics emerging together, the AI on the edge and cloud will significantly push the frontiers further and further in all areas of industry, agriculture and services and most importantly will position India as a state-of-the-art manufacturing power-house of the world.”
A review of budgets since PM Modi came to power shows he’s been chipping away at subsidies, barring the pandemic years when assistance saw an increase. The government is pressing ahead with putting the fiscal house in order even if it risks, for instance, upsetting PM Modi’s loyal base of women voters. Provisions for subsidizing liquefied petroleum gas used for cooking for the current fiscal year were lowered to 58.1 billion rupees from 352 billion rupees two years ago.
The Union Budget will be unveiled Wednesday, testing Prime Minister Narendra Modi’s fiscal mettle seen as key to boosting investor sentiment even as it will likely leave less room for handouts a year before he seeks a third term.
PM Modi, who rides an enduring wave of popularity as his second term is coming to a close, looks poised to sustain fiscal consolidation as he takes the global stage with India’s presidency of the Group of 20 nations. Shrinking the deficit which hit a record 9.2% of gross domestic product during the first year of the pandemic is necessary for Asia’s third-largest economy to improve its credit rating currently at the lowest investment grade. Read More
This is going to be a crucial week for the Indian economy. Even before the Union Budget is presented, the immediate future of India’s stock markets and the well-being of retail investors is likely to be determined by how the stocks of Adani Group of companies perform on Monday and Tuesday, especially after the Hindenburg Report alleging manipulation by the company.
Then on January 31st, two key documents will be released. One, is the Economic Survey, prepared by the Chief Economic Advisor. Two, Tuesday will also witness the release of the International Monetary Fund’s latest update of its World Economic Outlook. Both documents will carry pointers about the prospects of India’s economy. However, the most far-reaching impact will be that of the Union Budget. While several of factors may be outside the government’s control, the Union Budget can play a big role in steadying the ship. Udit Misra explains how one can evaluate or judge a Union Budget.
The government has called an all-party meeting on Monday, a day ahead of the start of the Budget Session of Parliament. The customary meeting, called by Parliamentary Affairs Minister Pralhad Joshi, is to be held at noon on January 30 in Parliament Annexe Building.
During the meeting, the government is expected to seek cooperation from all parties for the smooth running of Parliament. Opposition parties are expected to raise matters of concern during the meeting and also highlight issues they plan to raise during the session. In the afternoon, a meeting of NDA floor leaders will also be held to strategise floor cooperation. The Budget Session will be held in two parts. Finance Minister Nirmala Sitharaman will present the Union Budget on February 1. The Union Budget 2023-24 may be the last full budget before the 2024 Lok Sabha elections. (PTI)
Good Morning and welcome back to our coverage of news related to the Budget Session that starts from tomorrow. Follow this space for latest news and updates regarding the Budget
With the Union Budget coming up, S Mahendra Dev writes: "The first advance estimates released by the National Statistical Office showed that GDP in constant prices in FY23 was 8.6 per cent higher than the pre-Covid year of FY20. In other words, India had a growth rate of 2.86 per cent per annum in the last three years. Also note that the pre-Covid year, FY20, had a low base with 3.7 per cent growth. Therefore, the need to focus on higher growth in the forthcoming budget, medium and long-term, is obvious. The budget also should keep in mind global headwinds such as geopolitical factors, slowdown of growth in the US, Europe and China, the implications of the Ukraine-Russia war, high inflation etc. Though China lifting Covid-19 restrictions may give some hope for the global economy." Read More
US venture capital firms investing in India are expecting the Union Budget 2023 to support the growth and development of the startup ecosystem in the country, according to a top investor.
Union Finance Minister Nirmala Sitharaman is scheduled to table the Union Budget for the financial year 2023-24 before parliament on February 1. The venture capitalist community here in the US is very excited given the large number of unicorns emerging out of India in recent years.
According to Arun Kumar, managing partner of Celesta Capital, the venture capitalists want to capitalise on Indian talent and invest in them. (PTI)
The first advance estimates released by the National Statistical Office showed that GDP in constant prices in FY23 was 8.6 per cent higher than the pre-Covid year of FY20. In other words, India had a growth rate of 2.86 per cent per annum in the last three years. Also note that the pre-Covid year, FY20, had a low base with 3.7 per cent growth. Therefore, the need to focus on higher growth in the forthcoming budget, medium and long-term, is obvious. The budget also should keep in mind global headwinds such as geopolitical factors, slowdown of growth in the US, Europe and China, the implications of the Ukraine-Russia war, high inflation etc. Though China lifting Covid-19 restrictions may give some hope for the global economy.
Last month, Finance Minister Nirmala Sitharaman mentioned that the FY24 budget would follow the spirit of the earlier ones. The minister also said the next budget will set the template for the next 25 years.
The Finance Ministry has indicated that India is on track towards meeting the targeted fiscal deficit of 6.4% of GDP for FY 2022-23, given higher tax revenue buoyancy. While this is good news, there remains much to be done in terms of strengthening tax revenues. India’s tax-to-GDP ratio stands at 10-11%, which is significantly lower than the average of other emerging economies where it is 21% of GDP, while the corresponding ratio for OECD nations is 33%. Against this background, one may expect the upcoming Budget to continue its focus on fiscal consolidation through increased tax revenues. Fiscal consolidation, coupled with simplification and rationalisation may be the overarching themes of this Budget.
Which was India’s most reformist budget? It’s probably a toss-up among Manmohan Singh‘s “Victor Hugo” budget of 1991-92, P Chidambaram’s “Dream Budget” of 1997-98, and Yashwant Sinha’s “Millennium Budget” of 2000-01. The Narendra Modi government’s big-bang reforms — demonetisation, goods and services tax, or slashing of corporation tax rates — were off-budget exercises.
Which was the most populist budget of all? It was arguably the one presented on February 28, 1947 by Liaquat Ali Khan, finance minister of the Interim Government of the Congress and Muslim League that, between September 2, 1946 and August 15, 1947, oversaw the transition to India’s independence and Pakistan’s creation. Harish Damodaran writes
The Finance Ministry has indicated that India is on track towards meeting the targeted fiscal deficit of 6.4% of GDP for FY 2022-23, given higher tax revenue buoyancy.
While this is good news, there remains much to be done in terms of strengthening tax revenues. India’s tax-to-GDP ratio stands at 10-11%, which is significantly lower than the average of other emerging economies where it is 21% of GDP, while the corresponding ratio for OECD nations is 33%. Against this background, one may expect the upcoming Budget to continue its focus on fiscal consolidation through increased tax revenues. Fiscal consolidation, coupled with simplification and rationalisation may be the overarching themes of this Budget. Read more
India's federal government is likely to keep its gross market borrowing below 16 trillion rupees ($196 billion) for 2023/24 as it does not want to destabilise the bond market with any negative surprises, two sources close to the deliberations said, news agency Reuters reported.
"Feedback from the market participants is that a borrowing of 15.5-16 trillion rupees can be absorbed well in the next financial year," one of the officials told Reuters. The second official said that based on the discussions held so far within the government, the view has emerged that borrowing should be consistent with the market's expectation.
The government has so far raised 12.93 trln rupees up to Jan. 27, which is 91% of the overall gross borrowing target of 14.21 trillion rupees in the 2022/23 fiscal year which ends on March 31. (Reuters)
In order to stay competitive in the global technology market, the government should expand its investments in digital and automation technologies in teh Budget 2023-24, Sangeet Kumar, Co-founder & CEO, Addverb Technologies said.
"To provide more advanced and innovative solutions for bringing in sustainable business models, startup and technology investments should be prioritised," Kumar told Indian Express in a statement. "Additionally, a decrease in income taxes will help the nation keep its top personnel," he added.
"Unprecedented growth has been witnessed across industries, especially in terms of emerging technologies like AI, ML, IoT, robotics and most importantly 5G," KUmar said citing a recent report by Gartner, which shows the Indian IT Industry is expected to grow at a rate of 2.6% in 2023.
According to UN World Urbanization Prospects 2018, 50 per cent of India’s population will reside in urban areas in 2050 compared to 31 per cent in 2011. Indian cities will continue playing an important role for economic activities and will be instrumental in achieving the country’s goal of becoming a $ 5 trillion economy. Given this, there is a need for continued focus on developing urban infrastructure and planning.
Further, Government of India, during FY:2022-23, incentivized States/UTs for implementation of urban planning reforms relating to modernization of building byelaws, implementation of town planning schemes and local area plans, implementation of transit-oriented development, creation of sponge cities and adoption of transferable development rights. Debashish Biswas and Murali Thimmapuram share their opinion
The Chemical industry in India that contributes around 10% to the GDP should be given prominence in Budget 2023-24, Mihir V. Shah, Executive Director, Vipul Organics Limited said on Friday.
"The Indian manufacturers have been asking for stringent anti-dumping duty protocols to ensure that the industry continues to be a growth driver in India. Production Linked Incentives that are available to several industries should also be made available to the chemical industry in this Budget. This should be applicable to existing as well as greenfield projects," Shah told Indian Express in a press statement.
He said that to achieve higher economic output from chemical production in India, the government, in the upcoming budget, "should earmark grants for providing infrastructure such as land banks, common effluent treatment plants, etc." "Only then can the industry focus on innovation and technology and not worry about cutting corners to meet global demand and global prices," Shah added.
The Budget 2023-24 should aim at introducing a policy for improving the component supply chain in the country, along with empowering 5G players and focusing on greater digital inclusion with affordable smarthphones, Muralikrishnan B, President at Xiaomi India said.
“India is on the path to becoming a digital powerhouse, and the smartphone industry has rapidly evolved to support this journey. The focus on Make-in-India and the Production Linked Incentive scheme has provided the much-needed impetus to the industry and put it on the global map. With the upcoming budget, we look forward to policy initiatives targeted toward the components supply chain ecosystem that can help increase self-reliance and boost the economy,' Muralikrishnan said in a press statement.
'We are hopeful to see an enhanced push from the government to empower start-ups and industry players to build relevant use cases that highlight 5G's real-life use cases, which will drive rapid adoption of 5G. To drive greater digital inclusion, we would be thrilled to see some government schemes to make smartphones accessible to students and women to drive demand across the sector,' he added.
Other than increasing public expenditure on healthcare to at least 2.5% of GDP, the budget should aid in providing healthcare where it is needed the most – rural India. The focus should be on creating accessible healthcare infrastructure, providing adequate supply of doctors, incentivising quality patient care and creating a digital backbone for the future, according to Prateek Ghosal, Chief Strategy Officer, Ujala Cygnus Group of Hospitals.
In a press statement shared with the Indian Express, Ghoshal listsed how the government could focus on the key issues.
Healthcare infrastructure: To attract more private sector investment in second and third tier cities, healthcare should be given 'Infrastructure' status which will enable access to low-cost funding as well as provide tax benefits, further reducing input costs. While during the COVID-19 pandemic, the RBI incentivised liquidity for emergency healthcare services by the extension of credit under priority-sector classification, this move should be made permanent, particularly for projects focused on creating infrastructure in rural India.
Manpower Supply: To attract private investment for medical colleges, land allotment, subsidies and moratoriums on loans need to be provided. Policies to ensure mandatory rotation of doctors in Tier 2 and 3 cities as well as incentivisation and reallocation support to specialists for both private and public systems can help channel doctors to rural India.
Patient Support: While the Ayushman (“PMJAY”) scheme has come a long way in addressing financing support to low-income patients, there is a need to incentivise private insurers to provide affordable insurance packages to the “missing middle” who delay surgeries due to lack of financing. Further, a focus on incentivising primary and preventive care by ensuring higher budgetary allocation towards primary care, increased tax exemption on primary care expenditure as well as expansion of Primary Health Centres and PPP integration of PHCs via medical and technology support can help reduce hospitalization expenses in an otherwise fee-for-service system where millions suffer from chronic diseases.
Ahead of the Union Budget, the CPI(M) has alleged the Indian economy is yet to revive from the blow it was dealt with during the Covid pandemic and blamed the government for the way it was handled.
The party demanded that taxation and public expenditure be used to tilt distribution in the favour of the working masses, improve the incomes of farmers, generate employment, and attain improved health and educational outcomes. The latest editorial of the party mouthpiece "People's Democracy" said the budget for 2023-24 is to be presented before Parliament at a time when both Indian and world economies are facing a grim situation.
"Notwithstanding the tall claims of the (Narendra) Modi government, India's economy is yet to recover from the crippling effects of the Covid pandemic and the disastrous way in which it was handled by the Government of India...," the editorial said. "India has to, however, be prepared for not merely a temporary world recession, but the possibility of a prolonged world capitalist crisis as the neoliberal 'globalisation' of the last few decades comes undone under the weight of its own contradictions," it added. (PTI)
Ahead of the Union Budget, the CPI(M) has alleged the Indian economy is yet to revive from the blow it was dealt with during the Covid pandemic and blamed the government for the way it was handled.
The party demanded that taxation and public expenditure be used to tilt distribution in the favour of the working masses, improve the incomes of farmers, generate employment, and attain improved health and educational outcomes. The latest editorial of the party mouthpiece "People's Democracy" said the budget for 2023-24 is to be presented before Parliament at a time when both Indian and world economies are facing a grim situation.
"Notwithstanding the tall claims of the (Narendra) Modi government, India's economy is yet to recover from the crippling effects of the Covid pandemic and the disastrous way in which it was handled by the Government of India...," the editorial said. "India has to, however, be prepared for not merely a temporary world recession, but the possibility of a prolonged world capitalist crisis as the neoliberal 'globalisation' of the last few decades comes undone under the weight of its own contradictions," it added. (PTI)
Budget 2023 should focus on supporting the micro-scale enterprises in the nation, Aye Finance CEO and MD Mr. Sanjay SHarma said. For achieving this he shared some ideas:
1. Lending to micro-enterprises by NBFCs and Banks should be encouraged.
2. Allocation for initiatives that help improve the quality of the produce of micro-enterprises.
3. Health and critical illness coverage at affordable premiums for micro-enterprise owners and their families.
4. Continued Credit Guarantee support through CGTMSE and simplification of the legal recovery requirements for very small loans below Rs 2 lacs. These bold steps will enable improvement in the flow of funds to the financially excluded micro-scale enterprises.
"The tourism and hospitality sector in India is expected to see significant growth in 2023 after the impact of the pandemic. I expect that the government will announce a free e- visa scheme for 5 Lakh international tourists similar to what has been done in the past too. Additionally, the trend of wellness tourism is on the rise, and as India is known for its Ayurveda and Yoga practices, a specific strategy for promoting wellness tourism should be included in the Union Budget. To further support the sector, the government should also consider implementing policies that provide hospitality players with more affordable loan options and longer repayment periods, in order to create job opportunities and sustain growth," Asif Fazlani, Managing Director, Fazlani Nature's Nest, said.
"The whole healthcare sector has big expectations from the budget 2023-24 and we expect the diagnostics industry will also not be left behind, in terms of growth and innovation. There is a need for greater standardization of diagnostic tests across the country. In a competitive healthcare market, accreditation like NABH and NABL not only raises the standard of diagnostics but also gives confidence to the patient or customer. We expect that encouraging accreditation of labs to be extended to Tier 2 and Tier 3 cities as well to provide equitable access to quality healthcare. We do feel that in the future, healthcare both public or private should provide equitable quality healthcare for all.
The government may reduce and gradually phase out the GST rate on diagnostic equipment, reagents, and all supplies related to diagnostic testing, as healthcare services are exempt from GST. This would enable the service provider to make the services more affordable to the consumer, which is the need of the hour," City Xray & Scan Clinic Pvt. Ltd. said.
"For India to become a leading contributor to the global cotton market, it is key that the industry pursue higher standards for traceability and sustainability. We hope that the upcoming Budget 2023 will provide incentive or subsidy programs for producers or exporters who meet such requirements, for example, those who implement technologies that lower consumption of water during cotton processing or lower use of harmful pesticides during farming," Sumeet Mittal, Head of Cotton, India, Louis Dreyfus Company said.
"Within Budget 2023, we hope to see further government support and funding for initiatives that encourage farmer education on quality seeds, healthier pest control methods and progressive agricultural practices," he added.
"We look forward to working closely with the government and other industry stakeholders to educate farmers on better farming practices, in order to boost cotton yield, and to expand the global market share for Indian textiles," Mittal said.
'The real estate sector is looking forward to the 2023-24 Union Budget in order to maintain the growth momentum that began last year. The primary goal of this budget must be to achieve GDP growth of 6.5-7 percent in a year when many global economies may experience a recession. We anticipate a bold, growth-oriented budget, with announcements that will encourage capital investment and FDI inflows into India. To begin, in order to encourage homeowners, particularly first-time purchasers, the government could enhance the mortgage interest tax deduction ceiling, providing these buyers with tax relief. Furthermore, the highest tax rate of 30% is hoped to be reduced to 25%. With more than half of India's 2030 real estate stock still unfinished, the real estate sector has a great chance to become greener, reducing energy consumption and embodied carbon emissions and meeting the ever-growing energy needs of buildings. To promote the sector, the Union budget should further incentivize investments in green technologies. Investing in green infrastructure like renewable energy sources, city planning, architectural codes, and infrastructure regulations, will demonstrate the importance of focusing on developing technologically advanced and planned cities for a contemporary India,' Mr. Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani , said.
"As an entrepreneur, I think it is important that there should be an increase in the GST exemption slab which will enable us to have more working capital in hand on a day-to-day basis & help in financial enablement. The government could announce steps to reduce tax litigation and concession on indirect taxes levied on businesses run by women entrepreneurs. Also, there should be initiatives by the government to promote business loans for women entrepreneurs without any collateral considering the fact that India will only become a trillion-dollar economy if more women become Finance champions," said Puja Srivastava, Co-Founder and CTO at Spocto.
Kerala Finance Minister K N Balagopal has expressed hope that the Union Budget will allocate more funds for social and infrastructure development as well as correct the Centre's fiscal policy in dealing with states.
The Left leader, who is critical of the Union government's approach towards the states in terms of GST implementation and devolution of central funds, also said the "serious discrimination" showed towards Kerala should be stopped.
In an interview to PTI, Balagopal said the Centre's approach has led to a financial crisis in the state that is affecting the overall development.
Union Finance Minister Nirmala Sitharaman will be announcing the Budget for 2023-24 on February 1, at a time when global uncertainties and headwinds are impacting the Indian economy. (PTI)
In the 2023 Budget, the logistics industry expects the government to take measures to expedite the integration and development of ULIP which will unify digital logistics systems and enhance efficiency, transparency, and collaboration between various industry stakeholders, Gautam Kumar, COO & Co-founder, FarEye, said. The company said that the government must look at incentivising logistics players that want to adopt artificial intelligence, the Internet of Things, automation, and big data.
“The union government is continuously working and finding solutions to achieve its 2070 sustainability target. Keeping the same in view, we hope that in the upcoming budget, the government will introduce better and more attractive incentives, aimed at promoting the green economy. Besides this, we expect that government interventions and policy changes like tax rebates for meeting set environmental standards, certifications, green taxes on harmful environmental activities, and subsidies on the use of green products can go a long way in furthering the agenda of sustainability,” Kuldeep Malhotra, Dy. Managing Director, Konica Minolta Business Solutions India Pvt Ltd said.
Dr Vibha Dhawan, Director General, TERI, pointed out that the Union Budget 2023-24 will be the first to be presented since India announced the Long-Term Low Emission Development Strategies (LT-LEDS) to achieve the net zero emission goals by 2070. “It is imperative that the vision of long-term transition is embedded in the annual budgets, as the fiscal policy not only alters incentive structure for consumer and producer choices, but it also sends a strong signal to the private sector for technology adoption,” she said.
In order to bring down the material intensity of India’s development trajectory, Dr Dhawan suggested that the budgetary allocations for yet-to-be-built infrastructure must account for the needs of green planning, particularly the promotion of energy-efficient building designs, sustainably produced materials and the use of renewables.
She added that the “green” efficiency of subsidies needs to be enhanced by prioritising greener alternatives, such as biofertilizers and nano-fertilizers. “We need to align the LiFE initiative with the promotion of solar energy by targeting high power-consuming households. A combination of generation-based incentives for installing solar rooftops with higher peak tariffs will encourage high power-consuming households to invest in solar rooftop systems,” Dr Dhawan said. She further added that the range of options that the recently amended Energy Conservation Act offer can be innovatively utilized for bringing down the cost of transition as well as distribution and enforcement of national targets to a wider set of actors.
Dr Garima Sawhney, Co-founder, Pristyn Care said: "Women entrepreneurs in various sectors of the nation have great expectations from the government regarding credit support and Covid-19 incentive for women-led businesses. Although the pandemic has impacted almost every sector of the economy, the female workforce is much more severely affected. Therefore, there is a need to relook at investments for health leadership to be inclusive, diverse, and reasonable. In the upcoming Union Budget, the female workforce, especially female entrepreneurs, expect the Centre to give extra incentives to support them. The women entrepreneurs also expect the government to provide tax relaxation, interest-free loans, and offer funds dedicated to women entrepreneurs."
"The budget should have measures for skill development for women and parity in salaries for the female workforce, keeping in mind that the scope has now shifted to technology-based jobs. Better educational opportunities so that women have the skills they need to start their own companies or career paths outside of traditional women-dominated fields. A solid and viable women-centric industrial policy is required to get prominence for women entrepreneurship development. The startup sector would expect the budget for 2023 to continue with stability in the policies," she added
Shivam Singla, founder-CEO, Leegality, said: "The last budget propelled India towards a digital future. The introduction of the digital rupee, policies on cryptocurrencies, e-passports, digital universities and agricultural drones are some of the stepping stones to a digital future. The start-up ecosystem, however, has long been emphasizing the need to overhaul ESOP taxation - they should be taxed at the time of sale and not at the time of vesting. ESOP offerings are one of the most effective tools for attracting and retaining talent, and changing how they are taxed will further drive innovation. Though the government has put exceptions in place for delaying income tax, we anticipate more liberal exemptions to facilitate the seamless exercise of ESOPs."
Gautam Sinha, co-founder-CEO, CBREX, said, “The capital gain tax ruling concerning the sale of unlisted securities introduced in budget 2021 disincentivizes private investments, which in turn, adversely impacts the growth of startups. Under the current regime, gains on listed shares are considered long-term if held for 12 months and taxed at 11.96% whereas those on unlisted securities are considered long-term if held for 24 months and taxed at 23.92%."
"These factors are heavily stacked against the startup ecosystem. Startups are considered innovation and job-creating engines and should be nurtured in early-stage. They rely heavily on private investments to get off the ground and sustain initial loss-making periods. Parity on these two counts will provide a level playing field for private investors. At the same time, it ensures that startups continue to raise capital seamlessly, and helps them stay focused on building nextgen products and solutions,” he added.
Senu Sam, founder and chief executive officer of Mykare Health, said Healthcare providers have embraced technology with virtual consultations, new age asset light models, wearable technology, and many more innovations that aid smooth delivery of healthcare.
"Government must focus on healthcare innovation by supporting startups. We are hopeful and looking forward to tax benefits including GST exemption for New Age Asset Light HealthTech Startups; allowing startups to collaborate with Govt Insurance, Govt Doctors and Govt Hospitals; tax benefits to HNIs investing in startups; smooth process of foreign payment collection for Indian healthcare startups and incentivizing companies promoting Heal in India Project," he said.
Every one in four Indians is concerned about the threat of job layoff while three out of four are worried about rising inflation yet half of them believe that the country's economy will grow in 2023, according to a survey by marketing data and analytics firm Kantar.
In its second edition of India Union Budget survey, Kantar found that consumers expect an announcement in policy changes with respect to income tax, with increasing basic income tax exemption limit from current Rs 2.5 lakh being the most common expectation.
"At a macroeconomic level, most have a positive outlook -- 50 per cent believe that the Indian economy will grow in 2023 as against 31 per cent, who feel there will be a slowdown. Non-metros at 54 per cent are more optimistic as compared to metros," Kantar said. However, it said the global economic slowdown and a potential resurgence of COVID-19 are key areas of worry for Indians.
"Three out of four people are worried about the rising inflation and want the government to introduce decisive measures to tackle the same," it added. (PTI)
Sharing his Pre-Budget expectations, Vicky Jain, CEO and co-founder of HR tech platform uKnowva, said: "The human resources sector, like other business sectors, has expectations for the budget, primarily in the areas of employee welfare and taxation. Due to rising employment and healthcare expenditures, the Finance Ministry should take into account tax relief measures for paid workers who work from home in the upcoming budget."
"In addition, there needs to be a significant emphasis on putting health first, whether it is preventative care or health issues related to working from home. More incentives and tax reforms for employees should be considered in the Union Budget 2022–2023. With the rate of technology disruption and the major rise in digital adoption over the past couple of years, a large section of employees are at risk of being made redundant. This has accelerated learning among employees to a great extent. The upcoming budget must provide adequate policies and measures to facilitate this move to ensure that employees are made future-ready. To ensure that India's workforce is prepared for the future, the forthcoming budget must build on recent reforms in labour and education and continue to offer policy and budgetary support for skilling. Additionally, the scale of financial provisions under the Digital India mission and the Skill India campaign needs to increase in the upcoming budget," he added.
Sunil Yadav, CEO, PlayerzPot, said: "With the Union Budget 2023 right around the corner, we eagerly look forward to its impact on the gaming industry. The upcoming Budget can create a more favourable business environment with regard to GST, and ease of doing business and that can attract talent from Tier II and Tier III cities too."
"India's gaming industry is expected to reach $8.6 billion by 2027, demonstrating its huge potential for growth. By giving it the attention and importance it deserves, the industry in India is poised for even greater success. In this budget, we hope roadblocks like bans and a lack of regulations get addressed. The AVGC Task Force that was announced last year is a great step to catalyse the industry’s growth, but we believe there is scope to do more in this regard. What will also be interesting is the outcome of a recent proposal in the online gaming policy that involves establishing a self-regulatory organisation (SRO) to handle the registration and approval of games. Primarily, what the industry needs is a proper set of guidelines and rules to grow further. With the right policies in place, the gaming industry in India has the potential to become a major economic driver for the country," Yadav added.
Sharing his Pre-Budget expectations for the education sector, Dr Sanjay Goel, Director, Institute of Engineering and Technology, JK Lakshmipat University, Jaipur, said: "In the 1960s, the famous Kothari commission recommended raising the education expenditure to 6% of the GDP. Over the decades, India’s education expenditure has remained far lower than that. Even currently, it is nearly just half of it. Implementation of NEP-2020 will remain at superficial levels without a significant increase in the education budget. The ambitious goal to not only expand education but also to improve learning outcomes, requires much better infrastructure, faculty-student ratio, faculty training, and learning resources. To be really effective, policy initiatives like ABC, NSQF, and NHEQF, research, and innovations in education also need to be expanded through financial support in public as well as private institutes."
"This budget should make a provision to give free internet access to students and teachers and freely give internet access devices to students of poor families. All education institutes, including private institutes, should be given free or highly subsidized high-speed internet connections. Universities should be asked to scale up their efforts to contribute online content repositories in the public domain. It should be made compulsory for all Institutes of Eminence and NAAC A++ graded HEIs, as well as NIRF top 50 universities to create a minimum of 50 online courses each within two years. The complete study materials of these courses including the video recordings should be made freely accessible to the public at large. Companies should be encouraged to use a good amount of their CSR and other funds to adopt schools and colleges with poor infrastructure and also set up a large number of scholarships for needy students," Goel added.
With a shift to faceless assessments over the past two or more years, taxpayers have been facing practical difficulties in obtaining the orders giving effect to appellate orders, which in turn impacts their receipt of refunds determined, if any. (Representational image via Unsplash)
The Finance Ministry has indicated that India is on track towards meeting the targeted fiscal deficit of 6.4% of GDP for FY 2022-23, given higher tax revenue buoyancy.
While this is good news, there remains much to be done in terms of strengthening tax revenues. India’s tax-to-GDP ratio stands at 10-11%, which is significantly lower than the average of other emerging economies where it is 21% of GDP, while the corresponding ratio for OECD nations is 33%.
Against this background, one may expect the upcoming Budget to continue its focus on fiscal consolidation through increased tax revenues. Fiscal consolidation, coupled with simplification and rationalisation may be the overarching themes of this Budget.
Union Finance Minister Nirmala Sitharaman before presenting the Union Budget in New Delhi last year. (Express Photo by Tashi Tobgyal)
On February 1, Finance Minister Nirmala Sitharaman will present the Union Budget for the next financial year (2023-24). Given that the next general elections will be in early 2024, this Budget is likely to be the last full-fledged Budget for the current government. As such, the economics of making a budget might also have to reconcile with the politics around it.
Be that as it may, here are some of the fundamentals of budget-making that one needs to know before the Union Budget is presented. Familiarity with the nuts and bolts of how a budget is prepared will help readers to see the Union Budget in perspective.
The upcoming Union Budget before the general elections of 2024 will be important. So will the stance of the Central Bank with inflation remaining a concern. (Express Photo via Praveen Verma, left, Reuters photo, right)
In many ways, 2022 was a tumultuous year. Beginning with the Russian invasion of Ukraine, to central banks raising rates aggressively to tackle inflation, to the horrific wave of the pandemic that is now unfolding in China, the economic fallout of these events has been severe.
Global growth prospects have been steadily downgraded as the year progressed. So, what are the four things to look forward to next year? What will be the trajectory of interest rates both globally and domestically? What are the prospects for the Indian and the global economy? We explain
Lower growth rate comes with several associated risks. For one, it will make the already uncomfortable levels of joblessness in the country worse. (Reuters, file)
Official data has showed retail inflation grew by 5.7% in December — the fourth successive month when retail inflation has moderated. This was seen as a relief, given that inflation was the biggest economic story of calendar year 2022. The elevated inflation levels robbed people of their purchasing power and worsened India’s trade deficit, which resulted in India’s currency becoming weaker and the RBI losing significant forex reserves as it tried to stem the rupee’s slide.
But Does that mean inflation has been tamed now? Why is economic growth a bigger worry this year? We answer your questions on inflation and growth
According to news agency PTI, the government is unlikely to announce capital infusion for public sector banks (PSBs) in the upcoming Budget as their financial health has improved significantly and they are on track to earn a combined profit of Rs 1 lakh crore. Their capital adequacy ratio is much above the regulatory requirement and varies between 14-20 per cent.
Meanwhile, Ernst & Young (EY) said Sunday that the government is expected to provide a more rationalised TDS framework to reduce the compliance burden for taxpayers, besides a revamped new concessional tax regime by providing additional benefits like the standard deduction. The Budget wishlist of EY also highlights that the government should provide some respite to low- and mid-income taxpayers with annual income up to Rs 20 lakh on the personal income tax side.
