It is that time of the year when Union Budget activity accelerates, and everyone starts jotting down their wishlist. What would Budget 2023 bring? Watch out for more updates.
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Expert insights from Union Budget 2023
Budget 2023 lays emphasis on economic growth through capital expenditure, all round inclusive development, continuous policy and administrative reforms, a supportive business environment and reducing the tax outgo for individual taxpayers. It also sends a strong signal to the global investment and business community by reiterating the government’s position on containing the fiscal deficit.
Vikas Vasal, National Managing Partner - Tax, Grant Thornton Bharat
Once again, simplicity, consistency and alignment are the themes of Budget 2023. Fiscal prudence, capex focus & consumption boost, inclusive growth, and technology and trust based governance were some stand-out themes throughout. Whilst misses around capital gains rationalisation, long-term extension of 15% rate for new manufacturing units, PLI extension, and service exports incentives will be called out by experts, the government has made it clear that Budget day isn’t the only day for this. I continue to maintain that perhaps 31 Jan Economic Survey day should now be the focus and not 1 Feb Budget day, as we gain pace heading into #AmritKaal from this year.
Vishesh C. Chandiok, CEO, Grant Thornton Bharat
Budget 2023 is a capital investment-oriented budget with a steep increase of 33% to INR 10 lakh crores. While the budgeted expenditure for healthcare continues to be at a similar level, we hope that the healthcare sector also benefits from the enhanced capital outlay. The Budget focuses on improving health outcomes through multifaceted interventions with the underlying theme of inclusive development - Sabka Saath Sabka Vikaas. 157 nursing colleges will improve the nurse-population ratio, a step in the direction of Universal Health Coverage. Digital innovation-oriented initiatives such as setting up three Artificial Intelligence Centres of Excellence, 100 labs to develop 5G solutions, and ICMR labs access to the private sector for medical research will improve accessibility in rural areas and bring down the cost of healthcare. The mission to eliminate sickle cell anaemia and the impetus to nutrition (Shree Anna programme) and sanitation will improve public health and ease the pressure on curative health infrastructure. Further, an integrated and innovative approach for tourism for 50 destinations will also promote medical tourism.
Bhanu Prakash Kalmath S J, Partner and Healthcare and Lifesciences Leader, Grant Thornton Bharat
The budget proposal on the personal tax front focuses on the rationalisation of tax rates and slabs under the new tax rate regime. This will largely benefit taxpayers who are not currently claiming standard deduction and deductions for investments under the popular section 80C. A large segment of salaried taxpayers claiming a deduction for HRA, LTA, and other deductions for health insurance premiums, interest on education loans, etc. would still be better off under the old tax regime. Further rationalisation in the new tax regime would be required to encourage the complete move from the old tax regime to the new tax regime.
Akhil Chandna, Partner, Tax, Grant Thornton Bharat
Economic empowerment of women, formation of large producers enterprises as well as focus on the development of handicrafts in rural areas will help in economic development, push rural consumption and be beneficial for consumer companies. Agriculture accelerator funds will bring innovative and affordable solutions for farmers, and PPP for sustainable cotton and high-value horticultural crops will promote sustainable fashion.
Naveen Malpani Partner and Consumer Leader, Grant Thornton Bharat
Inclusive growth is steering the wheel this budget. Support through agriculture accelerators and SHG for women will help create rural unicorns, boost entrepreneurship and also positively impact the social structure. With focus on infra, digital infrastructure to be developed for farmers for better crop planning and credit and insurance. PACS and Multi Purpose Co op Credit Societies (MACS), extensively supported, will facilitate decentralized storage and provide a range of services. New sub scheme in PM Matsya Sampada yojana will support micro fisheries initiatives.
Padmanand V, Partner, Public Sector Consulting, Grant Thornton Bharat
The use of public digital infrastructure for Agri sector under an open source standard will create a huge momentum and catalyst for growth. The next wave of technologies like 5G, Web 3.0 and Metaverse will further accelerate it and contribute an additional percent to our GDP growth. The digital infrastructure for agriculture and farmers, ranging from supply chain to analytics, will transform the entire agri value chain and make it more robust and productive.
Deepankar Sanwalka, Partner, Grant Thornton Bharat
The Budget recognizes the importance and impact of Indian start-up eco-system which is now the 3rd largest globally and provides boost by focus on new age tech like AI and IoT through creation of AI labs, addressing the ease of doing business by reducing regulatory compliances, the extension of tax holiday as well as carry forward of losses from 7 years to 10 years provides benefit for start-ups. Moreover, the creation of Agriculture Fund would be a boost for agri-tech start-ups and takes the start-up story beyond cities and would provide inclusive growth for start-ups. Capital gains tax rationalisation for unlisted equity with listed equity could have been a boost for start-up investors.
Raja Lahiri, Partner and TMT Leader, Grant Thornton Bharat
The strong infrastructure focus of the budget, will need a strong backbone in the form of robust financial services. The initiatives around skilling, AI, 5G, Digilocker, simplified KYC, continued fiscal support for UPI infra, municipal bonds, scheme to reduce interest cost by 1% for MSME, set up of Data Embassy and ease of regulations for Gift City, will contribute significantly towards strengthening the financial services system to facilitate an all inclusive growth for the country.
Vivek Ramji Iyer, Partner and National Leader Financial Services, Grant Thornton Bharat
While the budget did not have a major direct announcement for the real estate sector, however there have been some encouraging announcements around PMAY, creation of urban Infra fund. Enhancement of allocation towards PMAY augurs well for boosting affordable housing. The overall increase in the capex for Infrastructure development being 3.3 percent of the overall GDP, will impact overall development of real estate.
Sumeet Abrol, Partner, Grant Thornton Bharat
The budget 2023 has exceeded our expectations on the announcements for the infrastructure sector by frontloading the expenditure at a time when India is accelerating its growth track. The increased capital expenditure budget of Rs.10 lakh crore aims at creating a multiplier effect in creating demand, more jobs, long term capacity for growth and most importantly, increasing private sector investment in infrastructure. Private investment in the sector is expected to increase with an enabling financing framework to be developed by the Infrastructure Finance Secretariat especially in roads, railways, urban infrastructure and power sectors. The most awaited thrust for urban sector has been announced and the creation of an Urban Infrastructure Development Fund will increase private sector interest for accessing borrowing. Encouraging ring fencing of user charges of urban services, will not only increase momentum in the municipal bond market as the credit worthiness of the Urban Local Bodies (ULB) will improve, but in addition ULBs can now accelerate PPP projects.
Padma Priya J, Partner, Public Sector Consulting, Grant Thornton Bharat
Clearly, 2023 Budget has been focussed to boost Green Energy Transition by highlighting "green growth" as one of the priorities this year. While the National Green Hydrogen Mission with annual production target of 5 MMT by 2030 and outlay of INR 19,700 crore shall facilitate transition of the economy to low carbon intensity and reduced dependence on fossil fuel imports, additional INR 35,000 crore has been allocated for priority investment towards energy transition, net-zero objective. Further, Battery energy storage systems shall be supported with viability gap funding. Also, Inter-state transmission system for evacuation, grid integration of 13 GW of renewable energy from Ladakh shall be constructed with investment of INR 20,700 crore. All these are welcome steps and clearly demonstrate the Government seriousness to achieve net zero goal by 2070.
Dinesh Anand, Partner, Grant Thornton Bharat
Budget 2023 appears to be a well-balanced and pragmatic one that lays foundation on previous years’ budgets and provides a blueprint for India@100. Continuing with the themes of Atmanirbhar Bharat and Make in India, the government has introduced further measures and changes in customs duty (upward and downward) to promote domestic value addition and encourage use of green energy. Key proposals under GST include non-availability of ITC of CSR expenses, wider scope of OIDAR services, decriminalisation of certain offences and streamlining of returns, amongst others. Additional announcements towards PLI 2.0, GST dispute resolution and GST rate rationalisation, during course of the year, would further fuel economic growth and lead to better tax governance.
Krishan Arora, Partner - Tax, Grant Thornton Bharat
The Times of India / 19 Dec 2022The government can look to rationalize multiple GST rates into a simple three-rate GST structure: low (for essentials), standard (for most of the products) and high (for demerit and luxury goods) and lower the peak rate of 28%.
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