Democratise health: Check.
Implement substantial tax reforms: Check.
Find ways to boost rural consumption: Check.
Unveil more production-linked incentive schemes: Check
These were some of the key demands of India Inc ahead of the Narendra Modi government's last full Budget before the 2024 elections. Companies across the board expected the government to find ways to woo the electorate, especially in rural India, and strengthen its position as the world's fastest-growing economy. Here’s a roundup of corporate India’s key expectations from Budget 2023:
With the Covid-19 pandemic exposing vast chasms in India’s healthcare, industry watchers want the government to cater better to its underserved and unprivileged people.
Despite schemes like Ayushman Bharat Yojana providing free access to health insurance for low-income earners, there are not enough hospitals and healthcare services in the suburbs and rural areas to meet the demand, said Aster DM Healthcare Chairman and Managing Director Dr Azad Moopen.
“Telemedicine can be extended to tribal, hilly, and rural areas that are typically unreachable by physical methods. This will be a big relief to the underprivileged populace given the pervasiveness of mobile phones in the nation,” said Dr Moopen.
The healthcare budget in Asia’s third-largest economy has remained worryingly low as a percentage of its gross domestic product. India spent 2.1% of its GDP on health in the financial year 2021-22 versus 1.3% in the previous year, according to the Economic Survey.
Public healthcare in the country needs more focus, others pointed out.
“The government must bring in universal health insurance coverage for all, including the missing middle,” said Dr H Sudarshan Ballal, Chairman, Manipal Health.
He also expected the government to incentivise and empower healthcare workers to provide services in India’s hinterlands and villages, where more than 60% of its population resides.
Consumer & Retail
The aftershock of the pandemic and high inflation for the major part of 2022 badly hit consumption in rural India, according to the makers of fast-moving consumer goods (FMCG).
“Inflation needs to come down for consumer demand to rise, which is the prime concern of the FMCG industry at the ground level,” said Anshul Agrawal, Director, Mysore Deep Perfumery House, which sells everything from incense sticks to tealight candles. “We hope that some kind of positive government interference may help drive the FMCG sales, especially (to) the middle class, which continues to spend on other categories but restricts spending on FMCG products."
Others pushed for more government support for retail workers.
"The retail industry today is run by an army of people who work hard and are at the receiving end of things by and large. My budget wish is for them: Can we establish a retail employee fund that covers comprehensive health and job insurance coverage for every retail employee?," said brand-strategy expert Harish Bijoor, who is also the founder of the eponymous firm.
Automobiles & E-mobility
Keeping rural India happy was likely to be at the top of the government’s agenda even in terms of the automobile sector, experts said.
The focus would be to boost rural consumption. That would, in turn, support discretionary spending and the two-wheeler and entry-level four-wheeler OEMs, Axis Securities stated in its pre-budget expectations note.
Clean mobility veterans expected the government to extend the FAME-II subsidy beyond March 2024 and to also cover categories such as commercial vehicles for promoting faster adoption of EVs.
EV startups demanded government support in setting up infrastructure.
Evaluating special economic zones (for electric vehicles), offering low-cost land and building infrastructure would give an impetus to stimulate the economy, said Namit Jain, Founder and CEO, Zen Mobility.
“We also believe that the ban on imports of Completely Knocked Down (CKD)/Semi Knocked Down (SKD) kits will only help in growth of Indian companies,” Jain added.
Renewable energy & Circular economy
As India looked to realise its net-zero goals by 2070 with the help of renewable energy, the industry needed more hand-holding besides the existing Rs 24,000-crore PLI scheme the government had announced for the manufacturing of solar photovoltaic modules, said experts and stakeholders.
Financing solar projects at affordable interest rates and extending the existing PLI scheme to include the micro, small and medium enterprises, would be key Budget asks from the government for India to be able to meet the COP27 obligations, said Anurag Singal, a chartered accountant who runs startups and consulting firm Betafin Partners.
Others expected government incentives to promote green hydrogen.
Harnessing wind power could serve as a natural source for round-the-clock power generation and also support the country's ambition to produce green hydrogen, GE South Asia president Mahesh Palashikar said.
He asked the government for “an enhanced national manufacturing ecosystem for large-scale wind turbines and related components that will reduce the overall levelised cost of wind power generation, enhance adoption and enable higher Indian exports to the world”.
If India were to transition to cleaner forms of energy, it also needed to switch to a circular economy.
For this, the recycling industry would need regulatory changes in the lithium-ion battery ecosystem such as lowering taxes and import duties, and prohibiting the export of used lithium-ion batteries and black mass (crushed and shredded e-waste), said Attero Recycling CEO & Co-Founder Nitin Gupta.
The government should work harder at boosting the reach of air transport in India, experts said.
“Over the last few years, airports (in places like) Pakyong, Kushinagar, etc are lying idle. The aim to have 100 new airports by 2024 is just a year away, but merely having airports is of no use. Having 100 operational airports will make a difference and incentives should be budgeted for these,” said Ameya Joshi, an aviation analyst and founder of Network Thoughts.
Last July, the government had set a target to operationalise 1,000 UDAN routes and to operationalise 100 unserved and underserved airports, heliports or water aerodromes by 2024.
Amid global economic uncertainties, India has emerged as a frontrunner in becoming an alternative market for other countries' infrastructure and supply chain needs.
“As global supply chains reorient in the wake of global events, India is expected to play a huge role as it charts its way to a $5 trillion economy and more. Infrastructure and logistics sectors are expected to play a pivotal role in manufacturing and services,” said Rajiv Agarwal, Operating Partner (Infrastructure), Essar and Managing Director, Essar Ports.
He asked the government to enable policy frameworks and ensure the availability of low-cost borrowing for long-gestation projects.
Last year, the government rolled out the National Logistics Policy (NLP) 2022 to lower the cost of logistics from 14% of GDP to a single digit “as soon as possible”. While the industry welcomed the legislation, a lot depends on its implementation.
“I think the budget should include some incentives around technology adoption which can accelerate the execution of NLP, especially the digitisation of the logistics industry,” said Vineet Sharma, CEO & Co-Founder, FleetX.
He also stressed the need for skill improvement programmes in the logistics and transportation industry to enable easy integration of operations with software.
The real estate industry that has weathered the pandemic storm is expected to build momentum using incentives such as tax relief.
This could be in the form of “direct tax breaks for homebuyers and a push-through of input tax credit (ITC) under the Goods and Services Tax (GST) regime for developers,” said Puravankara Limited CEO Abhishek Kapoor.
While the crypto industry at large remained unhappy with the 30% taxation and expected rationalisation on the 1% TDS front, it also expected regulatory reforms from the government in this Budget.
“Any proposal that could be regulatory in nature, on KYCs, customer onboarding, products and services etc, will give the crypto sector the much-needed mandate to operate fearlessly and independently as an industry while protecting consumer interests,” said Vikram Subburaj, CEO & Co-founder of Giottus Crypto Platform.
Gaming industry stakeholders expected a proper set of guidelines and rules to grow further.
“What will also be interesting is the outcome of a recent proposal in the online gaming policy that involves establishing a self-regulatory organisation (SRO) to handle the registration and approval of games,” said Sunil Yadav, CEO, PlayerzPot.
(With inputs from Lavpreet Kaur)