Why the Union Budget will be a turning point for the infrastructure sector
Union Budget 2022Why the Union Budget will be a turning point for the infrastructure sector
To keep the economic wheel rolling, all eyes are now set on the government’s Union Budget for 2022-23. Policies, incentives and taxations announced during the budget session play a crucial role in the upliftment of sectors and in elevating their development. As the Indian economy deals with the ramifications of the pandemic and other external factors, necessary government measures can provide the much-needed respite.
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Expert insights from Union Budget 2022
With a vision to establish a trustworthy tax regime, the FM has proposed many changes such as the new concept of filing an updated return, litigation management to avoid repetitive appeals by the department, clarity on long pending issue of taxation of virtual digital, etc. These proposals will also impact a cross section of individual taxpayers.
Among other changes, reduction in surcharge for LTCG (unlisted shares, houses etc.) is a welcome step which will result in reducing the effective rate of tax on LTCG from 28.5% to 23.92% for all types of assets. Further, with an intent to provide relief to the those impacted due to Covid, all medical expenses and ex-gratia on death received from employer would be exempt. Also, benefit for deduction of insurance premium for disabled dependant has been expanded. The key miss in the Budget includes rationalisation of income tax slabs, hike in standard deduction, hike in section 80C limit, work from home tax benefits etc. which leaves common man’s expectations unfilled.
Overall, a balanced act with growth and stability as the underlying theme.
Akhil Chandna, Partner - Tax, Grant Thornton BharatThe Union Finance Minister has announced revamping of SEZ laws by replacing existing legislation with a new legislation to come into effect from September 2022. Automation and ease of doing business being key objectives, it has been proposed that SEZs would be completely automated in partnership with Customs Administration through ICEGATE portal. Further, to achieve operational efficiency, existing comprehensive check has been proposed to be replaced with risk-based approach for verification. While detailed roadmap for implementation is yet to be seen, these changes would go long way in boosting Indian economy and making India a globally competitive market.
Praveen Kashyap, Executive Director - Tax, Grant Thornton BharatThe government has laid down a strong growth path for the real estate sector. The various policy announcements, significant push toward affordable housing by allocating 48,000 crore and the ease of process related to approvals is a welcome move. Creation of a high-level committee of urban planners for urban planning and governance augurs well for the real estate sector going forward. Creation of unified logistics platform and grant of infrastructure status to data centres will provide impetus to commercial and industrial real estate.
Neeraj Sharma, Chartered Accountant, New DelhiBudget lays down the government’s high focus on tech and start-ups for creating a strong Digital India. The budget recognises the key role played by PE and VC investors and setting up of an expert advisory committee to study regulations is a welcome step. Finally, the extension of the incentive for start-ups by 1 more year as well as capping the surcharge for long-term capital gains is boost for the start-up community. The miss in my view is lack of mention around direct overseas listings and SPACs, which could have strengthened the access to capital for India Inc.
Raja Lahiri, Partner and TMT Leader, Grant Thornton BharatThe Budget focuses on long-term growth and envisions building a strong and bold economy with emphasis on domestic manufacturing, digitisation, rural upliftment and planned urbanisation. It also lays emphasis on fiscal deficit consolidation in the near future, on the basis of a continued strong economic recovery despite the ongoing pandemic. The tax proposals broadly follow the principles of consistency, with measures to reduce repetitive litigation and rationalisation of customs regime. The proposals for taxation of virtual digital assets will shape a new era of taxation regime around cryptocurrencies and similar investments.
Vikas Vasal, National Managing Partner - Tax, Grant Thornton BharatThe budget has announced tactical steps for the Indian automotive sector. The introduction of battery swapping policy towards energy transition and enabled charging infrastructure, opening R&D defense as growth area for auto component manufacturers, and focus on public electric vehicle (EV) transport are major resolutions. The offered Production-Linked Incentives (PLI) for manufacturing of solar panels would allow global competitiveness. Furthermore, the extended tax exemption to start-ups, prioritising employment generation with skill development, and increased de-carbonisation efforts would bring prominence to sector. Meanwhile, the sector was expecting a more consistent GST slab with EV financing and incentives, which was a miss. However, rural side reforms are a tremendous opportunity that can lead to an uptick in the low sales volume. The plan for national expressways would ensure better fuel efficiency and benefits to the commercial vehicle segments, which is further likely to increase investor, consumer and manufacturer confidence in the sector. This paradigm would need effective translation for a significant progress in putting Indian auto industry on the global map.
Saket Mehra, Partner and Auto Sector leader, Grant Thornton BharatBudget lays emphasis on long-term growth through capital formation, infrastructure development and digitisation, with emphasis on domestic manufacturing and supporting the rural economy. On the tax and policy front, rationalisation of Customs regime, fresh look at the SEZ policy and steps to reduce litigation on repetitive matters are welcome steps.
Vikas Vasal, National Managing Partner - Tax, Grant Thornton BharatOverall, a very consistent and simple budget with 100% directional alignment to last year's budget focus on building #TRUST. This shows the long term focus of the government versus too many changes whilst keeping the option of announcing reforms throughout the year. No one can complain that commitment to predictability, reducing ambiguity and litigation has not remained a steady focus.
Vishesh C. Chandiok, CEO, Grant Thornton BharatDigital banking has changed the economic landscape of the country. The existing network of post offices across the country being enabled with banking capabilities will play a vital role in the county’s journey towards becoming a USD 5 trillion economy.
Ravinder Reddy, Partner, Grant Thornton BharatEntire digitisation of highways, roadside assistance, travel services and providing services, such as charging stations for EVs, will improve opportunities for multiple segments of the Automobile, power, tourism and technology sectors.
Shree Parthasarthy, Partner, Grant Thornton BharatThe Finance Minister walks into the Parliament holding the budget in a digital format and will be tabled in the Parliament via a tablet. Such small changes foster the confidence of the economy and the citizens in the government’s commitment towards moving to a digital economy and use of technology for good governance.
Ravinder Reddy, Partner, Grant Thornton BharatExpect #Budget2022 to continue path from 2021 – reforms, disinvestment, increase in infrastructure and healthcare spend and largely status quo on tax rates with one exception of basic exemption or INR 10 lakh slab for 30% to be increased.
Vishesh C. Chandiok, CEO, Grant Thornton Bharat
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Pre-budget expectation survey reports
Automotive sector
Union Budget 2022To gauge the market sentiments and better understand the expectations from Union Budget 2022, Grant Thornton Bharat conducted a pre-budget survey for auto sector.
Banking, Financial Services & Insurance Sector
Union Budget 2022Detailed insights from the pre-budget expectation survey conducted for the BFSI sector
Consumer and Retail sector
Union Budget 2022To gauge the market sentiments and better understand the expectations from Union Budget 2022, Grant Thornton Bharat conducted a pre-budget consumer and retail sector survey.
Healthcare Sector
Union Budget 2022To gauge the market sentiments and better understand the expectations from Union Budget 2022, Grant Thornton Bharat conducted a survey for healthcare sector.
Pharmaceutical sector
Union Budget 2022To gauge the market sentiments and better understand the expectations from Union Budget 2022, Grant Thornton Bharat conducted a survey for pharma sector.
Real Estate and Infrastructure sector
Union Budget 2022To gauge the market sentiments and better understand the expectations from Union Budget 2022, Grant Thornton Bharat conducted a pre-budget survey for Real Estate and Infrastructure sector.
Technology and start up sector
Union Budget 2022To understand the expectations from Union Budget 2022, Grant Thornton Bharat presents a pre-Budget survey report for the Technology and Start-up sector.
Tax
Union Budget 2022Grant Thornton Bharat conducted a survey to gauge the market sentiments and better understand the expectations on tax from Union Budget 2022.
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