Union Budget 2023: Here are Industry Expectations

With the Union Budget 2023 fast approaching, all eyes are on Finance Minister Nirmala Sitharaman to see what the finance ministry has in store to help set the Indian economy struck by the Covid pandemic back on track. Union Finance Minister will present the Union Budget 2023 on February 1, Wednesday at 11 AM.

The union budget 2023, is divided in to two parts: the Annual Financial Statement and the Demand for Grants. The annual Financial Statement gives an overview of the government’s revenue and expenditure for the upcoming fiscal year. The Demand for Grants is presented in the form of a vote-on-account. This is a provision that allows the government to withdraw money from the Consolidated Fund of India to meet its expenses until the passing of the Appropriation Bill. It includes a mid-year review that is presented in the form of half-yearly reports to give an update on the government’s financial performance. Also, it includes Economic Survey and Finance Bill.

The government has been working to encourage the growth of new businesses in the country. So it's no surprise that every sector has high hopes for this year's budget. Every year, the budget offers some relief and benefits to various sectors.

The following are the expectations of various industry players for the upcoming Budget 2023

Expectations of Startup Industry

Sekar Udayamurthy, CEO and Co founder, Jidoka Technologies, shares his expectations from the Union Budget 2023 Quote: For India which is set to achieve its US$ 5 trillion GDP goal by 2024-25, it is important for the government to encourage IT-enabled manufacturing for efficient production and in high-quality throughput.  Government should incentivize manufacturing companies to use automation to achieve world-class manufacturing, similar to the PLI scheme.  Subsidies for tech adoption, loans, and access to funding especially for smart warehousing, shopfloor automation, and visual inspection processes are key.  To drive the ‘make-in-India’ initiative faster, there should be a reduction in import duties for raw materials such as steel, and cameras and lenses that are not manufactured in India. Investments in AI, ML, and IoT technologies should increase along with a focus on skill-development programs while incentivizing organizations that deliver regular training and upskilling to employees.  The emphasis should be on establishing a strong talent pool with these new-age digital skill sets that enhances productivity and operational excellence. Globally India has the third highest number of startups after the US and China and for the startup ecosystem to thrive Government should further incentivize employment through the standardization of ESOP treatment.

Expectations of Technology Industry

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.

Expectations of Edtech Industry

Alex George, Chairman and Managing Director at ITLH, "The govt has been showing us that it will have a focus area around Globalisation of education, with a plan of expanding higher education territories like iits abroad and by inviting internationally acclaimed campuses in India, we can expect the govt to allocate provisions to help the Education sector for territorial expansion. We expect the government to encourage online learning especially skilled based learning which can help create a major impact to Employability. Focus area to encourage skill based learning across tier 2 , tier 3 cities will be high. GOVT has encouraged digital opportunity and wfh as well as new end technologies are the future, we will see emphasis on technology based learning on AI, blockchain, ar/vr, uiux and iot. Emphasis on think tanks, and practical based labs for schools & colleges will also be seen.  Atal Tinkering Labs is one such initiative for the k12 segment."

Expectations of EV Industry

Akash Gupta, CEO & Co-founder, Zypp Electric “While 2022 served as the year when the EV transition became a reality for our country, 2023 will be remembered as the turning point for the EV sector. In the previous year’s budget, the GST was reduced from 18% to 5% on EV purchases and rents, which aided acquisitions. This time, the same decrease should apply to services as well. The EVaaS industry is avidly anticipating this move on the GST front with reference to the GST rate being reduced to 5% for EV-led services like last-mile deliveries, battery swapping, etc. Even though the EV market is currently expanding quickly, there are concerns about cutting off subsidies, which would severely restrict the sector's growth. In order to promote the use of electric vehicles, I believe it would be smart to extend the incentives for at least another year. Additionally, I think that Indian EV enterprises are searching for larger funding sources, but the nation's economy still lacks significant VCs who are well informed about the EV industry. As a result, it is expected that the government would allocate a certain amount of money for EV startups in this year's budget.”

Expectations of Healthcare Industry

Rahul Misra, Founder Vesta Elder Care Speaking about the Government's initiative “The Ayushman Bharat Digital Mission” Rahul Misra said:" In a country where 70% of the citizens do not have access to a single doctor and only 17% of people have insurance coverage, the government has taken a step forward to ensure the availability of quality medical services for all. Under the National Digital Health Mission, patients can opt-in to create a Health ID allowing them to share their medical records with healthcare providers including doctor’s appointments, diagnosis of an ailment, line of treatment, hospitalization for any treatment, and drugs taken to provide high-quality healthcare for all is commendable.” “The major challenge India is about to face is providing healthcare services to the ageing population in near future. By the year 2050, it is expected that the number of elderly in the country will reach 324 million. We are now an ageing country, and the factors responsible for this include decreasing fertility and mortality rates as an outcome of better healthcare services."

Expectations of Retail Industry

Shammi Agarwal, Director, Pansari Group Speaking on the upcoming 2023–2024 union budget, He stated, "The fast-moving consumer goods (FMCG) sector in India has quite a few expectations.  The FMCG sector, currently the fourth-largest in the Indian economy, is expected to increase to $220 billion by 2025. It would be beneficial for the economy and business if we receive more funding allocations and tax incentives from the Indian government, especially since the FMCG category is currently on the road to recovery and saw a 7% increase in FMCG sales last year. We also anticipate that the government may reduce the cost of packaging supplies, given the packaging contributes roughly 10% of the price of the goods inside. In the meanwhile, I would also urge the government to take action by establishing guidelines and standards for food hygiene and safety in the upcoming budget. Additionally, given that the United Nations has declared 2023 as the "International Year of the Millet," we expect additional benefits from the government for the export of millet-based goods. We know that export markets are always volatile and the scenario keeps changing due to dollar rates and government policies. In the Union Budget 2023, we hope that the steps taken will ensure that businesses won't be adversely affected by rapid changes and may conduct their workflow without inconvenience."

Expectations of Cybersecurity Industry

Ripu Bajwa, Director and General Manager, Data Protection Solutions, Dell Technologies India, “With cyber threats becoming increasingly sophisticated, businesses, people and communities at large are highly exposed to malicious attacks. Ransomware and data theft have been a persistent issue through the years globally as well as in India. Dell Technologies 2022 Global Breakthrough Report brought to light some concerning facts — 74% Indian business saw loss of mission critical data due to a cybersecurity incident and almost 40% of the workforce admitted to not having improved their data management knowledge after a serious attack — underlining that cybersecurity cannot be an afterthought anymore.

Data Privacy Day serves as a reminder to us all to treat our critical data with gravity. Organizations need to shift their focus to a more proactive security strategy, catering to data needs at the perimeter and also securing the supply chain. The realization is sinking in that the time to #FortifyYourSecurity is now. In the coming years, a Zero Trust mindset will define modern data security protocols further helping us shape data privacy values. The need of the hour is to develop a more holistic approach towards developing robust cyber security and data protection strategies. Even the smallest of efforts like choosing a VPN, conducting a password audit and investing in the correct infrastructure solutions, will go a long way in protecting crucial data. Afterall, Data Privacy is not about complicated measures, it's about efficiency”

Expectations of Fintech Industry

Eklavya Gupta Co- founder and CO-CEO at Recur Club stated that, In light of the upcoming Union Budget for 2023–24, India is eagerly looking forward to the policy announcements and allocations designed to support startup ventures and the entrepreneurship sector in the country. With the ongoing funding winter, it is especially crucial for organisations to receive comprehensive support from the government in streamlining and easing funding avenues and increasing accessibility for all. To reinvent the technology-based underwriting experiences and infrastructure and shorten the time to funding underprivileged MSMEs, Indian fintechs would require more collaborative partnerships with banks and NBFCs, similar to consumer fintechs. When dealing with such requests, regulatory authorities must design policies and initiatives for fintechs with a nuanced understanding of their position as regulated organizations, in order to fully appreciate their potential.

Expectations of AVGC Sector

Aditya Singhal, Director, and Executive Producer at Charuvi Design Labs, stated that, “Highlighting the huge potential of the AVGC sector, Hon’ble Prime Minister Narendra Modi expressed his desire to make India a hub for game developers and gaming services. In the last year’s annual budget, the finance minister also announced a push for the animation, visual effects, gaming, and comics (AVGC) sector with the setting up of an AVGC promotion task force. Recently the Task Force submitted a detailed report to the Ministry of Information and Broadcasting and recommended launching a ‘Create in India’ campaign with an exclusive focus on content creation, In India, For India & For World. The global AVGC industry amounts to $800 billion, and the Indian AVGC sector is witnessing jet-speed growth with the potential to bag up to 5 percent of the global share by 2025. Union Budget 2023-24 can infuse new energy into India’s prestigious dream of ‘Create in India’ and help India achieve the global market leader crown in the AVGC segment. We expect the budget to set new success milestones for the industry with exceptional tax reforms, infrastructure creation, and fund allotment. Like other governments, funds or tax benefits for the AVGC sector for projects that are in the interest of the broad public, such as edutainment, promoting Indian culture, Indian history, and so forth can help in promoting ‘Brand India’ on the global stage. Establishing FTAs or relationships with certain countries such as Canada, Australia, US, UK, Japan, etc can facilitate global innovation and act as a growth engine for India’s promising AVGC sector. To meet global standards in the Animation segment certain efforts in the direction of supporting the Indian Art ecosystem are required as it is heavily linked to fine arts and performance arts. We implore the government to add funds for Indian arts institutes to have a dedicated Animation department. This will not only create huge opportunities for creative people to become torchbearers of India’s AVGC revolution but will also generate more employment.”