Budget 2023 will be growth-oriented, salaried class could get tax relief: A Balasubramanian of Aditya Birla Sun Life AMC

Aditya Birla Sun Life AMC's Balasubramanian expects govt to hike 80C limit to Rs 2,50,000.

The focus of Budget 2023 will be on growth and capex will be a primary driver as India's economy benefits from inflation not spiralling out of control owing to discounted oil prices and interest rates not affecting borrowers as much as they could, said A Balasubramanian, MD & CEO, Aditya Birla Sun Life AMC.

"This budget, my own belief is would be a growth-oriented budget, with reasonably good amount of money being allocated towards Capex, so called the capital expenditure, I think it will continue to remain very, very strong," he said in an interview with moneycontrol.

He said that the PLI scheme that the government rolled out to boost manufacturing has helped in India preparing well as the global shift happens in supply chains more commonly termed China plus 1.

He said that the Union Budget will help in boosting the confidence in the economy and also of the investors by making the right allocations that will drive India's economic growth.

The government has been ramping up capital expenditure in the last few Budgets in order to spur growth and crowd in private investment. Experts feel that the upcoming Budget won't let go of the momentum in spending on creating capital assets like roads, bridges, railway lines. Rural infrastructure could see a bump up in allocation by the government as it heads into an election in 2024.

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He expects that the Budget may not tinker much with the taxation aspect that could hurt the sentiment of the markets especially when capital flows to Indian equities are important and the private capex spending has to go up.

"if the contribution to the exchequer is not going to be significantly higher, I would assume they will not tinker with anything, which the marginal tinker with no significant impact for the government can only do damage to the market sentiment, which my own assumption is they will be looking at very, very carefully on these lines."

On direct taxes, he said that the government can give some relief to the salaried class that will help in increasing the disposable income leading to more spending.

He expects the limit under section 80C to go up to Rs 2,50,000 from the current Rs 1,50,000.

"The multiplier impact of any benefit that are given to the income tax payers, I think will be quite significant. So I think I would assume this budget, a government may consider some bit of tax benefits, either by tweaking section 80C, because 80C is the one where Rs. 150,000 is being saved now. The limit is actually all scheme put together is Rs. 150,000. So there's a high probability that Rs. 150,000 can go up to Rs. 250,000," he said."