Union Budget 2023 | What banking and finance sector expect from Budget

Union Finance Minister Nirmala Sitharaman on Wednesday presented the last full budget of the second term of the Narendra Modi government in Parliament. Here's how experts and industry insiders reacted to the Budget. Stay tuned to DH for the latest updates!

Affordable housing, commercial vehicles to get a boost, says InvestoXpert

“The 66% increase in allocation for PM Awaas Yojana to Rs 79,000 crore will give a further boost to Affordable Housing in the country. The move also seems positive for commercial vehicles used for moving materials for construction. The extension of CLSS will give the homebuyers the financial elbow room to make a purchase but a standard definition for 60m and 90m affordable homes would have given a bigger boost to the Real Estate Sector. Additionally, the personal income tax rebate limit increased to Rs 7 lakhs will lead to more disposable income allowing homebuyers to invest in their dream homes," saidVishal Raheja, MD, InvestoXpert.com.

Celesta Capital sees significant boost in job creation

“We foresee the Budget will yield significant benefits in job creation and in enhancing the country’s technological and competitive manufacturing capabilities, which are among the key drivers of India’s $5 trillion economy goal.

Indian tech start-ups will benefit from the government initiated investments in centers of excellence in AI, establishment of labs for 5G development, increase of investment in research in priority areas, and a keen focus on green growth and energy transition.

The Government of India's agriculture accelerator fund will encourage agritech start-ups by entrepreneurs in rural areas to advance innovative solutions for farmers based on technologies like AI, ML, IoT and AR/VR.

The significant increase in capital expenditures for infrastructure, especially transportation and logistics, will enhance the country’s competitiveness to become a major manufacturing node in global supply chains.

The government's continued focus on ease of doing business as well as specific proposals to enhance GIFT International Financial Services Centre (IFSC) capabilities will be attractive for foreign direct investors. These will help facilitate increases in venture capital investment; the availability of capital is a key factor to drive the growth of startups,” said Arun Kumar, Managing Partner of Celesta Capital.

'Need to spur investment of both govt & private sector to keep the economy on growth trajectory'

"In my view, the priority would be to ensure stability & growth in the system. Till recent past we had seen investment from government in capex as the major driver, but now private capex seems picking up but there is still a lot of potential. We need to spur investment of both govt & private sector to keep the economy on growth trajectory for a sustained period. Directionally, government can extend PLI scheme to more sectors. I also expect/hope to see an alignment on capital gains tax rates to ensure investments are chosen based on the merits of investment rather than tax advantages of asset classes. And introduction of new incentives to encourage domestic production targeting MSMEs would help us move towards becoming Atmanirbhar. This would promote domestic economy, employment and help us avoid importing of low value-add products. "Venkatraman Venkateswaran, Group President & CFO, Federal Bank

Need to implement progressive taxation policies, says CEO and Founder at CoinSwitch

"While last year’s union budget was about recognising cryptos, this year should be around refinement.We support the government’s intention to trace and tax cryptos. However, it is essential to implement progressive taxation policies. The absence of comprehensive regulations, which are at the intersection of user protection, supports legitimate Indian startups, and serves the requirements of the regulators, makes the mechanism counter-productive.That is what we are seeing in India right now. Implementing a 30% tax, 1% TDS and no provision to offset losses have decreased trading volumes. It is making the markets illiquid, and investor sentiment is running low. Such circumstances push consumers’ money offshore into the grey markets, exposing them to regulatory issues.India should incentivise users to stay within national jurisdiction by reducing the burden of taxes. If the TDS aims to establish a trail of crypto transactions, it can be achieved by a lower TDS rate of 0.1%. Similar to listed securities, existing provisions of capital assets should be made applicable for VDAs. Thirdly, to make India a competitive country in the growing crypto industry, tax authorities should allow carrying forward and setting off losses incurred from the sale of VDAs, similar to how it is done for capital gains.Doing the above will not only increase customer adoption and generate healthy revenue pipelines for the government but also enable India to take the lead in the upcoming technology revolution powered by cryptos and its underlying technology."Ashish Singhal, CEO & Co-FounderatCoinSwitch

Need to ensure cashless economy flourishes in rural areas too: Amit Tyagi, CEO at Payworld

"India is targeting to become a $5 Trillion economy by 2025. This will be propelled by the growth of SMEs & MSMEs. And this growth will come on the back of the increasing digitization of our economy and expanding the reach of financial services to the masses. We will have to work on bridging the financial divide between India and Bharat. While we have invested in large digital infrastructure projects like UPI, Aadhaar (which enables running AePS among others), RuPay network, etc. It is time to work on expanding last-mile connectivity. This can be achieved by providing incentives for the acceptance of infrastructure in SURU (Semi-Urban and Rural) areas. Incentives can also be provided through relief on GST & TDS for this segment. While banks play a critical role in providing financial services, they are limited in their reach owing to the inherent cost structures amid other concerns. Bharat-focused fintech players like Payworld provide doorstep banking while providing employment opportunities thereby aiding the Digital India mission. Expanding inclusion initiatives to fintechs like Payworld will help deliver the impact of these initiatives to intended beneficiaries faster and more conveniently. While the cashless economy is flourishing in Urban areas, we need to ensure that the gains are equally seen in Rural and Semi Urban areas as well:Amit Tyagi, CEO, Payworld

Budget should strengthen financing ecosystem, digital lending infra: Ram Kewalramani, MD at CredAble

"We expect Budget 2023 to further strengthen India’s financing ecosystem and push our booming FinTech sector towards an affluent future. Flexible corporate laws will be an added boon for the sector. FinTechs and NBFCs who are working to bridge the gap and improve access to financial products among the unbanked populations must be supported with tax incentives to achieve their goal of building a sound, inclusive financial system in the country. We hope to see more policies that will ease the financial burden on the FinTech sector, such as—risk mitigation measures to the FLDG models for FinTechs as well as government interventions to infuse more capital into the sector.Liberalisation of the tax regime along with providing additional depreciation on the fixed assets that are being used by FinTech companies will help save taxes for these companies. Digital technologies that streamline processes and strengthen efficiencies will play a significant role in the lending sector. Union Budget 2023 should also look at having policies to strengthen the digital lending infrastructure and provide a seamless linkage for Indian FinTech companies to global financial ecosystems, saysRam Kewalramani, MD & Co-founder at CredAble: (FinTech and digital lending)