Budget 2023: How various businesses responded to the Modi government’s growth vision in the face of global challenges

Companies reacting to the first budget of ‘Amrit Kaal’ that’s focusing on Green growth, infrastructure and investment, youth power,  financial sectors and many more

India’s Union Budget 2023 was announced on 1st February by Finance Minister Nirmala Sitharaman. The Finance Minister made numerous significant announcements addressing various sectors in the budget speech. She made significant announcements regarding green economy, youth, digital growth, artificial intelligence, technology sector, EV industry, women, the new income tax slab, agriculture, railroads, and tourism. These allocation of budgets to the different sectors encouraged the roadmap of the startups as well  in the upcoming years. Also By the vision of “Amrit Kaal” , the Government initiates to promote the technology-driven and knowledge-based economy with strong public finances, and a robust financial sector. The following are the reactions of various industry players post the announcement of Budget 2023-2024.

Talking about the government’s vision for the growth of AI and technology, Mr. Santhosh Sagar Reddy, Founder and CEO of CoffeeBeans, a technology company that helps businesses build superior products, stated that, “It is heartening to witness that the Finance Minister Nirmala Sitharaman has proposed a two-pronged vision for artificial intelligence (AI) in India: ‘Make AI for India’ and ‘Make AI work for India’. The game-changing potential of AI is very much evident today and now with Budget 2023 proposing setting up three centres of Excellence for AI in top educational institutions, I am quite confident that the technology will herald a new wave of growth across business sectors and industries.  Further, the fact that these centres will work in close collaboration with industry and encourage multidisciplinary research is sure to help both the tech industry and the country to realise its true potential in the coming years.”

Farheen Ahmad, CEO & Founder of interality,  an engine for Mixed Reality Worlds, talked about the importance of including Digital Assets in the budgeting, she says “Union Budget 2023 has carried forward the existing tax policy on digital assets which means all crypto assets will continue to get taxed at a flat 30% with a 1% tax deduction at the source (TDS). While unveiling the 2023 Union budget, Finance Minister Nirmala Sitharaman did not make any specific mention of cryptocurrencies, Blockchain, or Metaverse in her speech and left the existing framework of crypto taxation in the country untouched. Experts are not surprised as a majority of them weren’t expecting any major change in the current stance of the country towards digital assets. The perception of Digital Assets as a speculative class of investment still prevails largely in India and despite some credible efforts, cryptocurrencies haven’t been able to win over the confidence of regulators, central banks, and other overseeing authorities across the globe.”

Ahmad further added, “I hope that the Government will reconsider its position on crypto taxes and sit with industry stakeholders to build a healthy and sustainable environment for the growth of Digital Assets in the country. As India has taken the presidency of the prestigious G-20 group of nations, this is probably the most opportune time to build a consensus for the widespread adoption of Digital Assets among the participating countries. The players in the crypto industry also need to work out ways for gaining recognition among regulatory bodies and statutory organisations. In sum, creating an environment of trust and credibility around Digital Assets is the need of the hour and therefore, every stakeholder must put concerted efforts to achieve this ambitious goal.”

Mr. Abhishek Dwivedi, Co-Founder of EVeez, a pioneer in Electric Mobility as a Service (eMaaS), reacted to the government’s commitment to promote environment sustainability and growth of EV sector, says that, “The implementation of the Green Economy, which will enhance the nation’s EV infrastructure, in the Union Budget 2023–24 is very encouraging for the EV sector. The government’s commitment to promoting environmental sustainability is a noteworthy achievement. Emphasis on lowering carbon footprint and creating jobs through green growth projects demonstrates a profound understanding of how the environment and the economy are intertwined. We look forward to helping create a future where everyone lives in economic and environmental prosperity.”

Dwivedi further added, “We consider this budget to be pro-EV because it emphasises important initiatives like cutting the customs duty on lithium batteries from 21% to 13% and extending the subsidies for EV batteries by another year. The proposal to allocate Rs 35,000 crore priority capital for energy transition is a positive move which can aid in building charging infrastructure & innovative solutions to accelerate EV adoption. These are encouraging measures since they will increase EV adoption. In accordance with the budget’s goal of promoting eco-aware lifestyles, the policy on replacing old, polluting vehicles should hasten the switch to electric vehicles. We are pleased with the budget overall since it is inclusive, progressive, and will promote investments in the EV industry.”

Another EV Industry expert Mr. Muzammil Riyaz, Founder of EVeium Smart Mobility said that, “In the last year alone, EV Sector has seen many ups and downs. At present, EVs contribute to only 2 per cent of the total auto sales in India and extensive support from the government is required to chalk out sustainable growth of the sector. To achieve the ambitious mission of e-mobility in India, initiatives announced in the Union Budget this year including – Customs Duty reduction from 21% to 13% on capital goods and machinery for Lithium Batteries, and an extension of the subsidies on EV batteries for one more year are going to help.  These will certainly encourage each EV manufacturer to contribute to the industry initiatives to achieve mass EV adoption by 2030.”

Mr. Dhananjaya Bharadwaj, Co-founder and CEO of ParkMate, a smart parking solution company, mentioned about the emphasis on innovation, research, and development in the budget, “The Budget 23-24 addressed by Finance Minister Nirmala Sitharaman reinforces the excellence of the Budget introduced last year. The Union budget correctly emphasised the need for a greater accentuation on innovation, research, and development, which are vital to India’s ambitious goal of becoming a $5 trillion economy. A special proposal to establish three AI centres will motivate entrepreneurs aiming to launch AI startups. Moreover, it is worth mentioning that the planned infrastructure target is aligned with broader environmental and social goals. Like the rest of the startup community, we fully embrace the Budget 2023.”

Ankit Agarwal, Managing Director, STL, said that, ‘Today’s budget was a much awaited one as we were looking forward to growth-inducing changes. It is heartening to see that the Government is well aligned with the needs of the country. I have three key takeaways from the budget 2023 which are: Capital investment in infrastructure, Empowering Rural India and an impetus on Skilling. All three hinge on a robust digital economy as it is at the heart of all infrastructure and people related interventions in the country and the world over.

The increase in the capital expenditure outlay by 33% to INR 10L Cr, which is 3.3% of the GDP is expected to give a major push to infrastructure and job creation. It will help the Government’s CAPEX get aligned to the OECD average of 3.5% of nominal GDP. Additionally, the Government’s announcement to put INR 10,000 crore per year for urban infra development will further stimulate overall economic development. For both of these, there would be an additional push towards digital infrastructure to create smart cities, imparting education and so on and so forth.

One of the most meaningful features of this budget is the Hon’ble Finance Minister. Smt Nirmala Sitharaman and the Government’s impetus on growing the agri tech industry. Almost 85% of farmers operate less than 5 acres of land. Around 36 mn hectares of agri-land has been affected by natural calamities over 6 yrs (size of one Himachal Pradesh each year). Imagine a world where companies are able to integrate IoT sensors and analytics to improve the lives of farmers! It is an indication of a truly inclusive country in the making. Fiber technology will be one of the key steps toward digital transformation for the agriculture sector in India.

Last but not least, the pandemic has intensified the need for a tech-enabled skilled workforce. Government, training institutes and corporates must ensure that they have a good grasp of the changing dynamics. Budget 2023 has put an important focus on skilling and training youth for the future for India and for the world. Announcement of setting up 100 labs for 5G services based application development will tap employment potential and business opportunities in the country.

We also whole heartedly welcome the government’s decision to move in favour of the telecom Optic Fibre industry by maintaining the customs duty rate on its raw material which we believe it will help the domestic industry to strengthen its position in the global arena and transform the country into a global manufacturing hub.

Post pandemic, the approach to welfare and growth has naturally been influenced by technology and the power of digital and it is this power that we will harness to become one of the top 3 economies in the coming years.’

Rajiv Talreja, Founder of Asia’s Largest MSME Business Coaching Company, said that, Balanced, sustainable and stable – these would be 3 words to describe the Budget. The change in the tax slab is a long due reward for the middle class. Reducing 39,000 compliances is welcomed as it gives boost to ease of doing business. Credit guarantee to MSMEs, attention to Infrastructure, Agriculture and Tourism… Overall a big thumbs up to the Finance Minister for paying attention to all the critical factors that make the India story stronger. This budget is also a Sign of a secure Government with a vision for building a Stronger India. Neither Populist, nor capitalist makes this budget a clear statement of conviction in the India Growth Story.

Veena Ashiya, Ceo & Founder of Monrow Shoes. said that, “The FY23 budget laid emphasis on technological developments. While speaking about digital payments, Finance Minister Nirmala Sitharaman stated, “Digital payments continue to find wide acceptance. In 2022, they show an increase of 76 per cent in transactions and 91 per cent in value. Fiscal support for this digital public infrastructure will continue in 2023-24.” The announcement to further strengthen 5G paired with support for digital payments is a boon for D2C brands like ours. The extended date of incorporation for income tax benefits to start-ups from 31.03.23 to 31.03.24 and the proposition to provide the benefit of carrying forward losses on change of shareholding of start-ups from seven years of incorporation to ten years, will be a huge relief for Indian startups.”

Rishi Bhatnagar, President at Aeris Communications, said that, “The forward looking of budget 2023-2024 and its seven priorities or the “Saptarishi” will complement each other in India’s growth during Amrit Kaal. The budget ticks all the boxes in terms of use of AI, emerging technology, social entrepreneurship, employment generation, push for manufacturing, infrastructure development, skilling and R&D to help India march towards inclusive and sustainable development. I personally admire the attention given to future technology with the proposal of setting up centres of excellence for Artificial Intelligence in top educational institutions of the country and prompting 5G labs. Budget 2023 is futuristic and encourages avenues of growth in future tech, healthcare, smart cities, digital communications, agriculture and multiple other sectors. I believe that new technologies drive innovation across business models and demands supportive policies and skills which have been managed well in this budget.”