Push for infrastructure development will have cascading impact on industrial sectors including Electrical & Electronics, Automotive, Industrial Machines, Pharma, Chemicals, Textiles and Apparels: Sushil Pasricha, Partner at Bain & Company
Finance minister in the Budget 2023 announced the highest ever proposed capex of INR 10 lakh crore in FY24 (3.3% of GDP); this push for infrastructure development will have a cascading impact on industrial sectors including Electrical & Electronics, Automotive, Industrial Machines, Pharma, Chemicals, Textiles and Apparels. This would further propel employment and assist in manufacturing taking center stage in the Indian economy."
Increase in capex on infrastructure and emphasis on green growth will help mobility sector: Sudarshan Venu, MD, TVS Motor Company
“The increase in capex on infrastructure and the emphasis on green growth will help the mobility sector. This budget gives something to everyone - from rural India, start-up India, middle class India, to digital India - it is about inclusive growth and building on the recovery we are seeing after the pandemic. It strikes a fine balance between growth and fiscal prudence.”
Easier KYC norms, expansion of DigiLocker services, overall impetus on digitalisation and last mile connectivity augurs well for financial services: Rishi Gupta, MD & CEO, Fino Payments Bank
“Looks like a pragmatic budget. Focus on rural economy, capex and infrastructure is expected to create jobs, push growth in transport and allied sectors, including banking. Easier KYC norms, expansion of DigiLocker services, overall impetus on digitalisation and last mile connectivity augurs well for financial services. With the new age banks at the forefront of taking the digital-led benefits to Bharat, we expect increased engagement and value creation for the masses.”
New slabs of taxes will further help boost economic parameters like consumption, thus providing more impetus to economic growth: Chandra Shekhar Ghosh, MD & CEO of Bandhan Bank
"Budget 2023-24 is a well-rounded progressive & inclusive budget. The focus on important parameters like boosting consumption and inclusion is a welcome measure for our growing economy. The government has laid an important thrust on Capital Investment which will enhance consumption and create employment, both of which have been important areas of attention, especially post the pandemic. Allocation of the Budget to PM Awaas Yojana will further boost the housing sector. Support to MSME sector along with enhancement of credit guarantee scheme will provide much needed relief to the sector. The new slabs of taxes will further help boost economic parameters like consumption, thus providing more impetus to economic growth."
FM has provided foundation for strong anti-cyclical momentum that should enable robust domestic economic growth and help counter the expected global headwinds: Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas
“By laying a significant emphasis on Capex and Energy Transition, the FM has provided foundation for strong anti-cyclical momentum that should enable robust domestic economic growth and help counter the expected global headwinds.
The focus on making India future ready by way of AI labs, Agri-tech, R&D in healthcare, further boosting Digital Public Infrastructure and holistically expanding physical infrastructure, auger very well for sustained long term economic growth."
Budget 2023 is progressive growth oriented budget which balances fiscal and lays foundation towards India being a $5 trillion economy by 2026 and developed economy by 2047: Yezdi Nagporewalla, Chief Executive Officer, KPMG
Private consumption and capital formation which have been facilitated by an effective vaccination policy has scripted India’s growth story in an otherwise turbulent global macro-economic scenario. Budget 2023 intends to fortify India as a key investment destination.
A significant increase of 33 per centin the capital investment outlay to 10 lakh crores, revamped credit guarantee to MSMEs, easing of the credit cycle and rationalization of custom duties would add significant impetus to capital formation and job creation.
The Green growth agenda of the Government, especially on energy transition seeks to consider the environmental impact of industrialization. Further, the increase of tax rebates and rationalization of tax slabs to individual taxpayers would ensure higher disposable income in their hands, consequently spurring domestic consumption. The agricultural credit target of 20 lakh Crores would also lay the direction of addressing food security concerns, while making India a key exporter of food products in the future.
Overall, Budget 2023 is a progressive growth oriented budget which balances the fiscal and lays the foundation towards India being a $5 trillion economy by 2026 and a developed economy by 2047.
Market was expecting further commitment to public capital expenditure from Govt and it has not disappointed: Suman Chowdhury, Executive Director & Chief Analytical Officer, Acuité Ratings & Research
Capital expenditure
"The market was expecting a further commitment to public capital expenditure from the Govt and it has not disappointed. The total CAPEX outlay in the Union Budget has been enhanced by 33 per centfrom 7.5 lakh crore to 10.0 lakh crore which takes it to an all-time high of 3 per centof GDP. This will not only give a boost to the infrastructure sector but also be positive for employment and growth."
MSME
"MSMEs are the backbone of the economy and they have been severely affected by the long pandemic. The government already had credit guarantee schemes for MSMEs which were scaled up in a big way during the Covid period. The budget has announced a revamp of the existing guarantee schemes and fresh allocation of Rs 9000 cr capital for such guarantee mechanism. This will facilitate an additional credit of Rs 2 lakh crore to the sector and provide relief to the smaller businesses which are yet to recover from the Covid stress."
Fiscal deficit
"In line with our estimates, the Government has projected fiscal deficit at 5.9 per cent, a 50 bps improvement over FY24. Further, a realistic target of 4.5 per centof deficit has been set for FY26 as a part of medium-term fiscal consolidation. This along with lower-than-expected gross sovereign borrowings in the next fiscal will be positive for bond yields and debt market sentiments."
Personal finance
"The rationalization of the personal income tax structure is expected to lead to two things (i) raise disposable incomes for the middle class and particularly younger taxpayers (ii) transition the taxpayers to the new tax regime with minimal exemptions and lower and simpler tax slabs. This is expected to give a moderate boost to domestic consumption."
This budget enables domestic consumption growth while boosting business & investment sentiment for corporates: Anmol Das, Head of Research, Teji Mandi
“As expressed in our Budget Expectations, the FM scored in both the economic expansion line as well as relieving common man with higher Personal Disposable Income in Hand. This budget enables domestic consumption growth while boosting business & investment sentiment for corporates.”
Boost to capex before the national polls is an indication Modi is focused on realizing his dream of making India a factory for the world: Anand Rathi, Founder & Chairman, Anand Rathi Group
"A 33 per centincrease in capital expenditure to 10 lakhcrore rupees, the highest ever will go a long way in building roads, ports, and airports — crucial for making India a reliable investment destination. Investment of Rs. 2.4 lakhcrore in Railways is commendable. Boost to capex before the national polls is an indication Modi is focused on realizing his dream of making India a factory for the world."
"The gross borrowing estimate of 15.43 trillion rupees for next year is lower than the survey estimates of 15.77 trillion rupees. Hopefully, that should cheer the bond markets. Net borrowing at 12.3 trillion rupees, however, is higher than the estimate. Need to see how much of that could be raised via green bonds. India’s maiden sovereign green bond issuance last month fetched a better-than-expected yield and the next tranche is planned for February9. FM has reduced the Fiscal Deficit target to 5.9 per centfor 23/24, which is a welcome move and should help in maintaining the interest rate lower."
Big boost to MSME’s with credit guarantee revamp scheme from April 1, 2023, with allocation of Rs 9000 crores: Lalit Kumar, Partner, JSA
“Financial Sector is amongst the seven priority sectors in Budget 2023. Year after year the Government has given impetus to the financial sector; and continuing with that commitment, big announcements are made in this year’s budget as well. Financial inclusion is again the focus this year. Big boost to MSME’s with credit guarantee revamp scheme from April 1, 2023, with the allocation of Rs. 9000 crores. Resulting in the cost of the credit to reduce by 1%, a big relief in the current inflationary conditions.
Another key update is ‘Public Consultation’, for all financial sector regulations. need of the hour with various divergent regulations of several different regulators. This will ensure ease of compliance and business.
Derivative instruments will now become valid. Currently, under the Securities Contract Regulation Act, a contract in the derivative is a void contract. A big relief for mergers and acquisition transactions going forward. More powers to SEBI to award degrees, diplomas for courses in securities market law."
The Budget should also provide some changes in the income tax structure. The tax rates have not been considered for revision since FY 2017-18: Yeshasvini Ramaswamy, Serial Entrepreneur & CEO, Great Place to Work®️ India
The upcoming Union budget will be the last full year budget from the present government and I do have high expectations from it. While India’s domestic growth projections looks promising, we are surrounded by geo political uncertainties, high inflation and slowing world economic growth. I am expecting the budget to incentivize employment generation both in formal and informal sectors as we need to make most of our demographic dividend. More measures to boost start-ups specifically in areas of agri tech, new age tech like IoT,AI, AR, energy and fin tech will continue. The start-up eco-system will definitely look forward to some bold measures around tax reliefs easing investments on growth funding and reforms to support Indian businesses go global.
With hybrid workplaces and the gig economy picking up, I am expecting some new legislation that may want to promote equitable practices. The four labour codes—the Code on Wages, Industrial Relations Code, Social Security Code and the Occupational Safety, Health and Working Conditions Code are set to replace the existing 29 labour laws. Over 90 per cent of India’s 50 crore workers are in the unorganised sector. And through these codes, the government will be able to ensure that all of them enjoy the benefits of labour laws related to minimum wages and social security. Despite the approval of these codes by the Parliament in 2020, many of the State Governments are yet to adopt the New Labour Codes. A few simplified mechanism needs to be included in the Budget for FY 2023–24 for the adoption of these codes.
The Budget should also provide some changes in the income tax structure. The tax rates have not been considered for revision since FY 2017-18 and this budget may be an ideal time for revisions that will enable more purchasing power and to provide some tax relief. The ‘middle class’ and the ‘lower middle class’ have been impacted to a large extent due to the impact of Covid-19 for two consecutive years and pursuant to the global inflation, conditions are difficult. Their expectations maybe the highest from the current dispensation. While India features among the higher category of a tax country, the follow through on social security still remains a long road to be travelled. India cannot progress and prosper without the meaningful contribution of its women. There has to be a course correction of many fronts and for me personally I will look forward to more protection, benefits for women employees and ease of legislation to promote women entrepreneurs especially the semi urban and rural areas of India with a specific call out to technology, energy and the agricultural sectors.
The middle class hopes for a rejig in the tax rates for relief from high inflation and rising interest rates. FM's success will depend a lot on how the global situation pans out Rahul K. Mishra | Professor - Strategy and International Business | IILM Uni
The Budget 2023 is challenging in many ways. This is a time for fiscal consolidation. The fiscal deficit is around 6.5 % of GDP at the Central government level and another 3.5% at the state level. This is way too high for the economy.
Given the higher subsidy bill for food and fertilizer, the government has not got much space and resources left in incurring more subsidies and programs. Capital expenditure will mainly come from the private sector.
Sustaining economic growth against the backdrop of global recession remains the foremost challenge. Exports are getting affected and the Current account deficit rising.
The middle class hopes for a rejig in the tax rates to get some relief from the high inflation and rising interest rates.
Finance Minister's success will depend a lot on how the global situation pans out. If the war in Ukraine comes to an end and the covid situation remains under control in China and other parts of the world, things may start to look up in India's economy.
In the end, high economic growth, low inflation rate, and higher job creation will determine the success of the economic policies and initiatives in the general budget.
It is imperative that the vision of long-term transition is embedded in the annual budgets: Dr Vibha Dhawan, Director General, TERI
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.
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