Here's what the Industry Corporates Expect for Budget 2023
The countdown has began. from corporate to the common man, everyone is looking forward to the much-awaited Union Budget 2023-2024. The budget would be the most challenging one that Finance Minister Nirmala Sitharaman would be tabling in Parliament on February 1, 2023. The announcement will not only have to lay the roadmap for India’s growth momentum while the world is dealing with ongoing inflationary pressure, global recession, and monetary tightening. It is also crucial because it would be Centre’s last full year Budget ahead of the Lok Sabha elections in 2024. Hence, it keeps the government at the steering wheel to push economic growth to a new level.
Like every year, the budget this year will also see important announcements of new PM schemes being launched with new budgetary allocations. While the government decisions at the end would be only public on February 1, but there are a host of things that this budget is expected to address. So, here are some of the expectations by the Industry experts regarding Union Budget 2023-2024.
Deena Jacob, CFO, OPEN, said, "Financial inclusion would be a key driver in the acceleration of economic development, especially for the masses and micro SMEs. Fintechs play a crucial role in distribution and innovation of financial services. Hence, one of the expectations is removing the existing gray areas when it comes to operations of fintechs and creating a formal clause with regard to their relationship with regulated entities. This would be a key for digital banking as a whole to verticals like lending where fintechs role can be effectively used to broaden the base coming under formal credit including tax credits and holidays for investments in newer technologies.
From a broader startup perspective, while the matters like ESOP taxation and taxation pertaining to liquidity for investors still remain the matters to be solved for, ease of doing business, tax relaxations and foreign investment ease would be the key areas to boost the funding environment for startups."
Sanjay Sharma, MD & CEO, Aye Finance, “The year ahead could well be the point of inflexion for India. As the world veers precariously on the border of a depression and China's global growth engine takes a breather, Indian growth rate seems relatively less affected. This can indeed give us the momentum to pull ahead in the world stakes. The budget should hence focus on supporting growth and stability, instead of conservative incrementalism. As we pull ahead and reach for the 10 trillion dollar GDP, there is no time to loose in addressing the social inequalities. Support for the 70 MN micro scale enterprises is the need of the hour and this budget could make a start on the following ideas:
- Lending to micro enterprises by NBFCs and Banks should be encouraged. Just as Bank's have to meet a specific priority lending quota for agri, there should now be a specified quota for micro enterprises in the priority lending.
- Allocation for initiatives that help improve the quality of the produce of micro enterprises. Here Govt should allow subsidies for private sector programs that can deliver technology and product improvement by such micro enterprises at scale.
- Health and critical illness covers at affordable premiums for micro enterprise owners and their family- so that their businesses may be protected from these adverse events.
- Continued Credit Guarantee support through CGTMSE and simplification of the legal recovery requirements for very small loans below Rs 2 lacs. These bold steps will enable improvement in flow of funds to the financially excluded micro scale enterprises. This segment provides 95 percent of non-farm employment and we can no longer turns out heads away from their needs
I believe that the Budget 2023 will bring in a period of progress and prosperity for all sectors – NBFCs and beyond – and catalyse policies and regulations that support holistic growth of the economy”
Soham Chokshi, CEO and Co-founder, Shipsy, said, “National Logistics Policy has been a landmark development in mobilizing the power of digitization to improve the state of logistics in the country. The budget will most likely be aligned to augment it through concerted efforts. This entails more investments in connectivity projects and building logistics infrastructure in various economic zones, especially under the PPP model, to expedite the execution of these. In addition, India's last-mile emissions per delivery being higher than the global average is an area that needs immediate attention. Reducing miles travelled per package and ensuring that the distance is covered through eco-friendly modes can help lower carbon emissions. So generous incentives for the deployment of EVs in deliveries backed with stringent policies can prove critical to addressing climate change concerns.”
Anil Jayaprakash, Founder and CEO of Assertify Technologies, said, "As the Indian government prepares to present its annual budget, the gig economy is definitely set to continue to benefit. Driven by the increasing convenience of digital platforms for job seekers and employers alike,the gig economy is expected to be the primary driver of job creation in the coming year.
Anitha S. George, the Vice President and India Head, Celonis, said, “A robust IT infrastructure is the foundation of a successful business - and data privacy relies on that as well. The hardware and software components - facilities, data centers, servers, routers, CMS, CRM, ERP,- serve as the foundation upon which defenses and protections can be put in place to protect data and help a company comply with various, ever-changing data protection laws. Organizations must realize that security and privacy aren’t just a priority - they are a necessity. Security and privacy needs to be built into everything the organization does: ensuring privacy by design across the entire organization and its products; ensuring access controls are advanced and up to date; taking precautions to always reduce the risk of improper access; making sure all sensitive data is encrypted, whether at rest or in transit. Additionally, organizations should take care to continuously educate themselves and every single employee - for instance, how to properly handle data both business information about Celonis as well as our customer’s data that we are responsible for - to be certain everyone is part of privacy and security efforts, and sees themselves as stewards to help protect the company and customers. At Celonis, we have mandatory privacy training courses every employee must do. A dedicated internal Data Privacy Team maintains and further develops the Celonis Privacy Program. How the privacy program will be managed in the long term as well as who will manage it, are questions that should be considered from the very beginning.”
Anil Kommineni, CTO, Infinity Learn by Sri Chaitanya, said, “Following the COVID-19 pandemic, the edtech industry has seen massive growth across all levels of education. While the transition to digital applications ensured that students suffered the least, the shift came with its own set of challenges. While, on the one hand, data privacy becomes a crucial challenge for everyone, it is amplified with respect to the data of children. Phishing, improper digital socialization, and a lack of digital parenting are the riskiest factors threatening data privacy. Therefore, it is imperative for the entire edtech ecosystem to identify the problem at its root to eliminate it entirely. To safeguard the digital interests of their learners, parents, and teachers, and protect their curriculum data, industry players can begin by obtaining consent from the learners' guardians and complying with legal obligations. Learner delight must include conforming to the security and privacy of Learner Data along with guardian and teacher, with end-to-end experiences in perspective; and must protect the Parent/Teacher preferences allowed as appropriate.”
Sumit Sabharwal, CEO, TeamLease HRtech, said, "Thanks to India’s economic policies, India has been in a fairly better place compared to western economies which are experiencing slowdown. However, currently, in India, we are seeing companies affected due to external factors. Such timeframes are opportunities for businesses to introspect and shift their focus on R&D and upskilling to build innovative solutions. For which, companies need capital. So, the budget should facilitate capital availability by implementing pro-investment policies.
The budget may help in making markets more investor-friendly by modifying taxes on Private Equity, VC, FII, FDI, and even retail investments. The availability of capital will help businesses to stay on stable path and sustain until consumer demand rebounds.
Vineet Agarwal, MD, Transport Corporation of India, Ex-President at ASSOCHAM, said, "We expect the forthcoming budget to provide a balance between the economic growth priorities and inflation concerns, in an all-encompassing manner. The momentum of growth that India has come up with post the pandemic cannot be weakened. We believe that the budget 2022 will be very carefully structured to sustain the growth momentum and continued infrastructure development, irrespective of the ups and downs. As the government’s vision to ease supply chain bottlenecks is quite evident in the scale of decisions and initiatives which have been undertaken in the recent past. The continued focus on the execution of specific strategies will improve global competitiveness. Reducing logistics cost and creating a technology-enabled structure will help to achieve the target of positioning India among the top 25 countries in the Logistics Performance Index. In addition, emphasis on upskilling programs like Gati Shakti Vishwavidalya will help the logistics sector contribute its best in India leading the Industrial Revolution 4.0 & 5G era."
Zaiba Sarang, Co-founder, iThink Logistics, said, "Logistics is one of the most competitive industries in the world, to the point where it is regarded as the foundation upon which all other businesses are built. As a result, when discussing budget allocation, we must recognize how critical it is to not only invest in this sector but also to ensure that our investments are directed toward areas that truly matter. Logistics is one of the unorganized industries, so we should anticipate investments in activities that will make it more organized. PM Gati Shakti, for example, has focused on seamless multimodal connectivity to enable smooth operations. We can anticipate the implementation of the National Logistics Policy, which will reduce the cost of GDP from 14% to single digits. As we all know, logistics is one of the world's largest carbon-emitting sectors; there has been discussion about investing in making this sector carbon-neutral by using less carbon-emitting fuels, electric scooters, and other similar technologies. On top of that, we can expect Rs 2 lakh crore in investments in port infrastructure to alleviate logistics inefficiencies. Overall, we can predict that 2023 will be the year when the logistics industry reaches its full potential."
Mohan Lakhamraju, Founder & CEO, Great Learning, said, "Equipping a large part of our youth with industry-relevant skills is a sure-shot way to propel India's economic growth further. I believe the need of the hour is to expand avenues for India's youth to have easy access to affordable higher education, providing multiple opportunities for them to develop cutting-edge skills. In this regard, a couple of initiatives can be taken by the Indian government in the upcoming fiscal budget - 1. Allow edtech companies to formally partner with universities to offer online and hybrid degree programs in order to achieve the Gross Enrolment Ratio targets set by the government and 2. Remove GST on upskilling programs to make them more affordable for people. Apart from improving the overall employability of the workforce, these measures will lead to more innovation and technological advancement in our country."
Jagdish Mitra, Chief Strategy Officer & Head of Growth, Tech Mahindra, said, “The year 2022 has been a transformational year for India and for the world. We witnessed disruptions in India followed by recovery and revival. India also emerged as a fast-emerging developing country and a ‘bright spot’ in the global economy. I believe, in order to maintain the growth trajectory, the need of the hour is to further push the development of the technology ecosystem through a tech-driven, forward-looking budget. We look forward to seeing focused initiatives to boost consumer sentiment, improve Ease of Doing Business (EODB), strengthen infrastructure, and promote investment in critical areas including healthcare, network modernization, skilling & job opportunities, and financial inclusion. We hope the upcoming Union Budget 2023 will be a beacon of hope for creating National R&D Ideas Incubators, which will nurture critical cross-disciplinary research, new ideas, and technologies through the early phase. Encouraging joint collaborations and ownership by industry and academia, along with centers of expertise will also be a welcome experience. The IT sector is poised to play a crucial role in fulfilling the Government of India's vision and mission of 'Make in India' for the world, - all it needs is a final push – which the upcoming Budget could grant.
Rahul Pillai - Relocation, Moving and Logistics expert, said, "The relocation industry is poised for change in India today. Though Covid -19 pandemic did ensure that fewer people were moving to newer locations, this year we expect the industry to grow both from an international and domestic perspective. Being part of the unorganised sector and considered a grey industry - the moving and packing business has been marginalised significantly which has led to the advent of many fly-by-night operators. However, all this is changing with the focus of the present Government on the logistics and moving sector.
In the 2023 budget, we expect emphasis and financial support from the government towards establishing compliances and rules and regulations for a common GST across this sector which will help not just the common man while moving but also bring legitimacy to this sector. Last year's focus on the PM Gati Shakti project ensured multi-modal connectivity and provided integrated and seamless connectivity for the movement of goods and services from one mode of transport to another. This helped in facilitating the last mile connectivity of infrastructure and also helped reduce travel time for goods and was greatly beneficial for the relocation and moving industry. Besides this subsidies for green transport, logistics and better road infrastructure will also go a long way to improve the service provided to customers"
Pratyush Roy, VP, Go-To Market, Crayon Data, said, “Whatever be the unfolding scenario, India is expected to be amongst the fastest growing major economies in the world.” We at Crayon Data agree with the RBI Governor’s statement. In particular, the start-up ecosystem plays a significant role in that growth trajectory.
However, the funding for Indian start-ups has dropped by 33 percent in 2022 as compared to the previous year (PWC Report). Investors are exercising caution in negotiating on valuation until the storm recedes. To offset the foreign-funding winter, the government can lower the long-term capital gain (LTCG) tax for domestic investors. This will encourage domestic investors to invest in Indian start-ups and strengthen the ecosystem financially, thereby allowing talent to not fall prey to recession. Further, the stance on ESOP policy could be relaxed to avoid dual taxation and enable start-ups to attract talent. Additionally, relief in GST would also encourage start-ups to ease doing business and expansion.
India is emerging as a fintech ecosystem offering start-ups the opportunity to grow into billion-dollar unicorns. Fintechs are expected to grow to 9.2 billion at a CAGR of 24.96% between 2022 to 2027. However, to keep pace with the volatility, liberalization of indirect tax and GST rates will help pave way for innovation and build a stronger economy. With banks, fintech, and tech solution providers now partnering more, strengthening this collaboration would allow more flexible reforms to fall in place. We hope that the budget will incentivise and encourage AI and Big Data players in the industry as we march toward a digital future.
Vikas Gupta, MD &Chairman, Miles Education Group, said, "The upcoming Union Budget should have a strong focus on education, particularly in the areas of implementing the National Education Policy and reimagining university education. This includes increased funding for higher education institutions and a reconsideration of the 18% GST rate currently imposed on educational and training services, which includes PG certifications and executive programs from any institution, private or public. Such a high GST rate acts as an entry barrier for many individuals to upskill themselves, thereby hindering the goal of building a skilled and competitive workforce, and driving economic growth in the country. An upskilled workforce will not only earn more but also spend more, ultimately paying higher taxes and giving better returns in the long run. Therefore high taxes on upskilling programs seem counterproductive, becoming an unnecessary hurdle in the way of India becoming an economic powerhouse. Thus, the government should take the necessary steps to make education more accessible and affordable for all."
Chander K Baljee, Chairman & Managing Director, Royal Orchid & Regenta Hotels, said, “The hospitality industry has bounced back like never before; the good times have returned. We are looking forward to a very great next few years. What happened is that the economy itself has recovered quite well. So, as the economy recovers, automatically, it has to result in benefits for the hospitality industry.
Another major boost to the sector is that we have got a lot of new roads within the country, for example, the Shimla-Chandigarh Road is near completion and will very soon get commissioned. This will reduce the distance and travel time by about two hours. Similarly, the Bangalore-Mysore Road is almost complete, reducing travel time by two hours. Due to improvement in connectivity, there is going to be a boost for tourism across the country. We have also seen the growth of religious tourism coming up in places like Ujjain, Ayodhya, and other places that are booming. So, I think this government has done well in this regard.
Another trend we’ve seen is long weekend getaways. Long weekends in our country do help a lot because youngsters today don't like to take one long holiday, they’d prefer to take three or four short vacations in a year. This has also been a contributing factor.
The hospitality Industry expects the government to provide us with a uniform industry status across the country. Today, only some states have announced this status for us along with some very good measures to help the hospitality industry. However, this is not the case with all states. The central government should put in place similar policies across the country and that will help the industry to grow. We must keep in mind that this industry provides a lot of employment and the multiplier effect of this industry doing well has a positive impact on the economy.
We request the government and finance ministry to provide us with long-term loans. In the hotel industry, there is a huge gestation period, which means, it takes three to four years to build a hotel, then another two to three years to stabilise, and then, the repayment starts, which causes a lot of distress. So internationally, hotel loans are 15 to 25 years. A similar structure should be implemented across the Indian hospitality industry too as it will not cause much NPAs and distress as in the past.
I think it’s a good time for the sector and we are looking forward to it. As a company, we have aggressive growth plans. We are already 78 hotels, with 24 openings slated by September 2023. In total, we will cross the 100 hotels mark very soon."
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