Union Budget 2023 to Be Announced, Here Are Expectations from Industries

Union Budget 2023 is all set to be announced by the Government of India. The Budget 2023 consists of the capital expenditure for the financial year 2022 and 2023, and when talking about the current year, the union budget has been increased by 35.4 percent to Rs 7.5 lakh crore. As of now Nirmala Sitharaman, union minister of finance, is presenting the Economic Survey in the parliament, which is a pre-Budget document compiled by the Economic Division of the Finance Ministry’s Department of Economic Affairs under the supervision of the Chief Economic Advisor V Anantha Nageswaran.

The industry is looking forward to the Union Budget 2023 and has various expectations from it. Sachin Alug, CEO, NLB Services, says from a holistic industry view: “India has stayed resilient in the past few months despite the global headwinds and macroeconomic conditions. However, for the business spirit to continue, certain interventions are required at the policy level, making this year’s budget a much-awaited one. Uniformity in taxation is very critical for corporations. On priority, for the manufacturing and services sector to flourish, reducing corporate tax to a globally competitive 15% is the need of the hour. Furthermore from a skilling perspective, the right fiscal steps to revisit some of the government-sanctioned investments in skilling for future technologies like 5G, Blockchain, AI/ML, and Data Science will help prepare the Indian workforce not just for immediate job requirements but for future preparedness as well. With 5G implementation going on in full swing, a specific focus on skilling intervention around 5G technology, Data Communication, and Cloud Computing would be equally essential. Lastly for salaried employees, increasing the minimum tax bracket to 5 Lakh and reducing the tax burden further by lowering the highest slab to 25% will go a long way in motivating people to join the formal workforce. Some of these reforms will play an important role in addressing the skill gap, especially in the niche categories and addressing attrition which is a big concern for many industries.”

What Various Industries Expect from Union Budget 2023

Expectations from Insurance Industry: “In line with IRDAI’s mission to achieve insurance for all by 2047, significant reforms must be taken to improve India's health and motor insurance penetration. To bridge the huge protection gap in India, I expect the government to announce measures to not only incentivise first-time buyers but also to push people to have adequate coverage. The government could look at offering exemptions on Motor Own Damage (OD) and third-party insurance premium under the current Section 80C framework to encourage people to buy or renew their vehicle’s OD insurance. As OD insurance will also cover the vehicle’s damage, it will offer better coverage and the tax saving will help reduce the overall cost of buying the vehicle. Union Budget 2023 could also look to provide positive changes to first-time policyholders, such as a separate tax exemption limit for term insurance and separate tax deduction benefits under section 80CCD, similar to NPS, for premiums paid toward pension or annuity plans launched by life insurance companies,” says Parimal Heda, Chief Investment Officer, Digit Insurance.

Expectations from Cybersecurity Industry: “We are expecting to see a number of strong measures announced in this week's budget, designed to show a continuation of the Government's commitment to the Digital India initiative and goals.  For instance, we would hope to see simplified regulations around connected enterprises, giving support and guidance to Indian enterprises looking to embrace the latest digital security architectures and approaches such as zero trust.   We also believe that the Government intends to further its incentives and encouragement for technology skills and manufacturing, both of which help India remain at the forefront of this global industry.  One area that we will watch particularly closely will be the proposed initiative to encourage the sharing of cyber security intelligence across organisations. This endeavour would be inline with initiatives we are seeing in other countries around the world and would provide vital support for Indian businesses in their defence against rising cyber crime,” says Alok Kothari, Country Manager for India, Netskope.

Expectations from EV Industry: Commenting on the upcoming budget expectations, Ashutosh Verma, Founder of Exalta, said ”As EV adoption has been growing at a fast pace, and India is one of the largest electric two-wheeler markets in the world, we are expecting subsidies to be extended for EVs in respect of promoting clean mobility in India. Infrastructure for EV charging and swapping should be prioritized to hasten the adoption of e-mobility. FAME incentives for infrastructure for swapping and charging can help achieve this goal. We also believe that introducing the battery swapping policy and recognising batteries as a service will help develop EV infrastructure and increase the use of EVs, as the EV industry has been providing high-quality and cost-effective sustainable energy solutions. Such incentives and policies will help promote the growth of sustainable energy infrastructure in India and make EVs more affordable”.  

Expectations from Startup Industry: Nandini Mansinghka, CEO of Mumbai Angels, said: “India’s startup ecosystem has grown to be a serious contender on the international stage, and there are ample opportunities for the government to enhance its position globally. There is palpable anticipation around the upcoming Budget 2023, which must focus on harnessing the employment opportunities created by the growth of the startup ecosystem. It will be important for the government to revise and rationalise taxes, such as in the case of employee ESOPs. Helping startups meet their daily capital needs is another crucial area that will require government intervention, and it should bring the minimum alternative tax rate down from the current 15% to 10% or 9%. There is a lot of activity in the crypto sector, which will emerge as a new industry generating fresh employment. In order to help revive crypto trading in the country, the government should reconsider the prevailing 1% TDS and reduce it, while introducing industry regulations within the new budget. Moreover, future jobs will focus on technologies like AI, cloud and cyber. The upcoming budget must consider introducing initiatives that focus on building these skills, working in collaboration with Indian businesses to help manage the increasing labor force. Another key area of focus for the new budget is developing a startup founders committee, which could help build entrepreneurship and finance education curriculums for colleges that enable the upcoming generation of entrepreneurs.”

Expectations from Healthcare Industry: Vivek Srivastava, Co-founder & CEO, HCAH- a health-tech company, said: ”Government should encourage Out-of-Hospital Care services for both preventive, curative and rehabilitative care (including preventive care), covering it under the government schemes like Ayushman Bharat, to cut the heavy expenses on medical bills at the hospitals during the recovery process. Revaluation of the GST applicable to healthcare services, for instance, reducing the expenses on hospitalization. For healthcare services, the government should consider making the GST "zero-rated" as it would lessen the financial strain on patients and their families. There are ambiguities in some of the services in the out-of-hospital space. The government should provide them with the same status for such services as they are delivered within the hospital, thus reducing the cost of recovery for the patients."

Expectations from Technology Industry: Deepak Shenoy, CFO, Wolken Software- a SaaS company, said: ”Focus on fiscal consolidation (towards FY26 fiscal deficit target of 4.5%), and CAPEX allocation will continue. Policy-driven Capex for defence indigenisation, import substitution and PLIs, green energy mandate, energy security and strategic sectors such as semiconductors will sustain and may increase. Also, being a pre-election year budget, less likelihood of any cut in Direct Taxes, but expect a reduction in Indirect Taxes to help reduce the cost of manufacturing and increase consumption. The MSME sector is one of the largest employers and contributors to GDP and exports. Extending the PLI scheme to this sector will help growth, exports and import substitution. Ease of doing business, Cost of Compliance and decriminalisation of offences should be actively worked upon to create an improved investment climate in the private sector. IT, ITES and Technology startups have faced challenges in the toplines and manpower costs. Measures to incentivise employment, ESOP tax deferment for all startups, and MAT reduction from the existing 15%, to ease working capital will help the survival and consolidation of startups."

Expectations from a Skilling Perspective: “Budget 2023-24 would probably be the most challenging one that Finance Minister Nirmala Sitharaman would be tabling on February 1, 2023. I think that this year's budget should give digital infrastructure and skills a high priority. Although India may have a positive view of "digital" and technology, more needs to be done to support the country's digital-first strategy as it aspires to become a USD 5 trillion economy. The government's commitment to digital skill development and its alignment with the IT Tech sector, and the PLI scheme targeted at helping manufacturers of IT hardware and computer servers need to receive equal weight in this year's budget. Government policy could be changed to promote the development of talent and skills. The tech industry requires a talented and skilled workforce. The government may provide funding for programmes to modernise educational buildings with state-of-the-art R&D capabilities,” said Alok Dubey, Chief Finance officer, Acer India.