Industry Leaders React to Nirmala Sitharaman's Budget 2023

BUDGET 2023 Reactions: Finance Minister Nirmala Sitharaman presented Union Budget for 2023-24 in Parliament on Wednesday February 1. She said that the Indian economy is on the right track and is heading toward a bright future, despite challenging times. Sitharaman said the economic growth in the current year is estimated to be at 7 percent. Stating that this is the first budget in Amrit Kaal, the Finance Minister said, the vision for the Amrit Kaal includes a technology-driven and knowledge-based economy with strong public finances, and a robust financial sector. 

Industry Leaders React to Nirmala Sitharaman's Budget 2023

ASSOCHAM President Sumant Sinha has also welcomed the Union budget. Sinha said, the announcement made in the budget will improve the ease of doing business and help MSME sector.

The Federation of Indian Chambers of Commerce and Industry (FICCI) has welcomed the Union Budget as balanced and progressive one that gave primacy to inclusive growth.

Focusing on technology and a knowledge-driven economy for FY 23–24 was one of the Union Budget's significant pronouncements. According to the budget, Centres of Excellence for Artificial Intelligence will be established to offer cutting-edge applications and scalable solutions to health-related issues. The main goal of these centres is to further understand and raise public awareness of these new-age technologies. These centres are expected to produce solutions that bring high-quality healthcare facilities to both urban and rural populations. The National Data Governance Policy's announcement is the right move to improve data security and privacy in healthcare. Last but not least, the emphasis on promoting pharmaceutical research and innovation by raising capital spending will boost private businesses and contribute to the creation of long-term treatments for serious diseases. - Apurva Sule, Chief Business Officer, Heaps Health

" The Union Budget 2023-2024 announced by Finance Minister Nirmala Sitharaman is progressive, prudent and growth-led, with an eye to provide impetus on the savings of the public. It is a 'green budget' for the automotive and mobility sectors. The sustainability measures taken through announcements on green hydrogen and other energy sectors will help in furthering the government’s target of carbon neutrality by 2070. The increased Capex outlay on energy transition is likely to spur investments and skill development in a green economy. The viability gap funding for battery energy storage systems is also likely to create critical infrastructure, while custom duty reduction on capital goods for Lithium batteries manufacturing will facilitate faster adoption of EVs. Increase in spending on infrastructure, setting up of 50 new airports and heliports, creation of 100 transport infrastructure projects are welcome moves, in addition to the central support for replacing old vehicles. All of these should drive consumption and overall demand of vehicles."  - Banwari Lal Sharma, CEO, Consumer Business, CarTrade Tech Ltd. 

The announcement to end the oppressing and inhumane practice of manual scavenging with 100% mechanical desludging of septic tanks and sewers in cities from manhole to machine-hole mode is a welcome one, as is the renewed impetus for development of particularly Vulnerable Tribal Groups (PVTGs). Allocation of Rs 15000 crore for developing basic facilities like safe housing, clean drinking water, improved access to education and health of PVTGs communities is a welcome step to address the needs and futures of PVTGs. The initiative of green growth and transition to net-zero carbon and several focused proposals under that are welcome steps. Among others these include national green hydrogen mission, capital investments towards net-zero, PM-PRANAM incentives for mother earth, MISHTI – the Mangrove Initiative and Amrit Dharovar. The State of Climate in Asia 2021 by the World Meteorological Organization and the UN Economic and Social Commission for Asia and the Pacific (ESCAP). Moreover, a World Bank report suggests that by 2030, India may account for 34 million of the projected 80 million global job losses from heat stress associated with productivity decline. In such a situation, budgetary allocation for a national loss and damage financing facility would have been a game changer. Similarly, the initiative to promote millets in the food security programme is a welcome first step which could have gained huge momentum through the additional valuation of such crops in the public procurement system.While the budget has given a big relief to the middle classes, India’s majoritarian working classes need more focus. We may have come out of COVID but precarity of employment continues. PLFS and other data indicate high levels of employment, particularly among youth, continued precarity and constrained household consumptions. In view of this, informal workers of India expected that MGNREGA allocations would at least, if not more, see an allocation of the 2 lakh crores. Instead the allocation has been reduced even further to 60,00 crores, which will reduce employment days available, let alone solve the question of payment of pending wages. India must close the global gap in terms of its social protection expenditure as a percentage of its GDP. India spent only 1.4 per cent of its GDP vis-a-vis the global figure of 13 per cent in 2020. Only 24.4% of India’s population is covered by at least one social security scheme (excluding healthcare) and 55% are covered under universal health coverage.The investment in agri-tech infrastructure and digitization of PACS are welcome steps and make this budget innovative and creative. However, agriculture is still the largest employer at 46.5% of the workforce and has increased marginally from 2019-20 to 2020-21. -Sandeep Chachra, Executive Director, Action Aid Association

"The budget could have done so much more for the social sector. A major lacuna is that the budget does not have any new major schemes for women, though it does attempt to enable existing women’s SHGs to reach their full potential. Given the significant gender gap in India on all developmental indicators and coming from a woman Finance Minister, one expected women’s issues to receive greater attention in the Union Budget. This budget, like previous ones, fails to address the digital divide and also falls short of the target of spending 6% of the GDP on education, which the National Education Policy 2020 has envisaged. The silver lining is the health sector has received adequate focus. Also, education and health of tribals, who are marginalized and constitute about 8% of India’s population, has received attention in this budget. Amongst tribals, the most vulnerable have been focused upon. This is important to safeguard our socio-cultural diversity." -Pranay Aggarwal, Sociology faculty, IAS Gurukul

The government in its last Union budget had placed a lot of significance to health and well-being and that focus has reflected in this year's Union Budget as well. The establishment of 100 new labs for developing apps using 5G services to realise new range of opportunities in healthcare is a much-needed move by the government. Also, the setting up of 3 centres of excellence for artificial intelligence to enable 'Make AI for India' and 'Make AI work for India' will certainly boost India's digital prowess. Another much anticipated move by the government is the plan to establish one hundred and fifty-seven new nursing colleges in co-location with the existing 157 medical colleges established since 2014. This will certainly help the healthcare industry to bridge the gap in care due to shortage of medical personnel. Also, the FM minister announced that dedicated multidisciplinary courses for medical devices will be supported in existing institutions to ensure the availability of skilled manpower for futuristic medical technologies, high-end manufacturing and research. All these essential moves by the government towards health infrastructure and focus on a holistic approach to health is seen as a testimony of India's commitment to building stronger health systems in the country.-Vikram Thaploo, CEO of Apollo Telehealth

MSME sector receives a big boost. by  Mr. KV Srinivasan , Executive Director and CEO of Profectus Capital.

"The budget has provided a significant boost to the MSME sector. Measures such as significant enhancement of credit guarantee scheme with the potential to give Rs 2 trillion additional loans, discouraging delayed payment to MSME vendors, and proposal to enhance the supply of skilled workforce to MSME would improve the competitive position of MSMEs significantly. Increased limit on presumptive tax to Rs 3 cr turnover subject to a maximum of 5% cash receipts would provide huge tax relief while enhancing transparency by reducing unreported cash income. The overall message is, 'Be transparent and gain a tax advantage'."

"The proposal to simplify the KYC process and make it risk-based would hugely aid the financial sector and reduce common citizens' difficulties."

post budget fiscal math comment by Srinivas Rao Ravuri, Chief Investment Officer (CIO), PGIM India Mutual Fund. 

Srinivas Rao Ravuri, Chief Investment Officer (CIO), PGIM India Mutual Fund- The Union Budget for FY24 is a well balanced budget targeting fiscal prudence, investment push as well as some populist moves in equal measures. Fiscal math appears to reliable as before. Government seems to be targeting inclusive growth with a focus on lower and middle class, spurring domestic manufacturing and infrastructure development. We reckon this is a growth oriented budget hinging on pragmatism." 

Budget reaction by Mahendra Jajoo, CIO fixed income, Mirae Asset Investment Managers

This budget focuses on long term vision, structural reforms and infrastructure and social development. Highest ever capital expenditure of 10tn, on a already high base of last year, is a very encouraging signal for continued positive momentum in Indian economy. Theme of inclusive development and empowerment of women and weaker sections of society would also further strengthen ongoing trend of widening participation by all sections in countries growing prosperity. On Fiscal front, net borrowings projected at INR 11.8tn works to 5.9% of GDP which is a huge improvement on 6.4% last fiscal. Further, finance minister reiterated the commitment to bring the deficit below 4.5% by FY 2025-26. With nominal GDP growth projected at 10.3% and inflation expected to continue easing in coming months, interested rates are expected to stabilize around current levels. A strong budget will also comfort the MPC on supply side management of inflation, growth momentum and fiscal stability which may in turn provide some elbow room for accommodative stance at the margin.

We expect MPC to shift to a pause mood along side other major global central banks by Q2CY23 even as there may still be some rate hike left. Long term rates may already have peaked in current cycle and may stabilize around current range for the time being. Encouraged by in-line borrowing schedule for FY 23-24 and the analysis that nearly 65% of the fiscal deficit is for capital expenditure, bond yields eased by 5-8 bps during the day. Benchmark 10Y govt bond yield was last trading at 7.29%, down 5 bps for the day.

" To help India move up the value chain in the Life Sciences sector, the government intent to invest in setting up centres of excellence to promote research and development in pharma is an excellent move . 157 new Nursing colleges, sickle cell anemia reduction program, pharma research, and PPP for medical research is much needed . Facilities in select ICMR labs to be made available for research is  a good move"-  Krishna Prasad Vunnam-  Founder and MD Ankura  Hospital for women and  Children

Being the last full budget before the Lok Sabha elections in 2024, a lot of pressure on fiscal resources will have to be balanced with maintaining a feel-good factor among the people. The worst affected group by the recession in the West would be women and the youth with diminishing job opportunities and exports. It will be a challenge to orchestrate and promote opportunities for the youth, women, artisans, the working middle class, the rural and the unorganized sectors. All in all, an enormous responsibility lies on the government's shoulders to make the economy robust." - Aashisha Chakraborty, bestselling author, columnist, poet

It is encouraging and timely that the Government of India has included sustainable cities of tomorrow and developing key infrastructure in Tier 2 & Tier 3 cities as an important part in the 2023-24 Union Budget. In the backdrop of India's presidency of the G-20 summit this year, and our crucial role in negotiations around climate change and adaptation funding for developing economies at COP 27 last year, we see incredible opportunities for inclusive and integrated approach to building climate resilient and sustainable green cities." -Sandhya Naidu Janardhan, Founder & MD of Community Design Agency

Abhishek Jain, Fellow & Director- Powering Livelihoods, CEEW "Over the years, we have seen hundreds of agri-focused start-ups bridging the information gap for the farmers but limited innovation on hardcore technologies. I hope that the newly announced Agriculture Accelerator Fund brings an explicit focus on hardware technological innovations to address challenges like pest and weed management, affordable storage, and post-harvest solutions, as well as innovations for the livestock and allied sectors."

“The Union Budget FY23-24 is an extremely progressive and inclusive one with a huge focus on infrastructure and capex growth while maintaining the fiscal consolidation path. With fiscal deficit being reduced to 5.9% whilst providing an extremely bullish capex investment of Rs. 10 lac crs (highest ever); will in effect convert revenue expenditure to capital expenditure which has a higher multiplier effect.  It will also mean net borrowing by the Govt being lower than anticipated at Rs. 11.8 lac crs and that augurs well for the bond market and the corporate sector as a whole. Moreover with tax relief at an individual level would mean an additional Rs. 35,000 crs available for consumption. Fuelled by ease of doing business related policies and regulations, this will bolster growth especially in the highly regulated financial services space. For a category like general insurance, these macro economic indicators would provide the much-needed thrust for bridging the penetration gap in the country.

There are some pertinent developments that will enable growth for the industry in the longer horizon. The focus on tourism will pave the way for not just generating employment and investments but also travel insurance in the long term. We have always been zealot about capacity and capability building in health arena and Govt setting up nursing colleges is  a positive development. Infact I believe the CoE on AI being set up could be a game changer with access to right talent pool in India. On the auto front, the old vehicle and ambulance scrapping policy is a step in the right direction. Overall, the budget this year has been growth oriented while also being fiscally responsible which is laudable.”ICICI Lombard MD and CEO (Mr. Bhargav Dasgupta)

The Union Budget of 2023 announced major initiatives for the health sector, which is a positive step toward ensuring that the people of India have access to high-quality healthcare. However, we believe there are some areas where assistance could be more effective.

We applaud the announcement of new nursing colleges in major Indian cities. This will contribute to better infrastructure and facilities for students pursuing nursing degrees. We also applaud the announcement of 157 new medical colleges since 2014, which will help improve the availability of trained doctors in rural areas where there is currently no medical school or hospital nearby, allowing them to access better health care.

We also welcome efforts to eliminate sickle cell anemia by 2047 because this disease disproportionately affects children living in rural communities with limited access to education or healthcare services, preventing complications later in life.

In existing institutions, dedicated multidisciplinary centers for medical devices will be supported in order to develop futuristic medical technologies, innovation, and research.
We applaud these initiatives and look forward to working with our Kamineni Hospitals partners and other stakeholders to provide quality healthcare to our patients. - Dr Gayatri Kamineni, COO, Kamineni Hospitals

Mr Satyamohan Yanambaka, CEO, Writer Information Management Services for the tech sector. 

A Digital ready budget for a new Digital India

“The Union Budget is forward-looking, echoes India’s Digital India vision, and provides impetus to the journey to India@100 for a more resilient and digital-ready country. Technology has found its way in multiple sectors, and the government’s push for ‘Make AI in India’ and ‘Make AI work for India’ will augur well for Industry 4.0. The centres of excellence will help to build a robust research ecosystem and create scalable solutions.”

“The tech sector will require a digital-ready workforce, and this move, along with the decision to set up 30 Skill India International centres to teach coding, AI, IoT, robotics, 3D printing, and drones, will enable nurturing of a large talent pool that can drive the Digital India mission. We are pleased that the government has recognized technology and integrated it into the vision for Amrit Kaal.”

“We applaud the government's stance around data accessibility and management. Starting off with the redrafted version of the Data Protection Bill last year which aims to safeguard personal data and prevent data breaches to now the National Data Governance Policy which will catalyse an era of Digital Government. With an aim for increased citizen awareness and engagement with open data, it will pave the way for better decision making without compromising on while adhering to data protection standards and privacy.”

“The outlay of INR 7,000 crore for e-courts that automatically generate records during hearings will enable the speedy delivery of justice. Initiatives like enabling more fintech through expanding the scope of documents available in digilockers and setting up 100 labs to develop apps using 5G services in the budget only magnify the Digital India vision. We were hopeful that the government would introduce capital incentives for private players propelling the digital India mission and provisions for bringing local data centres under the Vocal for Local policy. Nevertheless, we look forward to contributing towards building a nation that competes globally.”

Priyanka Wadhwa, Co-Owner, Kapila Krishi Udyog Limited & Co founder, CommsCredible

"With the finance minister announcing the launch of an agriculture accelerator fund for young entrepreneurs, the agritech industry and startups will get a major boost in growth. Agro companies that are decades old will see increased productivity through the use of new-age technologies. Building a digital public infrastructure will also offer a host of farmer centric solutions which will assist farmers in improving their farm output as well as income.  This will ultimately lead to economic empowerment, especially of rural women. Moreover, digitization of agriculture is also in line with the government’s objective of financial inclusion and creating an Atmanirbhar Bharat''

Mr. Ajitesh Korupolu, Founder & CEO, ASBL 

“First of all, I’d like to congratulate everyone for the new income tax regime announced. With multiple initiatives aimed at infrastructural development, the government has ensured that taxpayers and businesses alike have several causes for celebration.

Among the Urban Planning initiatives, the enhanced opportunities for private investment, transit-oriented focus on development and considerations for urban sanitation will be key drivers that improve the quality of life in our cities. The proposed Artificial Intelligence-led research in Sustainable Cities will hopefully solve many complexities we face in the design, construction and planning of urban landscapes."

Mr. Krishna Bodanapu, MD & CEO, Cyient

Commenting on the Budget 2023 announcement today, Mr. Krishna Bodanapu, MD & CEO, Cyient, says, “It is a good budget that balances the three pillars of the Indian economy – agriculture, manufacturing, and services. It is very promising to see long-term investments with a significant increase in capital expenditure and the focus on accelerating technology with initiatives in 5G labs, agricultural tech, and AI”.

“The government is taking technology adoption and usage very seriously and looking at ways technology can benefit everyone. Hence spending and focusing on technology-related initiatives, including training and skill development for the future, is a good way forward. The technology solutions industry will greatly benefit from the immediate spending and the vibrant ecosystem it will create”, says Mr. Krishna Bodanapu.

“I am glad the government is taking the continued initiative to address climate change and its related challenges. The use of alternative fertilisers, green credit, and incentives will go a long way in ensuring we, as a country, do our part toward meeting our climate commitments,” added Mr. Bodanapu.

Mr. Ameen Khwaja, Founder & CEO, pTron

he Union Budget 2023 is a progressive & far-sighted one that lays significant emphasis on supporting the growth of start-ups & proposes several measures aimed at fostering a favourable environment for startups to thrive & succeed. While there is no big-ticket announcement for the FMCE sector as a whole, there are still a few indirect positive impacts on the industry. As per the Economic survey of 2023, India is now the 2nd largest Mobile manufacturer in the World & also saw a 200% increase in rural internet subscriptions as against 158% in urban areas between 2015 & 2021. As announced in the Budget 2023, the GOI’s(Government of India) invested approach of “Reaching the last Mile” to make the remotest area connected and robust plan to leverage 5G services applications for a digitally strong tomorrow, shall further boost the internet penetration in the rural areas. This shall surely bring a new age of opportunity to the FMCE sector with promising growth due to an increase in demand for FMCE products.” - Mr. Ameen Khwaja, Founder & CEO, pTron

Mr Nitin Raj, CEO and Co Founder, Riverum- Travel tech Company- Startup

This is a significant increase and will definitely send some shock waves but the tour and travel industry that has already learnt and experienced so much during the 2 years long hefty covid outbreak and hopefully it will surely find a work around for this as well. However this tax collection at source is for the tour packages above Rs 50 lakhs. If we look at it from another point of view then in a way it is good and promotes domestic tourism and there is a lot more demand for domestic packages than international ones. There is also a possibility that high cost tour packages can now be split into multiple travel plans by tour operators and travel agents. Furthermore the devil is in detail for both sides in this case. Will it have an impact on the demand in travellers for high cost travel packages is yet to be determined.

Achal Kothari, Co-founder & VP - Business, ByteBeam- AI & Iot device management Company- Startup

The 2023 Budget lays out a clear vision for India’s future with a focus on physical infrastructure, such as roads and rails, and investment in new technologies like AI to spur economic growth. The move to exempt raw materials for Li-ion battery manufacturing and emphasis on reducing carbon emissions is a strong signal that the government is committed to promoting sustainable technologies like electric vehicles. This budget is poised to drive the accelerated adoption of EVs and related technologies like chips, connectivity modules, and TCUs.

Pushkar Singh, Partner at Tremis Capital - An early-stage investment firm that invests in highly curated startups

The Union Budget 2023 paves the way for a brighter future and gives a significant boost to the fintech sector by simplifying the KYC and identity verification process. A one-stop solution for identity and address reconciliation using an expanded DigiLocker and the use of PAN as a business identifier for digital systems will significantly reduce compliance for fintech companies. Simplifying KYC norms on a risk-based principle will enable greater ease of transactions and reduce dropout rates. Players will have access to anonymized data, allowing them to provide more innovative and customised financial services to customers, driving financial inclusion and promoting economic growth. The government's commitment to creating a supportive environment for fintech companies recognizes their critical role in driving India's economy. This budget is quite favourable for the fintech ecosystem in India.

Gaurav Kapoor, Chief Finance Officer, Baazi Games- An online gaming Platform

We welcome the Amrit Kaal Union Budget 2023 with an optimistic perspective. The new income tax regime will result in stimulating local demand and consumption in the economy. The rise of India’s position from an importer to an exporter of mobile phones in India augurs well for the online gaming sector. Moreover, the announcement of setting up 100 labs for developing 5G services apps for smart classrooms, healthcare, and others will open up a new range of opportunities and potential employment. Simplifying the KYC system process will further help in realising ‘Digital India’ and will enable a seamless experience for consumers. Lastly, the ‘Make in India’ vision will further get a boost with a focus on “Make AI in India and Make AI work for India”, online gaming companies can develop new AI-based advancements that can provide a first-of-its-kind experience to users.

Hiranmay Mallick, CEO & Co-Founder at Tummoc – A public transit app 

Glad to see the priority given to 'Green Growth' in this year's budget. Sustainability and steps towards net zero carbon emissions are the need of the hour. With the global climate crisis, it's time for us all as individuals, entrepreneurs, and changemakers to start playing our roles. The green credit programme planned as a part of this initiative is one that will encourage and incentivize sustainable choices in an otherwise majorly non-sustainable corporate world. Mass transition to public transport as a primary mode of commute will indeed play its role towards reducing carbon emissions.

Monalisha Thakur, Co-founder & CMO at Tummoc - A public transit app 

The Mahila Samman Bachat Patra scheme is a great initiative for blue-collared women employees as it allows them to save more not only for themselves but for their families. The scheme can also be used to allow parents to save more for girl children thus taking a step towards securing their futures. A rate of interest of 7.5% allows them to beat inflation, thus giving them a better chance during tough economic conditions. There are also a number of other initiatives announced in the budget that are a step in the right direction. Especially the priority given to 'Green Growth' which will only lead to a cleaner, greener tomorrow for society as a whole.

Dr. Santanu Paul, CEO and MD, TalentSprint:

“We welcome the Government of India’s proposal to set up three "Centers of Excellence for Artificial Intelligence" in top educational institutions in collaboration with leading industries with the goal of researching and developing practical AI applications. AI is a horizontal technology, which means there are applications across industries in every sector.  While we would like to see the impact in agriculture, health, and sustainable cities, financial inclusion will need to be addressed too.  Inclusive banking and citizen-scale financial services is where AI must also make an impact.

The $5 trillion economy that the government is pegging for will require AI to play a transformational role. I would say that besides the industries already mentioned by the Honourable Finance Minister, sectors that need to be considered for a sustainable future are automotive, aviation, education, housing, logistics and transportation. In all industries that are deeply intertwined with our modern experience, where we are actively involved as producers or consumers or beneficiaries, there will be immense impact. Simultaneously, focus needs to be on scaling up talent required to spearhead this evolved ecosystem, and to serve as the workforce of the future.

Gautam Chopra, Co-Founder, and CEO, BeatO:

Even though the Budget this year focuses on strengthening the healthcare infrastructure, it is prudent to point out that the growing demands on our healthcare system cannot be met only by increasing the physical infrastructure. The setting up of 157 new nursing colleges is a huge step towards meeting the ever growing demand for providing care through paramedical staff. However, for care to reach those who really need it, it is imperative that they can leverage simple and affordable digital technology, which will help them reach the masses and serve them more efficiently.  Integrating this initiative with the Ayushman Bharat Digital Mission will be key to delivering services to the last mile.

Indian pharmaceuticals are known across the world for giving us cost-effective drugs, but we still lack innovation in new drugs, molecules, and therapies. Opening up of Indian Council of Medical Research (ICMR) laboratories for research by public and private medical college faculty members and private sector research and development teams to encourage collaborative work will produce great results in providing a sustainable ecosystem for research and development.

The dedicated multidisciplinary courses for medical devices, fueled by skilled and technically equipped manpower, will make India the hub for creating new-age affordable medical devices like wearables and drive the trust in digital health.

More support and allocation of resources for health-tech start-ups to become effective would have been appreciated, as well as integration of digital solutions by such startups within the public health system would help them take their products and services further and reduce the burden on the system. In last year’s Budget, the government proposed providing up to Rs 2,000 crore as venture capital to create an ecosystem for health-tech start-ups to help them access capital and develop innovative products and services but we haven’t seen concrete steps followed in the deployment.

Mr Aryendra Kumar, Executive Director and Chief Executive Officer - IKF Home Finance

IKF Home Finance is welcoming the Union Budget presented Hon’ble Finance Minister Smt Nirmala Sitharaman announcing the hike by 66 percent for the PM Awas Yojana which is outlay to ₹79,000 crore in Budget 2023-24. Finance Minister has increased FY24 capital investment outlay by 33 percent to ₹10 lakh crore, establishing 3.3 percent of GDP. This will not only increase economic growth but also result in increasing employment opportunities, assisting rural India for higher consumption too. This move would certainly give a significant boost to capital goods and infra companies as well.

The PM Awas Yojana with a mission of ‘Housing for All’, IKF Home Finance recommends Government of India to consider  some taxation incentives to Housing finance Companies - at least in the next budget, as they are providing support in developing housing in smaller towns  Housing  Finance companies has a great potential in fulfilling the mission of ‘Housing for All’

Mr Rama Raju, CEO, IKF Finance

India’s Finance Minister, Nirmala Sitharaman presented the Union budget 2023-24 with an equal emphasis on Investment in Infrastructure, Green Growth and Financial Sectors.
 
Investments in Infrastructure, Capex building will have a large multiplier impact on growth and employment. With the FM’s decision on continuing 50-year interest free loan to States for one more year will spur investment and infrastructure developments. Creation of 100 critical transport infrastructure projects, 50 new airports and heliports are appreciated moves. This will open-up financing opportunities directly in Infrastructure and Transportation Sectors and indirectly in Cement, Steel and other allied Sectors.

It’s a Green Budget for the Automobile Sector. More funds are allocated to scrapping old vehicles, including ambulances of the central and state government. The new development will benefit auto manufacturers in the country with the replacement of old vehicles. The viability gap funding for battery energy storage systems is also likely to create critical infrastructure, while custom duty reduction on capital goods for Lithium batteries manufacturing will facilitate faster adoption of EVs.

For the Financial Sector, the adoption of risk based simplified KYC process of individuals maintained by various government agencies and Common business identifier for business establishments through PAN Number to bring in ease of evaluation and faster decisions by NBFC’s. Expanding storage and sharing of KYC and critical documents in Digilocker for individuals, MSMEs, and large businesses is a welcome move.

Mr. M. Nanda Kishore, Managing Director, Ramky Estates & Farms Limited

“The 33% increase in Capex reflects the Govt’s focus on the long-term growth and stability of the economy. It will further create employment opportunities as well as provide fillup to capex from the private sector. The Urban Planning & Infrastructure Fund proposed in Union Budget 2023 takes development beyond Metros. A multitude of Transport Infrastructure Projects and 50 new airports will increase the prominence to tier-2 & 3 cities. They will be accompanied by an influx of institutions and businesses, resulting in flourishing realty.”

Mr. Masood Mallick, CEO, Re Sustainability Limited (ReSL) 

“India’s COP26 commitments have received a major boost from a set of unprecedented ‘Green Growth’ elements proposed in Union Budget 2023.

The initiatives proposed directly align with the goals pledged by our Hon'ble Prime Minister at the Summit and this is probably the most significant step we have taken as a nation toward the mainstreaming of a climate-responsive agenda. As a result of this budget, we should see significant progress in our energy transition journey including, but not limited to, scaling up of bio-energy/ CBG and Green Hydrogen. In addition, a number of fiscal support measures have been announced for other critical Green Economy elements. Unprecedented measures to enhance natural capital creation, including biodiversity, sustainable farming, afforestation, eco-tourism, carbon stock management and sustainable agriculture, have also found a space in this budget.

In summary, today, the sustainability sector has much to celebrate. Sustainability has clearly taken centre stage in the government’s development agenda, possibly for the very first time.”

Deepak Aggarwal, Co-Founder, Moneyboxx

We welcome the decision of increasing the Agriculture Credit Target to Rs20 lakh crore while focusing on animal husbandry, dairy and fisheries. Moreover, a new sub-scheme of the PM Matsya Sampada Yojana will be launched with a targeted investment of Rs6,000 crore. Establishing an Agriculture Accelerator Fund to encourage agri start-ups by young entrepreneurs in rural regions is also laudable. The Fund aims at providing innovative, affordable solutions for challenges faced by farmers. It will also help introduce modern technologies to transform agricultural practices while increasing productivity and profitability.

Another good measure to extend the Credit Guarantee Scheme for MSMEs along with an infusion of Rs9,000 crore with effect from 01 April is a most welcome move as it will facilitate additional collateral-free guaranteed credit of Rs2 lakh crore for MSMEs. In fact, last year itself we had suggested revamping the credit guarantee scheme for MSMEs. Significantly, the scheme will nudge banks to lend to MSMEs, which they were earlier reluctant to do because of the absence of adequate collateral. This will lower the cost of credit by around 1% and benefit the fund-starved segment.

Mr. Rahul Attuluri, CEO and Co-founder at NxtWave

We wholeheartedly welcome the Government’s initiatives announced in the Budget 2023-24. The re-envisioning of Teachers Training through integrated curriculum transaction, continuous professional development, dipstick service, ICT implementation and the development of the district Institute of Education and Training as institutes of excellence are a great move towards augmenting the existing education ecosystem in the country. Also, the setting up of the National Digital Library for children and adolescents where quality books across geographies, languages, and levels and device agnostic accessibility will be made available is a great initiative to make up for lost learning time students faced during the pandemic.

The youth are the future of the country. Therefore, to empower youth and to help the Amrit Peedhi realize their dreams, the Government’s National Education Policy will especially focus on skilling youths by adopting economic policies that facilitate job creation. The Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to skill lakhs of youth in the next three years. Moreover, to skill the youth for international employment opportunities, over 30 Skill India International Centres will be set up across different States.

NxtWave is always ready to take forward the vision of the Government and empower Indian youth with required skills and become job-ready.  We are happy that the government is establishing a strong AI ecosystem in India to train skilled AI professionals. This will help us to develop practical AI applications in regional and sustainable cities.

Ankur Nijhawan, CEO, AXA France Vie India Reinsurance Branch

This budget has touched upon various facets of major importance to our economy including focus on last mile, green growth, infrastructure and development, youth power and inclusive development. Focus on agriculture sector with enhancing storage capacities and establishing an accelerator fund for startups serves as a watershed to increase earnings and innovation in this segment. Budget allocation towards research in pharma and health is a step in the right direction which would further make India atmanirbhar. Budget has also very aptly recognised the importance of AI by allocation of funds towards setting up of specialised AI centres in educational institutes which would enable finding solutions in agri, health and sustainable cities. Reduction in duties on goods for manufacturing lithium-ion batteries would be a major step to reduce cost of EVs and promote green growth.

Further, change in the income tax slabs is a major  development towards making India a more consumer driven economy.  It would leave more money in the hands of individuals giving them the liberty and power to decide where to spend. The new tax regime does not allow exemptions on savings like the earlier one. This change poses a major need for sectors like insurance to create a product which is consumer focused. Consumer has so far been buying it to avail tax incentives however, this new change demands that the sector revamp its offering to meet consumer expectations and servicing requirements to create demand by offering customised, user friendly offerings and improving the customer experience.

Mr. Rakesh Kaul, Executive Director and CEO, Clix Capital

“It is a balanced budget and growth oriented. Given that NBFCs have been playing a pivotal role in providing easy access to credit for MSMEs, we expected to see some incentives being announced for the growth of NBFCs. It is good to see that the Government has rationalized taxation in the MSME sector and other initiatives that will play a decisive role in easing their burden.

We believe the following measures announced will catalyze the MSME ecosystem tremendously. For instance, micro-enterprises with a turnover of up to 2 crore and certain professionals with a turnover of up to 50 lakhs will get the benefit of presumptive taxation. The limits have been increased to 3 crores and 75 lakhs respectively to taxpayers whose cash receipts are not more than 5 percent. Further, to ensure that MSMEs receive payments on time, the Government has proposed to allow a deduction for expenditure incurred on payments made to them only once the payments are actually made. In addition, taking into account that MSMEs have faced many challenges during the pandemic, the refund of 95 percent to MSMEs is a welcome move. The DigiLocker app that had been created will now be made available to MSMEs, large businesses, and charitable trusts, where they will be able to store and share documents online in a secure manner with various authorities, regulators, banks, and other business entities. The Government has infused 9,000 crores in the corpus for this, enabling additional collateral-free guaranteed credit of ` 2 lakh crore. The Digilocker services will be a boost to fintech startups as well, as up till now, DPI only allows individuals to store and share their certificates, such as academic records, driving licenses, and PAN cards.

Further, the KYC process has also been simplified by taking a risk-based approach. A one-stop solution for updating identity will be established using Digilocker service and Aadhaar as foundational identity. The Permanent Account Number (PAN) will be used as a common identifier for all digital systems of government agencies.

In addition, as MSME skilling is an important aspect that needs to be addressed, the Government has announced a digital ecosystem for skilling. A unified Skill India Digital platform will be set up that will focus on demand-based formal skilling, linking with employers including MSMEs, and facilitating access to entrepreneurship schemes.”

Mr. Gaurav Jalan, Founder & CEO, mPokket

“While we expected to see more announcements around the fintech sector, some of the welcome moves are the expansion of Digilocker services that will allow fintechs to store and share documents online in a secure manner with various authorities, regulators, banks, and other entities. The fintech sector has benefited much from prior Government initiatives, such as PM Jan Dhan Yojana, Indian Stack, and UPI.

We would also like to highlight certain measures announced in the Economic Survey 2023, such as the simplification of employee stock option (ESOP) taxes, capital gains tax regimes like those existing in Singapore, UAE, and the Netherlands, and capital flow procedures akin to the US and Singapore to accelerate reverse-flipping of startups back to India. This plays a major role in strengthening the domestic economy. Startups have always been one of our key engines for economic growth and it’s great to see that the number of recognized startups in the country has increased from 452 in 2016 to 84,012 in 2022. About 48 percent of our startups are from tier 2 & 3 cities and our country today is the third largest ecosystem for start-ups globally and ranks second in innovation quality among middle-income countries.

Entrepreneurship is truly vital for a country’s economic growth and towards this, the Government has extended the date of incorporation for income tax benefits to start-ups from 31.03.23 to 31.3.24. It has further proposed to provide the benefit of carrying forward of losses on change of shareholding of start-ups from seven years of incorporation to ten years. This is truly a welcome move.”

Nitya Sharma, Co-Founder and CEO, Simpl

We welcome the budget for providing much-needed impetus to the country’s startup ecosystem. Announcements such as the extension of the date of incorporation for income tax benefits to start-ups from 31st March 2023 to 31st March 2024 and the provision of providing the benefit of carry forward of losses on change of shareholding of start-ups from seven years of incorporation to ten years, are truly great moves. Moreover, the government has also deducted a whopping 39,000 compliances that MSMEs needed to abide by and decriminalised over 3,400 legal provisions. Such steps will play an instrumental role in ensuring the ease of doing business in the country. Entrepreneurship is the very backbone of India’s economic development. Therefore, the measures suggested in the recently unveiled economic survey, such as capital gains tax regimes like those of Singapore and the UAE and capital flow procedures similar to those in countries like the US and Singapore, to accelerate the reverse-flipping of startups back to Indian shores, are vital moves.We welcome the budget for providing much-needed impetus to the country’s startup ecosystem. Announcements such as the extension of the date of incorporation for income tax benefits to start-ups from 31st March 2023 to 31st March 2024 and the provision of providing the benefit of carry forward of losses on change of shareholding of start-ups from seven years of incorporation to ten years, are truly great moves. Moreover, the government has also deducted a whopping 39,000 compliances that MSMEs needed to abide by and decriminalised over 3,400 legal provisions. Such steps will play an instrumental role in ensuring the ease of doing business in the country. Entrepreneurship is the very backbone of India’s economic development. Therefore, the measures suggested in the recently unveiled economic survey, such as capital gains tax regimes like those of Singapore and the UAE and capital flow procedures similar to those in countries like the US and Singapore, to accelerate the reverse-flipping of startups back to Indian shores, are vital moves.

Akash Dahiya, Co-Founder , SanKash

“The Union Budget 2023-24 has some positive takeaways for tourism, given the decision to promote the industry on mission mode via the participation of states, the convergence of government schemes and public-private partnerships. The country offers immense attractions for both domestic and foreign tourists. A proactive approach will help in tapping India’s tremendous tourism potential. Through an integrated approach, a minimum of 50 destinations are to be selected via the challenge mode. Under the ‘Dekho Apna Desh’ initiative, every destination will then be developed as a complete package for tourists. Besides, through the Vibrant Villages Programme, infrastructure and amenities for tourists would be facilitated in border villages.”

SK Chaudhary, Founder Director , Safex

“The 2023-24 Union Budget has many positive features for agriculture and agri industries. The decision to build digital public infrastructure for agriculture as an open standard, open source and inter-operable public good is commendable since itwill help the industry, pan-India. This would facilitate multiple inclusive, farmer-centric solutions with relevant information services spanning crop planning, farm inputs, insurance, credit and market intelligence as well as support for the growth of the agri-tech segment and start-ups.

Additionally, establishing an Agriculture Accelerator Fund would encourage young entrepreneurs to set up agri start-ups in rural regions. While overcoming problems faced by farmers, the Fund will help by introducing modern technology, transforming agri practices and enhancing productivity as well as profitability. Horticulture will also gain via an allocation of Rs2,200 crore under the Atmanirbhar Clean Plant Programme to increase the availability of disease-free, high-value horticultural crops.

Finally, increasing the agriculture credit target to Rs20 lakh crore keeping the focus on dairy, animal husbandry and fisheries will benefit all three verticals.”

Nirmit Parikh, Founder & CEO, apna

The central government’s push to skilling in the country for lakhs of youth in the Budget 2023-24 is a welcome move, considering the youth are the pillars of our economy. This initiative will open avenues and create millions of job opportunities in emerging technologies for over 100 million youth in the country – a huge motivation for students and graduates to thrive and succeed in their home country. Furthermore, I also commend the Government’s announcement around the launch of a unified Skill India Digital platform for enabling demand-based formal skilling, linking with employers including MSMEs, and facilitating access to entrepreneurship schemes. The vision of empowering youth and MSMEs is a strong blueprint for India@100 which is being built on inclusive India.

Himanshu Chakrawarti, CEO, Snapdeal Marketplace

India’s vast consumption is a key part of our economic strength. Budget 2023 will put more money in the hands of mid-income users and that will have a direct and beneficial impact on consumer spending especially in the value segment.

Divya Gokulnath, Co-founder, BYJU'S

“With a focus on digitalization and formalization, the budget is investing in digital public infrastructure that will position India for continued growth and competitiveness. The education sector is a key area of investment, with the launch of PM Schools for Rising India, the recruitment of 38,800 teachers, and the establishment of a National Digital Library for children. These initiatives will help equip students with the skills and knowledge needed for success in the future, and the emphasis on teacher training and innovative pedagogy will ensure that the quality of education in India continues to improve. This forward-thinking budget sets India on a path towards self-reliance and global competitiveness.”

Rohit Arora, CEO and Co-founder, Biz2credit and Biz2X

We welcome the initiatives announced by the Government in the Budget 2023-24, however there still remain certain challenges that should be addressed on priority. For instance, the Government has today provided extra corpus to MSMEs, however the credit disbursed to MSMEs in India through this scheme is only a meager 7 to 8 percent, compared to that in the United States, which is a whopping 30 percent. Also, the CGTMSE scheme is currently being used by large banks while the smaller NBFCs do not get adequate access. This has impacted the securitization market for CGTMSE loans.

Furthermore, in the US for instance, MSME credit assessment is a streamlined process as all data relating to liens, lawsuits and judgements, and other legal information lies with the Secretary of State. In the budget, though the Government has proposed a national centralized registry for data or information, it needs to be modeled in a way that is existing in the US.

Also, considering that MSMEs has suffered the most during the pandemic, the refunding of 95 percent to MSMEs is a welcome move. However, going forward, the Government should put it in line with force majeure clauses as some of the MSMEs had beseeched that during the pandemic.

Jeremy Zook, Director and Primary Sovereign analyst for India, Fitch Ratings.

The budget presented yesterday was largely in line with our expectations from when we affirmed India’s ‘BBB-’ rating with a Stable Outlook in December last year. As such, it does not significantly change the sovereign credit profile. India’s fiscal deficit and government debt ratio are high relative to peer medians, but the government’s emphasis on reducing the deficit helps to stabilise the debt ratio over the medium term.

This budget sought to maintain a balance of sustaining a growth-oriented focus through a further increase in capex spending, while maintaining an eye toward deficit reduction. The government aims for modest fiscal consolidation, while accommodating a higher capex spend and changes to income tax slabs, largely by substantially reducing subsidies in the coming year.

Given the still uncertain outlook for the global economy and commodity prices, there is potential downside risk to the deficit target before the next general elections, in particular in the event that a shock such as another commodity price spike leads to pressures for sustained subsidy spending.

The budget’s nominal growth and revenue assumptions are broadly credible, in our view, though risks remain tilted to the downside given the uncertain global outlook. The government’s real GDP growth assumption of 6.5% is slightly higher than our 6.2%, but nominal growth forecasts are similar.

The government’s continued emphasis on ramping up capex spending should provide a fillip to both near- and medium-term growth. We believe India is well-placed to sustain higher rates of growth in the medium-term than many of its peers, with the capex drive helping to underpin this view.

We still believe it will likely be challenging for the government to achieve its 4.5% of GDP deficit target by FY26, as achieving this target implies an additional 0.7% of GDP consolidation in each of the subsequent two fiscal years. Nevertheless, the commitment to reducing the fiscal deficit is a positive signal for debt sustainability.

Over the next five years we forecast India’s government debt to GDP ratio to stabilise at around 82%. This is based on a continued path of gradual deficit reduction, as well as robust nominal growth of around 10.5% of GDP. Our robust growth outlook for India is a key factor supporting the stabilisation of the debt ratio in the absence of stronger deficit reduction.

Mayank Kumar, Co-Founder and Managing Director, upGrad

The Union Budget highlights the government's focus on Care, Green, and Digital – three crucial themes that will continue to shape our economy. The good push on specialized education in nursing and medical devices, as well as the strengthening of teacher training, will help build a strong foundation for our healthcare system. The promotion of online learning through Mission Karmayogi and the IGOT platform will further drive the adoption of digital technologies, even across rural and remote regions. Another significant milestone includes the focus on setting up more AI and 5G labs and R&D centres and the need for a skilled talent pool to support this adoption, which will drive the digital transformation of our economy. It will enable 'Make AI for India' and 'Make AI work for India’ a reality while also pushing the growth peddle significantly. Emphasis on the importance of Skilling and Upskilling in New-Age and Industry 4.0 Skills, will prepare Indian Talent for International Demand and position India as the Global Talent Capital of the world. We expect a wider collaboration between the government and TSPs (Technology Service Providers) in the coming times for ensuring our talent remains armed with future-ready skills and domain expertise. The budget's proposal to provide stipend support to over INR 47 lakh youth is a major move to encourage skilling. Overall, the budget strikes a balance between caring for our citizens, protecting our environment, and harnessing the power of technology to build stronger and more progressive infrastructure for us. It is a stepping stone during the first phase of Amrit Kaal to make India a global superpower in terms of skilled manpower, technology and business growth.

Mr. Jayadev Galla, Chairman of Amara Raja group

Overall a good budget with much-needed relief to the common man with revisions in the I-T slabs and push for the agriculture and infrastructure segment. The Union Budget 2023-24 lays down a sustainable growth with a multi-pronged strategy for green energy and mobility segment. The schemes and initiatives announced under ‘Green Growth’ will accelerate the new energy sector and push India towards its commitment to Net-Zero targets by 2070.

With a total outlay of Rs 35,000 crore for the energy transition segment, custom duty exemptions on the import of capital goods and machinery for lithium-ion batteries and additional Rs 19,500 crore for National Green Hydrogen Mission will provide a fillip to the EV and allied industries and will reduce dependence on fossil fuels. The support through a viability gap funding to set up a battery storage capacity of 4,000 MWH will create critical infrastructure that makes renewable energy storage a reality. In addition, the other initiatives to re-energize the automobile and EV sector are also a welcome move.

Nishant Pitti, CEO and Co-founder, EaseMyTrip

A new chapter in India’s travel and tourism industry is set to begin as the Budget 2023 announcement comes to a close. The positive outlook for the industry displayed by FM Nirmala Sitharaman early on in her speech is highly commendable, taking up the agenda for promoting tourism in the country on “mission mode,” and will play a vital role in reviving the landscape of tourism in India. The initiative to provide additional infrastructural support with fifty new airports, heliports, water aerodromes, and advanced landing zones in India, along with the simplification of registration and overall regulations under the GIFT IFSC will pave the way for new entrants in the aviation industry, which has experienced increasing demand both domestically and internationally. Theme-based tourist circuits and introduction of ‘unity malls’ by states to promote locally manufactured goods is yet another move that will result in revitalising the tourism industry, along with providing multiple opportunities for employment generation and entrepreneurship. Moreover, the introduction of the new Income Tax slabs will avail newer and better opportunities for people to travel and discover India’s rich diversity.

Rikant Pittie, Co-founder, EaseMyTrip

One of the striking features of today’s Budget 23 announcement was the echoing of India’s global recognition as a powerhouse of entrepreneurship and innovation. This was mirrored in the government’s initiative to support the vibrant ecosystem by extending the date of incorporation for income tax benefits from 31 March, 2023 to 31 March, 2024. This will provide opportunity for several startups to flourish, especially in the travel and tourism industry, which are yet to recover from the blows that were dealt during the pandemic. The foresight shown with the proposal of extending benefit of carry forward of losses on change of shareholding of startups from seven to ten years, along with an enabling regulatory framework introduced by developments in GIFT IFSC will further provide employment and entrepreneurial opportunities within the tourism industry, and provide an impetus to budding entrepreneurs in the space. With the commencement of India’s Amrit Kaal, the future of India’s startup ecosystem appears bright, and the travel and tourism industry is all set to play a major role in the economy’s development.

Dr. Deepak Birewar, Chairman and MD, Inventys Research Company

The Budget 2023 announcement brings forth a bright opportunity for the innovative minds in India. The government’s initiative to promote pharmaceutical innovation in the country by leveraging centres of excellence is encouraging, and will provide impetus for public-private partnerships to emerge and deliver high-quality products for India and the world. We applaud the government’s efforts to promote education, medical research, and are enthralled by its decision to increase the capital investment outlay for a consecutive third year, which is guaranteed to attract private investments, helping the pharmaceutical and ancillary industries achieve true growth.

Sandesh Sarang, Revenue Director- India, Nepal, Bangladesh & Sri Lanka, Infobip

The roll-out of 5G services in October 2022 was a major disruption in the telecom sector, essentially since it opened the doorway to internet connectivity and dependent industries to register enormous growth. However, the service has so far remained limited to select regions in the country, which deterred it from fulfilling its purpose of accelerating digital growth. We are happy that the government has taken cognizance of this issue in today’s Union Budget by announcing 100 dedicated labs to effectively develop 5G services in India. This move will expand the reach of the 5G network from an existing 50 cities to even the remotest corners of the country, which is a welcome step towards propelling the government’s vision of creating a ‘Digital India’.

Sunil Gupta, MD, and CEO, Avis India

The significant boost provided to the travel and tourism industry in this year’s Union Budget is cause for inspiration, and the initiatives introduced by the government to enable infrastructural support, better connectivity, ease of doing business, and promotion of tourist activities will further augment growth of the country’s economy. The enthralling developments in the income tax regime will enable the growth of domestic and international tourism in India, and the ‘Dekho Apna Desh,’ along with the ‘Swadesh Darshan Scheme’ will promote a vibrant culture for tourism in the country.

Suresh Rajagopalan, CEO, Wibmo- A PayU company

The remarkable growth of digital payments highlighted in today’s budget announcement reflects the immense potential contained within India’s digital economy. We at Wibmo welcome the proposal for introducing amendments to improve banking governance in the country. Also, the initiative to promote financial literacy in India is a necessary step towards making India a fully digital economy. There is ample scope for the development of a proper regulatory framework for supporting and growing India’s digital banking ecosystem, with emphasis on reducing payment frauds and ensuring secure digital payments. This will facilitate wider adoption of digital payments in the coming future.”

Also Read: Union Budget 2023-24: FM Nirmala Sitharaman Presents Amrit Kaal Budget- Highlights