Akshay Mehrotra, Co-Founder and CEO of Fibe expectations from budget 2023
“Annual budgetary exercise is the most anticipated regulatory update by the salaried individuals, the key contributors to the country’s tax revenue. It is expected that there will be a change in tax slabs or in terms of tax-related relief. As the working population is India’s primary source of tax revenue, they are the target of the most expected regulatory changes from the Union Budget 2023.
As it is expected that in the upcoming budget, some relaxations will be provided to the personal loan borrowers, we look forward to 35% of the Indian lending market as a lender. The salaried group also anticipates long-term benefits like healthcare, higher education, superannuation, and post-retirement benefits from the government in the upcoming budget.
One of the most important demands the businesses have from the government for the next Budget is to further ease the financial burden for start-ups in the fintech industry. The industry also wants depreciation on the fixed assets used by fintech companies to save on taxes. The government should be helping smaller NBFCs and fintech companies, working on their product in Tier-2 and Tier-3 cities with adequate co-lending limits, rates to develop the fintech industry and become fully digitalized. We hope that the 2023 budget will prioritize the policies and add to the fintech sector growth.”
Parry Singh, Founder and CEO, Red Fort Capital
“Non-Banking Financial companies (NBFCs) play a pivotal role in facilitating faster economic growth. Therefore, the government should make bold moves to encourage banks to increase the quantum of funding for NBFCs.
In the 2023 budget, while we anticipate a strong mandate for lending NBFCs working to empower underserved small and medium businesses through financial and technological interventions. Furthermore, we anticipate some relaxed tax regulations and liquidity assistance for NBFCs.
Therefore, NBFC taxation must be brought up to par with that of banks. Over time, the RBI has tightened the NBFC regulatory framework, particularly for large and deposit-taking NBFCs, and brought it more in line with bank regulations. However, tax laws have not kept up, and as a result, NBFCs face higher tax costs or compliance burdens than banks in several areas.
NBFCs anticipate a more accommodating compliance framework to provide credit to unbanked and underbanked MSMEs and small business owners and bring them into the official lending system.
Non-banking financial companies (NBFCs) have long complained that restrictions similar to those imposed on full-fledged banks are reducing the benefits of NBFC status. The industry anticipates that the government will put pressure on the RBI to relax industry regulations. However, there are other factors at play as well.
Furthermore, the industry is hoping that the government will standardize taxation and recovery policies. It anticipates tax relief by exempting NBFCs from paying tax on source-deducted income from securitization. A more flexible and cost-effective financing source for NBFCs is also urgently required.
It makes sense to treat NBFCs similarly to banks in some areas to maintain Non-Banking Financial Companies as a crucial layer in formal finance. We look forward to enhancement in Recovery Policies, Leverage and easing limits, simplifying compliance and taxation similarly to Banks.”
Pratik Gauri, Co-founder & CEO, 5ire
“Of course, the decline of trading volumes by as much as 85-90% is concerning, and the fear of not attracting investments in the Web3 innovative startups will impact the overall picture. But, as I have said earlier, the taxation of income and assets is entirely the purview of the government, and they have the exclusive right to impose and collect such dues.
What I feel is of utmost importance here is to remember that any monumental shift caused by Web3 will be the world shifting from a “value capture” economy to a “value creation” economy. This will require a new set of rules, which democratizes access to resources for creators and makes value creation as rewarding as capturing value. This means a direct relationship between the human capital and the consumers of its creation.
It is vital to ensure that any taxation regime does not hamper the development of India’s talent in Web3 and the supercharged innovative environment India has been experiencing recently.
The efforts to introduce the new CBDC show that the RBI and taxation regime is committed to innovation. We look forward to working with them to produce dApp, DeFi, and ReFi solutions that help.”
Sarbojit Mallick, Co-Founder & CBO of Instahyre
“With an emphasis on prospective economic advantages, the budget year 2023–24 is predicted to be advantageous to taxpayers. The salaried class expects the government to provide long-term benefits in the upcoming budget, such as healthcare, superannuation, and maternity and post-retirement benefits. The upcoming budget is also anticipated to include a work-from-home allowance to simplify and provide tax advantages to the salaried class, as well as an increase in the standard deduction cap, either as a fixed increment or the introduction of a progressive standard deduction based on cumulative remuneration. Moreover, the hiring outlook in 2023 looks better than the H2 of 2022. Technology companies will be ramping up their workforce as India brings on reforms in FDI, defence, and satellite tech with new launches in 5G and schemes to help SMEs. Technology enhancement in different sectors will spike demand for a specialised workforce, so skill-based hiring will win next year.”
Ankit Agarwal, Managing Director, STL.
‘It is an exciting decade for India’s digital progress, and I am very excited to see what the budget holds as the country continues firmly to be on a high growth digital trajectory.
First and foremost, the way we view conventional and digital infrastructure should be integrated and this is the budget that should call out for each ministry to have a separate fund for digital infrastructure. We are on track to become a digital leader because of the remarkable rate of technological progress, innovation capability and talent pool available in the nation. We strongly recommend the Government to incentivise Indian companies that are spending over 3% of their turnover on R&D with additional tax benefits.
In this decade of network creation where we are going to create the next leg of the digital economy for India, fibre connectivity is absolutely crucial and an immediate need. It is highly recommended for the Government to allocate funds towards fiberisation of at least 70% of telecommunications towers from the current 33% and create broadband infrastructure funds towards the same.
The potential of digital and technology should also be harnessed in defence. The budget 2023 should allocate funds for an ultra-modern, highly secure and seamlessly integrated defence network.
Last but not the least, for India to become a digital leader, the country needs homegrown technology champions. Hence it is important to have incentives on raw materials in the areas where domestic capability and capacity is limited. Additionally, having a strategic anti-dumping provision will definitely be a big driver of innovation and success of homegrown companies as protecting the domestic business in India will make it self-reliant in more ways than one.’
Nikhil Goyal, CEO & Founder, Beyond Imagination Technologies
“Blockchain technology can have a profound impact on several sectors as it has the potential to create cutting-edge solutions and serve as the foundation of India’s digital economy. It can play a vital role in India’s growth story by solving real-world problems. So, we hope that our country will see more adoption of blockchain technology in times to come and bring real impact, improve efficiency and make India a productive nation. Thus, we hope that the upcoming budget will provide an impetus to technological advancements, which can unlock significant opportunities for growth and economic development, and an opportunity for India to become the tech hub of the world.
In the budget 2023-24, we hope the government to provide a fair share towards technological advancement, focus on incentivizing or promoting tech to make India the talent hub of web3 for the world, a push to R&D to develop “Make in India” blockchain products for the world and position India as the epicenter of the tech developments.”
Anuj Kumbhat, Founder & CEO, WRMS (An Agritech Company)
“Agriculture is the second largest contributor to India’s economy and is always the key spotlight in the Union Budget. 2022 was a good year for the agritech sector with strong investments and greater adoption of technologies. But, the agriculture sector in India is yet to accommodate technology to its full potential. To support this growth momentum, the government needs to enable more technological advancement in the sector with an acute focus on the development of a complete agritech ecosystem. We hope that in the upcoming budget, the government allocates funds, especially for the improvement of agriculture infrastructure which has a much larger multiplier effect on the economy in the long run.
Government should devise more schemes to ensure greater application of technology to increase agricultural yield, efficient utilization of resources, reduction in input cost, growth in agricultural wages, remunerative and stable prices, and also give proper forward and backward linkages to the farmers. Not only this, the government should also subsidize crop insurance further and provide the farmers with additional subsidies to buy drones and other accessories.
There is no doubt that the government is playing a crucial role in the development of the agriculture sector. The Agritech sector can be a game changer for the economy with the government’s impetus push in terms of R&D, tax benefits, automation, mechanization of farms, and supportive inputs for start-ups to make agriculture a robust, tech-led sector.”
Vijender Reddy Muthyala, Co-founder and CEO of DrinkPrime
“While we applaud the government for making drinking water more accessible through initiatives like the Jal Jeevan Mission-Har Ghar Jal, we believe it is critical to make safe drinking water more affordable. Lowering or eliminating GST on water purifiers, as consumer durable, will help treat them as an essential service required by all Indians. It will encourage people to invest in their health while helping mission oriented brands like DrinkPrime provide clean, safe and healthy drinking water to everyone.
Dr. Rishi Bhatnagar, President at Aeris Communications
“In the upcoming budget 2023-2024, the EV sector (including ancillaries) is looking forward to a slew of SoPs, including the extension of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME-II) scheme beyond 2024, and a reduction of GST. As India is poised to become one of the world’s largest electric two-wheeler markets, the GST for last-mile delivery services needs to be reduced. Furthermore, this year, I would urge government to implement the battery-swapping policy which it had committed to in the last year’s budget. Battery leasing through the battery swapping infrastructure will help EV owners save money on battery purchases. Stable and stronger policies on lithium-ion battery recycling and promoting rebates for R&D related to battery recycling must be taken into consideration this year. Overall, my expectation is that the Union Budget would aim at long-term holistic growth for the automobile industry focusing more on investments in EV infrastructure, reducing GST on swap batteries, incentivising charging, and swapping infrastructure, creating job opportunities, and introducing new and emerging technologies. Along with this, Government’s continuous support of localisation and the transition to green mobility will give an impetus to this sector as a whole.”
Shafaat Hussain, Director Finance & Head of Operations, Pitney Bowes India
“The logistics sector, regarded as the foundation for business, is one of the most promising sectors and needs continuous push to ensure that India unlocks its full potential. While direction was provided in the previous budget through PM Gati Shakti that focused on seamless multimodal connectivity to enable smooth operations, this time the Government should place more emphasis on the digitization of this sector. This will enable seamless flow of goods and data through multimodal networks throughout the country. Additionally, the allocation of resources as an incentive for real-time integration will not only open new opportunities but also lead to responsible spending.
Considering the highly fragmented nature of the logistics sector, we can anticipate that the implementation of National logistics Policy will reduce the cost of GDP from 14% to below 10%. Reducing logistics cost and creating a structured technology-enabled ecosystem will further encourage India to be positioned among the top 25 countries in the Logistics Performance Index. Lastly, the level of integration that we are witnessing is not up to the desirable standards, and if we want India to be a world-class player, a forward-looking outlook is imperative wherein greater focus is placed on e-commerce.”
“Given the challenges faced by B2B apparel sourcing and supply chain disruption in 2022, we feel GST and TDS need to be decriminalized to reduce the already rigid and stringent legal framework for business taxes in India. The government should maintain the tax rate on corporations and continue its recent trend of providing certainty in the tax code. The next decade is India’s time to shine, and a friendly budget in 2023 will be what it needs to succeed. After a year of high cotton prices, the industry calls for government aid to help tackle fluctuations in natural fiber. Therefore, we hope the government allocates funds to achieve international status for Indian cotton. We believe the government should also consider a Cotton Price Stabilisation Fund Scheme. Furthermore, the budget must have provisions for improving export subsidies for exporters. It will ensure that India is not left behind in world trade. Additionally, there is an increasing need for businesses to maintain sustainability in supply chain management, along with the complete automation and implementation of blockchain technology. This will rebalance the disruption caused in the last 3 years. We anticipate that the upcoming Union Budget will address and ease the challenges faced by the industry in the past years.”Manish Mehan, CEO and MD of TK Elevator India
“Apart from the long-standing demand for single-window clearance and industry status, the real estate industry is expecting higher incentivisation of affordable housing, uniformity and expansion in the definition of affordable housing, increase in tax exemption on interest paid on home loans, and exemption on rental incomes. With more homes qualifying as affordable housing, the benefits such as lower GST at 1% without ITC, and other government subsidies will help a lot more Indians seeking to buy a home. The industry also needs strengthening of existing financing systems so it can provide liquidity to stuck real estate projects in India. All these measures will boost the growth of Indian Elevator industry.”
Rituparna Chakraborty, Co-founder & Executive Director, TeamLease Services
The centre is likely to target a nominal GDP growth of about 11-12% in the FY22-23 budget. To consolidate and augment the ecosystem to fast track GDP growth, cohesive steps are required to improve employment and employability of the talent in the country. To tackle India’s skill crisis, the need for the hour is to lead a Skilling Revolution 5.0 which will help enterprises partake up-skilling more objectively.
To make upskilling through CSR function more beneficial, the budget needs to make provisions to exempt these spends from GST to encourage more enterprises to undertake up-skilling. Another aspect that the budget needs to address is scaling apprenticeship adoption in the country. Apprenticeships have emerged as a credible solution to create a robust skilled talent pipeline for the future. India has the potential to reach 10 million apprentices in 10 years but the key to achieving this vision requires budgetary provisions in the form of incentives and reforms to launch skill universities; extended tax SOPS/higher subsidies to MSMEs and SMEs to adopt apprenticeship; create a single portal for both NATS and NAPS, separate regulations in the current UGC Act and Apprentices Act to scale work integrated programs; and the consolidation, simplification, and digitization of degree apprenticeships programs.
Sumit Kumar, Chief Business Officer, TeamLease Degree Apprenticeship
“Post the two years of the pandemic and the Ukrainian war, the FY23-24 budget is a much anticipated, and will be focused on accelerating the growth trajectory in the country. India has been facing a skills crisis for quite some time and over the last five years, we have witnessed apprenticeship emerge as a strong solution to this challenge. Last year, we reached a remarkable milestone of 5.8 lac apprentices, but to make the next milestone of 1 million apprentices a reality, we need few interventions, especially to augment the skilling ecosystem.
Some of the immediate reforms that the FY23-24 budget needs to address are:
- Further simplifying the apprenticeship system for the industry to understand, adopt and execute
- Recognize existing “learn and earn schemes” and consolidate them under the Apprentices Act to scale the apprentices
- To lay provisions to scale degree apprenticeship adoption by the industry but also academia to run apprenticeship embedded degree programs. The Academia needs more autonomy to create programs in all the streams along with Sector skills councils. Degree apprenticeships symbolizes quality apprenticeships which leads to vertical and horizontal mobility of the apprentices. Degree apprenticeships will also drive the Gross Enrolment Ratio alongside the youth employability and livelihood; it also has the potential to directly impact socio-economic growth by enabling candidates to transition towards formal employment. Hence fast tracking NEP 2020 implementation is essential to drive industry-academia partnership and transition learning from bilateral learning mechanism to a tripartite learning model which will involve the youth-academia-industry partnerships
- Encourage and emphasize on digital apprenticeships to align the skills and the youth for building digital economy
- Another key aspect that the budget needs to consider is brining reforms like tax SOPs and subsidies (especially for SMEs) under NAPS 2.0. Additionally, there is a need to introduce apprentices absorption as a mandate under the current Pradhan Mantri Rozrar Protsahan Yojana.”
Dhriti Prasanna Mahanta, Business Head, TeamLease Degree Apprenticeship
Enabling more corporates to have ease of doing apprenticeships
Although the government has consistently worked on reforms and amendments to the apprenticeship act of 1961, there is still a lot of apprehension among the business community in engaging apprentices. TeamLease Apprenticeship Outlook Report indicates a positive sentiment with regard to the role of apprentices in facilitating business growth by creating a cost-efficient and dedicated talent pool. Besides, emerging areas under PLI such as manufacturing, pharma, electronics/technology products, automobile etc are expected to engage apprentices to a greater amount as part of the apprenticeship program. However, a significant number of employers cited the lack of adequate capabilities and absence of clear understanding of the apprenticeship program as major hurdles in leveraging apprentices.
The framework of the apprenticeship program has a major influence on the level of employer participation and thus it is necessary for the budget commission to consider strategies like simplification, consolidation, financial incentives to MSMEs and introducing non-financial strategies to increase an overall participation among more people to achieve its vision of a ‘Skilled India’.
Dr KS Bhoon Head HR and Business Excellence, RDC Concrete
“Given the decrease in real income of workers due to inflation, increased tax alleviation is anticipated. The current tax-exempt limit ought to be raised to Rs. 5 lakh. The 18% GST on Mediclaim should be accepted as an input tax credit for welfare-related purposes. Furthermore, the EPFO should be privatized to reduce the difficulty encountered with accounting procedures and withdrawals. In addition, steps should be taken to facilitate business activity in India by forming a single-window system for beginning operations. Measures should also be taken to provide assistance to truck drivers by providing them with a place where they can obtain subsidized, wholesome food and rest, as truck drivers play an essential role in the country.”
