Budget 2023 Expectations Highlights: The Union Budget for financial year 2023-2024 is set to be presented in the Parliament by Finance Minister Nirmala Sitharaman on February 1. This is the Finance Minister's fifth straight Budget speech and like the previous two will shirk the paper format for digital medium. Notably, this is also the last full Indian Budget before the General Elections in 2024. Most experts believe Budget 2023 will take a balanced approach towards fiscal consolidation and economic growth while focusing more on capital expenditure on infrastructure (including defence, railway, roads, etc.), widening production-linked incentive schemes for more sectors, boosting rural demand and divestment targets. Any tweak to capital gains tax or its tenure structure would also be keenly watched by the Street.
Here are the common man's expectations from the Union Budget 2023-24
The common man is worried about inflation because of a looming global economic slowdown and a potential resurgence of Covid-19. Layoffs and slowdown in US and Europe is keeping the mood of the nation cautiously optimistic. People expect a rise in the basic exemption limit in income tax.
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ICEA wants rationalisation of duties on parts, components of mobile phones, sub-assemblies
As part of its wishlist for Budget 2023, India Cellular and Electronics Association (ICEA) said it wants rationalisation of duties on parts and components of mobile phones and sub-assemblies.Some of the smaller tariffs should be done away with, the industry body said, while addding that all inputs duties on "mechanics"should be removed.
The Basic Customs Duty (BCD), levied on high-end phones, should also be eased, ICEA suggested. The customs duty of 20 percent, charged on high-end phones, should be continued only with a cap of Rs 4,000 per device, it demanded, as per a PTI report.
How "Housing for All" may be accomplished in upcoming Budget
- Neeraj Bansal, co-head and COO-India Global, KPMG India, said the Credit Linked Subsidy Scheme (CLSS), which has benefitted 2.54 million, should be maintained in order to encourage consumers to buy affordable homes.
- Bansal also said the price cap of affordable housing requires a revision to further attract a broader spectrum of homebuyers.
- More tax breaks are specifically required from the perspective of the buyer, he said.
- The government should think about reintroducing the Section 80IBA registration deadline for affordable housing projects, benefitting builders, he added.
- Bansal also said in order to lower the rising cost of raw materials, which will assist to moderate prices, the budget can also take into account rationalising the goods and services tax rates for construction materials like steel and cement.
- Another suggestion includes the overall size of the Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects (SWAMIH) fund, established under the Special Window for Affordable and Mid-Income Housing, can be increased to Rs 50,000 crore.
Govt may announce measures in Budget to further strengthen startup ecosystem
The government is expected to announce in the forthcoming Budget steps to further strengthen the startup ecosystem in the country and address inverted duty issues in certain sectors to promote domestic manufacturing, official sources said.
Fiscal incentives under the production linked incentive (PLI) scheme to some more sectors are also likely to be announced in the Budget, which will be presented on February 1.
Besides, the government may consider providing funds to infrastructure projects approved by the Network Planning Group (NPG), constituted under the PM Gati Shakti initiative, they said.
How the Budget 2023 can strengthen the fintech industry
- Thefintechsector's wish list for Budget 2023 includes tax incentives, regulatory clarity regarding acceptable business models in the Web3 platform, and loosening of restrictions on merchant discount rates.
- Tax incentives for businesses that support the digitization of financial services.
- Tax incentives associated to mergers and acquisitions (M&A) might result in the consolidation of a highly fragmented industry.
- Relaxed rules around Merchant Discount Rate (MDR)
- Tax benefits for Web3 based platforms would prevent the brain and capital drain that has recently been observed in digital assets, non-fungible tokens, and the Web3space.
-Synchronisinglegal framework for data privacy across different regulatory authorities to support efficient compliance
Budget wishlist: ICEA for rationalisation of duties on parts, components of mobile phones, sub-assemblies
India Cellular and Electronics Association (ICEA)has batted for rationalisation of duties on parts and components of mobile phones and sub-assemblies, saying some of the smaller tariffs should be done away with, while all inputs duties on ‘mechanics’ should be removed immediately.
The industry body has also suggested that the government should ease the Basic Customs Duty (BCD) on high-end phones.
The 20 percent customs duty on high-end phones should be continued only with a maximum BCD pegged at Rs 4,000 per device, the association has said in its Budget wishlist.
IMA puts forward demands to govt ahead of budget presentation
The funds for the Ayushman Bharat Pradhan Mantri Jan Arogya Yojna (AB-PMJAY) should be used exclusively for the private sector for strategic purchase and creating a retainer system and not for critical gaps in the funding of government hospitals, the IMA has suggested.
In its proposal to the government for consideration in the upcoming Union Budget, the Indian Medical Association (IMA) has said deficit funding is the most important cause behind the lack of penetration of the AB-PMJAY.
If the funding has to be raised to at least the CGHS (Central Government Health Scheme) level, then the amount required is around Rs 1.6 lakh crore, the doctors' body said.
Budget 2023 Expectations Survey: What the market thinks about increase in capex
Sectors like infrastructure, railways, defence, public sector undertakings, and renewables are expected to witness an increase in spending by the government.
US venture capitalists seek growth in the startup industry
-Multiple US venture capitalist firms with their investments in India haveexpectationsfrom the upcomingUnion Budget of growth and development of the startup ecosystem in the country.
-ArunKumar, the managing partner of Celesta Capital says, “As a US-based venture capital firm investing in India, we are keenly interested in policies and initiatives that will support the growth and development of the startup ecosystem in the country.”
-“Signals and allocations in the Budget that further the growth of new ventures based on innovation and entrepreneurship would be particularly welcome,” Kumar said.
Budget 2023: Rejig of tax slabs to be expected in Budget 2023
-The Finance Minister might rejig the tax slabs in the upcoming Union Budget of 2023, which may hint of a gradual movement towards an exemption-less tax regime in future.
-Multiple experts have demanded the inclusion of standard deduction as well as housing loan interest in this new regime.
Budget 2023 Expectations Survey: What the market thinks about divestment target
With the mop-up falling short this year, the Indian government is seen setting a conservative divestment target for fiscal 2024. The Indian government has set a divestment target of Rs 65,000 core for 2022/23.Read the full report here
Briefcase to ‘bahi khata’ to tablet: A short history of Budget presentation
For years, finance ministers in India were photographed walking into parliament with a briefcase before the annual Budget presentation. All that changed in 2019, when Finance Minister Nirmala Sitharaman ditched the Budget briefcase for a bahi khata. Read the full story here
What are the trading opportunities around Union Budget Day?
-Budget Day can be tricky for a trader. It offers opportunities, but with the volatility that can strike during the finance minister’s speech, there is high risk too.
-In an interview with Moneycontrol, veteran trader Manu Bhatia shares how he strategises for Budget Day.
-Markets will not give a very big move a day before the budget because of the uncertainty (of what will unfold). Generally, we will not get a directional move on the previous day and there are no real trading opportunities from an options perspective, he says.
We need to have a budget which is much more focused on capital investment and infrastructure investment: USISPF CEO
-India is the chair of the G20, India is the fastest growing economy in the world today and there is a global disruption in supply chain. So that means it is an opportunity for India to target at least $100 billion FDI in this year itself. So that means we need to have a budget which is much more focused on capital investment and infrastructure investment. So what we are looking for is a budget which is lot more focused on growth for the next 10 years,” Aghi said.
The country has the potential to target $100 billion in FDI by 2023: USISPF CEO
-The US-India Strategic Partnership Forum (USISPF) has a few expectations from the Finance Ministry, thus Union Budget. These include the promotion of digital payments, reforms in healthcare and insurance segments, and lastly, some simplification in foreign investments.
-Mukesh Aghi, President & CEO of USISPF, believes that India has a significant opportunity to attract foreign investment in the coming years. He notes that the country has the potential to target $100 billion in FDI by 2023 but emphasises the importance of a budget that is "micro-focused" on capex and infrastructure spending in order to achieve this goal.
(CNBC TV-18)
Budget 2023 might lay emphasis on renewable cycling, says Attero Recycling CEO
-Running on a path to low carbon development due to previous budgets, Budget 2023 comes at a time when the country is falling behind on its first green goal. This goal comprised of the installation of 175 gigawatt of renewable capacity by th year 2022.
-Pinning hopes on Union Budget 2023 to push the country into its deepest greens, Nitin Gupta, Co-Founder and CEO of Attero Recycing stated that he expects emphasis on circular economy and renewable power.
-"Given the fact that India has taken a very aggressive target for carbon neutrality and aims to achieve it by 2070, we expect this budget will place a lot of emphasis on carbon technologies or climate change directly or indirectly. So we expect a lot of emphasis on circular economy, renewable power and recycling. We also expect recycling sector to be declared as priority lending sector. There is likely to be an announcement on PLI scheme for Lithium Ion Battery recycling. So those are some of the things that we expect from this budget," Gupta said.
(CNBC TV18)
CII President hopes for boot in demand through Budget 2023
-Placing its recommendations for the Finance Ministry ahead of the Union Budget, the Confederation of Indian Industry. From the standpoint of economic policy, they stated that the primary emphasis should be laid on revenue augmentation as well as growth strategies.
-Speaking to CNBC-TV18, Sanjiv Bajaj, President of CII expressed that the mood in the market is cautiously optimistic, with a sense of hope that the Budget will consolidate the issues faced by the economy and take it forward.
Union Budget 2023: 5 times finance ministers quoted poets and writers
-Budget speeches in the past have extended up to nearly three hours. On many occasions, finance ministers added colour to them, by including poetry and quotes from famous writers.
-Manmohan Singh quoted iconic French writer Victor Hugo in 1991, while talking about India's economic potential.
"Victor Hugo once said, “no power on earth can stop an idea whose time has come.” I suggest to this august House that the emergence of India as a major economic power in the world happens to be one such idea," Singh spoke. "Let the whole world hear it loud and clear. India is now wide awake. We shall prevail. We shall overcome."
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Union Budget 2023: US industry urges FM to rationalise, simplify direct and indirect taxes in India
-Ahead of the annual budget presentation, an India-centric top US strategic and business advocacy group has urged Union Finance Minister Nirmala Sitharaman to simplify and rationalise direct and indirect taxation system in India, a move it believes would increase the confidence of global investors and yield greater foreign direct investment.
-Direct taxes can be in the form of income tax, capital gains tax or securities transaction tax, while indirect taxes such as GST, Customs Duty or VAT are levied on all end-consumers to buy any goods or services.
Union Budget 2023: Anand Rathi of Anand Rathi Group on PLI
In recent years, the PLI (production linked incentive) programme has been one of the most innovative industrial policies. The measures aim to transform India into a global manufacturing hub that meets both domestic and international demand. Through this programme, the government attempts to compensate Indian producers for higher production costs in certain areas (such as energy, interest rate, transportation and various operating costs).
On the longer term, structural reforms to improve the production process's efficiency are the solution to the current inefficiencies. In the short to medium term, compensation to producers through the PLI scheme can have a significant positive impact on the Indian manufacturing industry.
Therefore, I anticipate the upcoming federal budget to address how to strengthen the PLI scheme by bringing more industries within the scope of the policy and increasing the scheme's allocation.
Budget 2023: Sops like hike in standard deduction, rise in cap for Section 80C on the cards
There could be sops that will benefit a larger section of the middle class in Budget 2023. Buoyed by the recent statement of finance minister Nirmala Sitharaman that she too belongs to the middle class and understand the pressures faced by them, experts feel that the last full Union Budget could help the segment as it deals with price rise and job cuts.
The finance ministry is looking into proposals sent by various government departments on specific steps which may be announced in the Budget, benefitting a large section of the middle class, sources said.
Besides tinkering with exemption limit and standard deduction, the finance ministry is also looking at the possibility of increasing limit under 80C which includes investment in life insurance, FD, bonds, housing and PPF, among others.
Payment towards medical insurance premium is also being looked at, sources said, adding, the government may simplify capital gains tax rules to benefit the middle class investors which have started investing in capital markets.
Budget 2023: Build new cities, it is what our future demands of the present
By 2051, India may have an additional 335 million urban population. Several new cities will be needed to settle them, writes TK Arun.
He notes that India needs more than a pat on the back from fiscal-deficit-focused rating agencies and analysts, in order to regain economic vigour in a slowing world. A whole lot more. India needs a new New Deal, and, in the present national and global context, that would mean investing in a large project that creates demand for material and machines produced in India and for lots of labour, both skilled and unskilled, while adding to India’s future productive capacity. Building a new city is a good choice.
Read full opinion here
Daily Voice | Five sectors may get most weightage in Budget 2023, says Chairman of Anand Rathi Group
Anand Rathi of Anand Rathi Group anticipates the upcoming Union Budget will address how to strengthen the PLI scheme by bringing more industries within the scope of the policy and increasing the scheme's allocation.
He hopes that the Budget will emphasise the ecosystem of alternative energy, high-tech industries, infrastructure, digital technology, and the hospitality industry.
In India and around the world, the founder and chairman of Anand Rathi Group believes, the highest inflation rates have passed. He anticipates that inflation rates in 2023 will be lower than what is anticipated.
Unless the growth rate decelerates more than anticipated in 2023, neither the US Federal Reserve, nor the RBI are likely to reduce interest rates, says the Chartered Accountant with over 53 years of diverse experience.
Paperless Budget: The features
- Traditionally for 40 years from 1980-2020, the printing press in the basement of North Block used to print all 14 Budget documents. From 2021, since the practice of a digital budget began, printed documents are bare minimum. Earlier, the documents were printed at Rashtrapati Bhavan, but this was shifted to a press on Minto Road in the national capital in 1950 after documents were leaked, and in 1980 to North Block.
- After swapping the briefcase for a bahi khata in 2019, Finance Minister Nirmala Sitharaman used a hand-held tablet to read her last two Budget speeches. In 2022, she came to Parliament holding the gadget inside the red-coloured 'bahi-khata' cloth.
- Thus, all Budget related documents are now available on the website or app. The bilingual (English/Hindi) Union Budget Mobile App is available for download from Android and iOS platforms, and the Budget website www.indiabudget.gov.in. It is accessible to Members of Parliament (MPs) and the general public. Documents for the current Indian Budget will be available on February 1, 2023, as per the Finance Ministry
- The quick app upload has shortened the lock-in period to five days from two weeks.
Budget 2023: This Union Budget saw ‘Halwa’ ceremony return
As pre-Budget preparations reached the final stage, the ‘Halwa’ ceremony saw a comeback this year after being put on hold for the previous budget due to the COVID-19 pandemic. The annual ritual which heralds the Union Budget, saw Finance Minister Nirmala Sitharaman stir the kadhai to mark the tradition.
As part of the tradition, halwa is prepared in the basement of the North Block and served to those staff and officials of the Finance Ministry, who were involved in prepping the Budget. During the ceremony, Sitharaman also toured the Budget Press and reviewed preparations.
Post the halwa ceremony, officials are now in a ‘lock-in’ period within the North Block with a view to maintaining the secrecy around the final budget document. They will also emerge once the Budget speech is completed in the Lok Sabha on February 1. Notably, since taking the Budget digital this lock-in period has shortened from two weeks to five days.
Budget expectations: Gaurav Dua, Head of Capital Market Strategy at Sharekhan by BNP Paribas
"Higher allocation to capital expenditure; increase in allocation for PLI scheme to select manufacturing segments; higher MNGREGA allocation given the sluggish rural economy; changes income tax slab to provide relief to the middle class in an inflationary environment; and focus on the monetization of non-core assets of public sector and central government entities to invest in Railways and other logistics infrastructure are likely policy measures in the Budget 2023 to boost economic growth," Gaurav Dua, Head of Capital Market Strategy at Sharekhan by BNP Paribas said.
What the Budget 2023-24 entails?
Most experts believe the Budget will take a balanced approach towards fiscal consolidation and economic growth while focusing more on capital expenditure on infrastructure (including defence, railway, roads etc), widening production-linked incentive schemes for more sectors, boosting rural demand and divestment targets.
Any tweak to capital gains tax or its tenure structure would also be keenly watched by the Street.
Budget 2023-24: US pharma industry seeks R&D policy for India's pharmaceutical sector
Ahead of the Union Budget 2023-24, the US pharma industry has said that India should come out with a research and development policy for its pharmaceutical sector.
Karun Rishi, president of USA-India Chamber of Commerce (USAIC) expressed these thoughts:
- It is time that the government of India comes out with a research and development policy for the pharmaceutical sector
- In the BioPharma sector, the budget should aim to move up the value chain driven by research and development. Right policy push can provide India the fuel to become the R&D hub of the world.
- For national security and stabilising the global supply chain, the budget should incentivise R&D and manufacturing, especially enhancing API (active pharma ingredients) manufacturing in India.
- FM Sitharaman and her team should focus on growth strategies, increasing public expenditure on healthcare, capacity building, skills development and employment creation.
- Though challenging, the finance minister should stick to the fiscal deficit target. During COVID-19 pandemic, the Indian government gave the economy a much-needed capital expenditure push and doled out subsidies. This led to a rise in the fiscal deficit.
Budget 2023: Bibek Debroy hopes for move towards exemption-less tax system
Bibek Debroy, chairman of the Economic Advisory Council to the Prime Minister, had earlier also suggested that the upcoming Union Budget should incentivise taxpayers to move towards an exemption-less direct tax system. According to Debroy, the move would increase revenue, reduce compliance costs and litigation, and broaden the tax base.
“I think the big agenda on the direct tax side which is still pending is the removal of exemptions, both on the personal income tax side and the corporate side,” Debroy had said in an interview with Moneycontrol.
Union Budget 2023: Arvind Panagariya says time to simplify personal income taxation system, end exemptions
Ahead of the Union Budget 2023 scheduled to be presented on February 1, former Vice Chairman of Niti Aayog Arvind Panagariya expressed that it is time for the Finance Ministry to simplify the personal income taxation system and end exemptions.
In an exclusive interview with Moneycontrol, Panagariya suggested that the time is ripe for ending at least most of them, if not all, exemptions in personal income tax just as it has been done in the corporate tax. "It doesn't matter if revenue is the issue, they (the central government) can start out with 4-5 tax rates."
He suggested that the forthcoming Budget must try to overcome this and introduce a more effective exemption-free option with lower tax rates.
How Budget 2023 could accelerate India’s transition to a greener economy (3/3)
- Green bonds: In the last Union Budget, the government announced plans to issue the first SRGB. In November, the country’s final framework for sovereign green bonds was approved, which sets forth the obligations of the government of India as a Green Bond issuer. The RBI has also already said that there is also no foreign investment cap on the SRGB.
- Conservation: In Budget 2022, the budget for biodiversity conservation was slashed from Rs 12 crore to Rs 8.5 crore. In light of India's climate and biodiversity commitments at COP27 and the UN Biodiversity Conference in 2022, experts hope Budget 2023 will address this deficiency.
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How Budget 2023 could accelerate India’s transition to a greener economy (2/3)
- Mission Life: In 2022, Prime Minister Narendra Modi launched Mission LiFE (Lifestyle for the Environment). LiFE is expected to be a big priority in the coming year too, with the government focusing on how to roll out this mission in the next two years or so. To this end, specific outlays for different ministries could be announced to ensure effective on-ground implementation.
- Electric vehicles: Another area that will be in focus is clean mobility, particularly electric vehicles (EV). While there needs to be a policy push to create an efficient indigenous EV industry, the Union Budget may drive adoption by offering incentives such as faster tax depreciation for electric vehicles and charging infrastructure.
- Green hydrogen: To this end, climate financing and mobilising more resources by increasing allocation in the PLI schemes for boosting the domestic manufacturing of green hydrogen and sustainable solutions could be announced.
How Budget 2023 could accelerate India’s transition to a greener economy (1/3)
At COP27 in 2022, India reinforced its earlier commitments to support the target of 500 GW from non-fossil-fuel sources by 2030. To this end, expectations and hopes from the Union Budget 2023 are aplenty for a strong focus on green energy, and a greater thrust on climate action and sustainability. Expected are:
- Expansion of PLI schemes: The upcoming budget could see the announcement of PLI schemes that turn India into a green energy hub for domestic adoption and exports. Experts expect PLIs in advanced chemistry cell battery storage and for manufacturing of electrolysers.
- Carbon market: With climate change top of mind, countries and businesses the world over are setting up a roadmap to achieve their net-zero goals. An announcement on a national carbon market is expected this time around, which could facilitate India’s transition to a more energy-efficient economy with reduced emissions.
- Renewable energy: The upcoming budget is likely to focus on strengthening the institutions, frameworks, and financial incentives on meeting overall RE targets. As per the CareEdge report, Budget 2023 will include: “a push towards investments in storage technology, green hydrogen and pumped hydro to enable scaling up of RE capacity.”
Union Budget 2023: The market mayhem last week
The market succumbed to major selling pressure on January 27, with the benchmark indices falling nearly 2 percent despite a positive trend in global peers, as participants turned cautious ahead of key events next week – Union Budget 2023 and the US Federal Reserve meeting.
Bears took a strong lead for a second consecutive session, which resulted in a loss of Rs 11.75 lakh crore of wealth during 2 sessions, as the BSE market capitalisation fell from Rs 280.39 lakh crore, to 268.64 lakh crore as of 14:46 hours IST.
At the same time, the BSE Sensex plunged 1.93 percent, or 1,160 points, to 59,045, while the Nifty50 tanked 2.1 percent, or 375 points, to 17,517.
The broader markets were also caught in the bear trap with the BSE Midcap and Smallcap indices declining 1.5 percent and 2.5 percent, respectively as breadth was largely in the favour of sellers. Nearly 5 shares declined for every share rising on the BSE.
All sectors, barring Auto, participated in the correction with Energy, Utilities, Oil & Gas, and Power indices being the major losers, falling 6-7 percent. Bank, Capital Goods and Commodities were down between 2 percent and 3 percent.
Most experts feel this is a general trait of the market wherein it drastically corrects before the Budget, followed by a sharp recovery post Budget. Hence, we need to closely watch the market mood going ahead.
Pre-Budget bloodbath sees wipe out of Rs 12 lakh crore investor wealth
The market succumbed to major selling pressure on January 27, with the benchmark indices falling nearly 2 percent despite a positive trend in global peers, as participants turned cautious ahead of key events next week – Union Budget 2023 and the US Federal Reserve meeting. Bears took a strong lead for a second consecutive session, which resulted in a loss of Rs 11.75 lakh crore of wealth during 2 sessions, as the BSE market capitalisation fell from Rs 280.39 lakh crore, to 268.64 lakh crore as of 14:46 hours IST.
Budget 2023: US venture capitalists hope India's Budget supports growth, strengthens start-up ecosystem
US venture capital firms investing in India are expecting the Union Budget 2023 to support the growth and development of the start-up ecosystem in the country, according to a top investor.
Ahead of the scheduled Budget, venture capitalist community 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. Kumar served as assistant secretary of Commerce for Global Markets and director general of the US and Foreign Commercial Service (USFCS) during the Obama Administration.
"We are eager to see in the Budget, the government's continued commitment to fostering a business-friendly environment that encourages foreign investment and supports the growth of new and emerging companies, including in the deep-tech space. The geopolitical scenario and the pandemic induced the need to diversify supply chain sources and present India with an opportunity to enhance its participation as a trusted node in global value chains," he said.
LIVE:
Good morning and welcome to Moneycontrol's LIVE coverage ahead of the Union Budget 2023 scheduled on February 1. Stay tuned to find out all that the sectors expect from Finance Minister Nirmala Sitharaman's 'bahi khata'