Budget 2023 Expectations: What's On India Inc.'s Wish List?

Bracing for global headwinds, Indian corporates will listen with rapt attention to Finance Minister Nirmala Sitharaman's Budget speech on Feb. 1.

A year before the nation goes to polls, India Inc. hopes the Budget will introduce measures that can have a multiplier effect on sectors and the economy.

Facilitating investments, sustaining economic growth, creating jobs, and streamlining policy features are among the expectations that India's senior industry executives have from the Budget.

Here's what senior India Inc. executives want from the Union Budget 2023:

Continue to spend on infrastructure—that is clearly one ask, said TV Narendran of Tata Steel. Second is, of course, continue to work on simplifying the way to do business.

Policy is one part, but translation of the policy into the cost and ease of doing business at an operating level will depend on alignment between the Union government and the states, he said.

Prasad said India can learn from China in terms of how it has powered their biotech industry. "I do expect some change in how the government will incentivise R&D."

The real estate sector may get a boost with some announcements to expand the current income tax benefit for housing. Measures to stimulate rural spending and infrastructure development would be the highlight in the budget, he said.

Any roadmap to build and bolster the entrepreneurship culture can promote self-reliance and go a long way in employment generation, Gopkumar said. FMCG, manufacturing, MSME and banking are a few sectors that may see action, according to him.

The Union Budget will have to be drafted against the background of a slowdown in the Indian economy combined with the imperative of moving along the fiscal glide path while providing the right push to consumption and investment, according to Madan Sabnavis, chief economist at Bank of Baroda.

Coming just before the 2024 general elections, the language will be important as this is the time when the government will have to roll back some of the sops given post-Covid, which are no longer necessary, he said.

At the same time, the Budget should contain strong messaging on the commitment to the weaker sections of society. Therefore, programmes like NREGA and PM Kisan will continue to occupy the FM’s attention as will capex, which will provide the nudge on investment, according to him.

Allowance of chapter VIA deduction in new tax regime and extension of time limit for claiming deduction under chapter VI-A (till date of filing income tax return) could be considered for salaried class, Sharma said.

In addition, extra tax incentives for taxpayers who invest in higher education will be a great move. Apart from that, any home loan taken by taxpayers for purchasing or constructing a house should get tax benefits, he said.

A special section should be introduced in the budget for allowing tax deduction on the amount spent on insurance plans. Introduction of tax benefits against loans, other than home loans, could also be considered for personal loan taken for construction or renovation of residential property or repayment of principal amount of education loan.

Deductions under Section 80C should be divided in six major segments with a limit for each segment:

• Education: Tax deduction for amount spent on education of children.

• Parents’ health: Tax deduction for amount spent on parents’ health and insurance.

• Insurance: Tax deduction for amount spent on health insurance and term insurance.

• Medical expenses: Tax deduction on amount spent on medical treatment of major diseases for self and dependent family members and preventive health checkup.

• Home loans: Tax deduction for EMI/interest payments for loan taken for purchase of property for self-use.

• Donations: Tax deduction for grants given to NGOs working for social causes.

Apart from the existing tax benefits available under the 80C framework, the following tax benefits could also be considered:

• Allowing tax benefits for investment in various investment schemes, such as REITs, AIF and other shorter period government schemes such as KVP and NSC.

• Increasing the limit of investment in NSC.

• Allowance of tax exemption or concessional tax rates for shareholders investment.

The government debt situation is unsustainable and hence, we expect the government to honour the fiscal deficit this year with improvements in inflation, said Shruti Jain, CSO of Arihant Capital.

According to her, we may see higher allocation for PLI to a few more industries.

Taking advantage of global decoupling, the government has stated plans of making India a manufacturing hub, expecting a growth of 15 times, with sector output reaching $500 billion per annum by 2030, said Suresh Subudhi, managing director and senior partner of Boston Consulting Group.

Achieving this would require a substantial investment not only in industrial parks and innovation centres, but also related infrastructure sectors like transport and energy, he said.

"We look forward to seeing focused initiatives to boost consumer sentiment, improve ease of doing business, strengthen infrastructure, and promote investment in critical areas including healthcare, network modernisation, skilling and job opportunities, and financial inclusion," Mitra said.

The upcoming Union Budget 2023 is expected to 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, he said. Encouraging joint collaborations and ownership by industry and academia, along with centers of expertise will also be a welcome experience.

"We anticipate a bold, growth-oriented Budget, with announcements that will encourage capital investment and FDI inflows into India, said Surendra Hiranandani, chairman and managing director of House of Hiranandani.

With more than half of India's 2030 real estate stock still unfinished, the real estate sector has a great chance to become greener, reducing energy consumption and embodied carbon emissions, and meeting the ever-growing energy needs of buildings. To promote the sector, the Budget should further incentivise investments in green technologies, he said.

Just like our country’s vision of Make-In-India, from a broker's perspective, the Budget should also focus on Trade-In-India, said Puneet Maheshwari, director at Upstox.

From an investor's perspective, it will be beneficial to remove LTCG on equities, which is currently at 10% if the capital gain is more than Rs 1 lakh in a financial year. It would also be ideal to introduce tax exemption on STCG up to ₹1 lakh, he said.

For the overall fintech industry, which is growing rapidly, there needs to be a mandate to regulate and simplify taxation, like on ESOPs and provision of incentives for adopting artificial intelligence and machine learning, Maheshwari said.

Broadly, the Budget should not only be concerned with improving the country's economy, but also take a comprehensive approach to enhancing economic conditions for every citizen, he said.

Given the recent increases in health insurance premiums and the need to provide basic financial protection against natural catastrophes, such as Joshimath, the insurance industry is expecting a combined tax relief of up to Rs 1 lakh for health and household insurance, said Ankur Nijhawan, chief executive of AXA France Vie—India Reinsurance Branch.

While widening the financial protection net, such a move would also increase insurance penetration in India, he said. Easing norms and providing help in the form of tax benefits could go a long way in opening up the segment to the currently underserved and unserved sections of the population, according to him.

UPI on credit card can prove to be a masterstroke with a combo of instant payment and credit, and government focus on this through the Budget will be much appreciated, said Shailendra Singh, managing director and chief executive of Bank of Baroda Financial Solutions.