Finance Minister Nirmala Sitharaman delivered Budget 2023 on Wednesday and announced revisions to certain levies and taxes, resulting in some things being cheaper and others becoming more expensive.
Sitharaman presented her fifth full budget since taking over as finance minister in July 2019. The Budget Session of Parliament began on Tuesday and will end on February 13th. The Parliament will reconvene on March 12 for the second half of the Budget Session, which will end on April 6.
According to Finance Minister Nirmala Sitharaman, India will lose Rs. 35,000 crore in net tax collection after the Union Budget modified direct and indirect taxes to provide relief to the middle-income group.
“Revenue of about Rs. 38,000 crore – Rs. 37,000 crore in direct taxes and Rs. 1,000 crore in indirect taxes – will be forgone while revenue of about Rs. 3,000 crore will be additionally mobilized. Thus, the total revenue forgone is about Rs. 35,000 crore annually,” Sitharaman said while announcing the Union Budget for the next fiscal year that starts April 1.”
The new credit guarantee scheme is intended to reduce lending costs by 1% and provide MSMEs with an additional Rs 2 trillion in collateral-free loan guarantees. The MSME sector employs almost 110 million people and accounts for 30% of GDP.
Other measures to help MSMEs were announced in the Budget, including the extension of ECLGS until March 31, 2023, additional credit of Rs 2 trillion for Micro and Small Enterprises to be facilitated through CGTMSE, and the rollout of a Raising and Accelerating MSME Performance (RAMP) programme with a Rs 6,000 crore outlay.
Lalit Kumar, Partner, JSA, stated that, “Financial Sector is amongst the seven priority sectors in Budget 2023. Year after year the Government has given impetus to the financial sector; and continuing with that commitment, big announcements are made in this year’s budget as well. Financial inclusion is again the focus this year. Big boost to MSME’s with credit guarantee revamp scheme from April 1, 2023, with the allocation of Rs. 9000 crores. Resulting in the cost of the credit to reduce by 1%, a big relief in the current inflationary conditions.
Another key update is ‘Public Consultation’, for all financial sector regulations. need of the hour with various divergent regulations of several different regulators. This will ensure ease of compliance and business.
Derivative instruments will now become valid. Currently, under the Securities Contract Regulation Act, a contract in the derivative is a void contract. A big relief for mergers and acquisition transactions going forward. More powers to SEBI to award degrees, diplomas for courses in securities market law.”
Rajsri Rengan, Head of Banking and Payments, India and Philippines, FIS, mentioned, “The achievement of Rs 126 lakh crores of digital payments through UPI in 2022 from Rs 7400 crores is a big milestone for India. Initiatives including extension of Bharat Bill Payments System for NRIs, approval of Rs 2,600 crores incentive scheme for FY24 for RuPay debit card and UPI transactions, and growing digital payment acceptance with digital infrastructure have given a big boost to digital payments via UPI in India as well as global level. Additionally, the government is aiming to set up 100 labs for developing 5G apps. 5G technology in financial sector will ensure faster and efficient digital transactions.”
Parry Singh, Founder and CEO, Red Fort Capital, says, “The finance minister has focused on growth and digitalization, which is the need of the hour. Capital Investment outlay has been increased by 33% to Rs 10 lakh crore, which would have a multiplier effect on the economy. The government has continued its support to MSMEs by announcing 9000 crores for the MSME credit scheme and returning 95% of the forfeited amount for contract failure during Covid-19. Furthermore, the enhancement in DigiLocker will increase the efficiency and reduce TAT for financial institutions and FinTech.”
Hardik Shah, Founder & CEO, Kinara Capital, says “Absolutely positive and energized with today’s Budget announcement. FM Nirmala Sitharaman has delivered on all counts and added more light to India – already named as a Bright Star in today’s world economy.”
“We applaud Union Budget 2023 extending the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) Scheme with an infusion of Rs. 9,000 crores, which will facilitate additional credit access of Rs. 2 lakh crores for MSMEs. This will bring stability to the scheme and promote financial inclusion and employment growth in the sector. The announcement of 1% reduction in cost of credit bodes well for last-mile lenders who extend financing to the underserved MSME sector. This is a positive move for the future of the scheme; however, the industry ask of scrapping the 18% interest rate cap on the scheme has not been clarified in this Budget. This is required as it will further deployment to the micro-MSMEs and improve last-mile utilization of the funds allocated under the scheme. We hope this is implemented when the new CGTMSE goes live on April 1, 2023.”
“The acknowledgment of PAN as a common business identifier as well for all digital systems is a laudable initiative as it will help in integrating financial information under one single entity. It will significantly reduce the compliance burden on small businesses that do not have the resources to maintain a large team who can maintain multiple numbers and filings. The plan to create an entity Digi locker which is a secure mobile-friendly free service with the ability to store and share documents online securely to regulators, banks and other business entities as well as the move to set up a National Financial Information Registry will remove the dependence on paper trail and fasten timely access to credit.”
Aiswarya Ravi, CFO, Kinara Capital, stated “We are galvanized by FM Nirmala Sitharaman’s move in today’s Union Budget 2023 urging financial regulators to conduct a comprehensive review of existing regulations, and incorporate feedback from the public and regulated entities. As Digital Lending picks up and NBFCs are increasingly offering niche products and services to the underserved credit segments and driving financial inclusion at scale. NBFCs are expected to see their AUM grow up to 12% in FY23 so it is important to differentiate the regulations between banks and smaller NBFCs and MFIs. For example, NBFCs require a differential approach to NPA recognition based on the end borrower segment in focus.”
“MSME supply chain will improve due to availability of deduction on income tax on payment basis to MSMEs and not on an accrual basis. Estimate of delayed payments due to MSMEs is upwards of Rs 10 lakh crores, so this move in today’s Union Budget 2023 will spur timely payments to MSMEs and improve overall business health and competitiveness in the economy.”
Ashwani Rawat, Co Founder & Director, Transerve Technologies, says “The Budget presented by FM Nirmala Sitharaman builds on the excellent Budget last year, continuing the trend towards more productive expenditure. Like the rest of India, we welcome Budget 2023 with open arms. The Union budget has correctly highlighted the imperative for greater emphasis on innovation, research, and development, which are crucial to helping India reach the aspirational goal of becoming a $5 trillion economy. Focusing on the amplification of emerging technologies can help create a world-class technology ecosystem.
Budget 2023 provided wings to India’s Growth story by focusing on investment, increased expenditure, employment, ease of doing business.& rebate in income tax limit to 7 lakh in new tax regime.
The Budget is consistent with our PM Narendra Modi’s vision of making India Atmanirbhar: a digital superpower, a sustainability leader and a healthy nation. This statement of intent is clearly supported by a plan for the future, and backed by allocations — specifically in the areas of infrastructure, digital transition, planet resilience, education and health — to support Indian ambitions.
Shweta Gupta, Founder & CEO, MUDS Management, says “The Union Budget 2023 has undertaken a series of steps to strengthen the fundamental pillars of the economy. It is heartening that the financial sector has been given emphasis under the seven key pillars. The infusion of Rs 9000 crores to MSME and granting of forfeited amount against contract failure during COVID-19 will give a significant push to the sector. Path Breaking measures such as the PAN card as the sole business identifier across digital platforms and setting up of integrated IT portal for reclaiming unclaimed shares and dividends will go a long way in boosting ease of doing business and easing regulatory compliance.”
Anand Rathi, Founder & Chairman, Anand Rathi, says “A 33% increase in capital expenditure to 10 lac crore rupees, the highest ever will go a long way in building roads, ports, and airports — crucial for making India a reliable investment destination. Investment of Rs. 2.4 lac crore in Railways is commendable. Boost to capex before the national polls is an indication Modi is focused on realizing his dream of making India a factory for the world.”
“The gross borrowing estimate of 15.43 trillion rupees for next year is lower than the survey estimates of 15.77 trillion rupees. Hopefully, that should cheer the bond markets. Net borrowing at 12.3 trillion rupees, however, is higher than the estimate. Need to see how much of that could be raised via green bonds.
India’s maiden sovereign green bond issuance last month fetched a better-than-expected yield and the next tranche is planned for Feb. 9.
FM has reduced the Fiscal Deficit target to 5.9% for 23/24, which is a welcome move and should help in maintaining the interest rate lower.”
Mandeep Arora, MD & co-founder, UBON said, “The 1st budget of Amrit Kaal by honorable Finance Minister Nirmala Sitharaman is well divisional. Starting from skilling for youth, job creation, senior citizens, and digitalization to MSMEs this budget is unturned every stone. Envisioned as modinomics, the budget came with high hopes.
For the manufacturing and electronics industry, this will be a big relief, as customs duty on many electronics parts imports has been reduced. This means mobiles and consumer electronics will be low cost from now. This will help in value creation, employment generation, and better productivity and provide affordable electronics for Indian consumers. Emphasizing on skill development and value-based knowledge through digital platforms for free is another step to support youth.
MSMEs are mentioned as growth engines of the country and I appreciate equal attention of the government on failed businesses also. This will help the sector grow with the back support of the government. A 1% reduction in the cost of the MSME credit guarantee will help the industry to grow as well. The infrastructural development has given a major part of the budget, we expect that the government will allocate some funds for the development of more industrial areas and upgrading their infrastructure for MSME.
However, Industry is a bit disappointed as Industry was expecting announcements related to Incentives for domestic design, Expanding the PLI scheme, and Strengthening the supply chain which was the need of the hour. We hope the government will consider our request in the next budget and support the industry in becoming a global manufacturing hub and achieving the Atmanirbhar Bharat dream.”
Ankit Alok Bagaria, Co-Founder, Loopworm, says “Ankit Alok Bagaria, termed the Union Budget 2023-24 “short and crisp” saying that the budget would help farmers, established businesses, and Startups in the Agri & Allied Agriculture space.
“The 6000 Cr infusion to promote fisheries would help Shrimp farming the most. Decreasing import duties on feed ingredients are going to help the feed manufacturers and help formalise animal agriculture but would lead to reduced margins for domestic feed ingredient manufacturers. For young startups, the agri accelerator fund is a good initiative but there was less focus to promote Agri-Startups at the growth stage. Funds to support Bio-based products to promote natural farming should boost the plant Bio-stimulant & Bio-fertiliser industry,” stated Bagaria, while welcoming the budget.
“Significant agricultural credit support and significant fund infusion in allied agri sectors should promote existing farmers and people looking for secondary income streams to set up livestock/ poultry/ fish/ insect farms which would lead to a growth in non-arable land agriculture,” Co-Founder of Loopworm added.”
Abheek Barua, Chief Economist, HDFC Bank, says “The budget recognised that it would have to continue playing the lead role in driving investments in the economy given the rising global risks and only a nascent recovery in the private capex cycle. The capital outlay for 2023-24 was raised to INR 10 lakh cr, a rise of 33% year on year.
The budget also pays heed to the need for fiscal consolidation reducing its fiscal deficit target to 5.9% of GDP in 2023-24 from 6.4% in 2022-23. The resultant lower than expected market borrowing number is likely to bring some relief for the bond market. We see the 10-year bond yield to moderate towards 7-7.1% in FY24.
The budget also announced adjustments in income tax slabs that is likely to boost consumption and savings in the economy, benefitting taxpayers particularly at the lower brackets of the income pyramid.”
Ajay Chaurasia – Vice President, Business, Product and Marketing at RupeeRedee, says “Revamping credit guarantee scheme for MSMEs with an infusion of Rs. 9000 Cr. into the corpus will prove to be highly influential in boosting digital lending across segments. Furthermore, KYC and PAN to be used as a Risk based approach are a good step towards ensuring financial security. With the increase in digital transactions and connected banking, this would assist in boosting the flow of customers and lower the cost of onboarding.”
Tapan Barman, CEO & Co-Founder, Mihup, says, “It is encouraging to see the government identifying AI as a key technology of focus in this budget. As an organization working in this space, Mihup welcomes the emphasis on Make AI in India, and Make AI work for India frameworks.
We have always maintained that AI integration holds the key to transforming service levels and outcomes. The decision to set up 3 Centers of Excellence for AI research, and development in collaboration with private sector players is bound to expedite AI adoption in areas like healthcare, sustainable cities, urban management, and sustainability initiatives. We will not only see home-grown technologies make greater impact on all aspects of life, but also create a lot of jobs. The decision to set up AI-specific training centers is going to help a larger number of youths in acquiring future-ready job skills and enable AI-based companies like Mihup to acquire better talent with greater ease.
Alongside the announcements towards ease of doing business such as reduction of 39,000 compliances and de-criminalization of over 3400 legal provisions, the government has also taken several startup friendly steps. This includes simplification of direct taxes and collaborative approach to AI development. All these will surely play a key role in India’s technological development and overall economic growth.”
S Krishnan, MD and CEO, Tamilnad Mercantile Bank, says “India as an agrarian economy needed a push in the agri credit space. Increasing the agricultural credit target by Rs 20 lakh crore in Union Budget will provide much-needed support to the agriculture and ancillary sector. The sector is growing at an average annual growth rate of 4.6 per cent over the last six years and is also the biggest employer in the Indian economy.
The increased availability of credit along with the launch of the Agriculture Accelerator Fund will ensure better farm productivity along with better quality inputs through innovative solutions and modern technologies to transform traditional agricultural practices.
The retail, agriculture and MSME (RAM) segments of TMB is around 89 per cent of the total loan portfolio, and we continue to focus on the sector.”
Aditya Sesh, Founder and Managing Director of Basiz Fund Service Private Limited, stated “The fund manager is the regulated entity now. For a long time, the issue of single window applications in GIFT IFSC be it the SEZ or IFSCA, or others has been in discussion. This has now been enabled with powers of SEZ being delegated to the IFSCA. The GSTN registration functions will also be delegated to IFSCA. This will vastly improve the ease of doing business and avoid dual regulation.The announcements concerning GIFT City have been carefully considered. The EXIM Banks subsidiary will be set up, since this is outside the FEMA zone,import and export financing and lines of credit will become much easier.Also, acquisition financing through GIFT City units will now be enhanced because ECB deals done abroad will now be structured in GIFT city and financed from here. An announcement has been made to recognize offshore derivatives in GIFT however, we await the details for the full text of the scheme.The Budget has introduced the concept of a Data Embassy which is unique to India. This will act as a data backup. Such data embassies will not be subject to the Data Export Laws of India. In a way, this will move GIFT IFSC to be a pure service centre for service that will not relate to India and GIFT IFSC will end up being India’s defacto commercial capital for International financial services and transactions.”
Girish Kousgi, MD & CEO, PNB Housing Finance, indicated, “As our nation marches towards Amrit Kaal, the intended infusion of Rs.79,000 crores towards affordable housing is a positive move. Its’s a win-win situation fortifying our nations rural infrastructure and adding power to lower and middle income groups. The wheels are set in motion towards an inclusive and sustainable economic growth and this 66% increased commitment will bolster higher rural participation”.
Arvind Agarwal, Co-founder & CEO, C4D Partners: “Before anything else, kudos to the finance minister and her team. What a great budget!
As an impact investor, Budget 2023 has me excited to watch the industry’s growth with tremendous support coming in from the government, including the initiatives, policies, and funds that the budget has proposed for green and sustainable businesses across sectors. The emphasis on “Green Growth”, and a high focus on MSMEs – which have been rightly referred to as the growth engines of the economy, and impact-heavy sectors, like agriculture, manufacturing, clean energy, healthcare, skilling and education, and waste management, are sure to drive positive traction for the impact industry.
Furthermore, a notable initiative was presented for bridging the gender gap in entrepreneurship, with a focus on the vast and underserved rural market. The Rural Livelihood Mission, crafted for empowering rural women through 8.1 million self-help groups is a tremendous effort by the government to foster the upliftment of women entrepreneurs in the country. The sourcing, branding, and marketing support will help women-owned/led businesses to scale their operations to larger markets.
It was good to note that the government is focused on inclusive development, and sustainable growth, and seeks to actively work toward Sustainable Development Goals. I am sure this will offer a much-required impetus to businesses and investors alike to steer their efforts and money toward building a better future for people and the planet.”
Vineet Sukumar, Managing Director and Founder, Vivriti Capital, says “The Union Budget proposals are progressive as they continued the themes of large infrastructure outlays, relief for MSMEs, and fiscal consolidation from previous years and retained the focus on reviving selected sectors. The push for transport and urban infrastructure, railways, and power is expected to benefit banks and NBFCs as the capex cycle will revive boosting capital deployment. The relief to MSMEs by way of revamping the credit guarantee scheme and the push towards electric vehicles are expected to boost the overall health and credit qualities of such ecosystems.
The downward bias in fiscal deficit projection from 6.4% in FY23 eventually to sub 4.5% by FY26 is expected to protect headline yields at current levels. While interest rates for high-rated issuers would be aligned to benchmarks the same for the performing credits space could remain at current levels as movements in benchmark rates may negate the crowding out effect in the private sector to a large extent.”
Akash Sinha, Co-founder & CEO, Cashfree Payments, stated “The Finance Minister has presented a distinctive set of measures in the Union Budget 2023-24 with a streamlined focus on rapid, holistic and inclusive economic growth. It is a well-crafted statement of intent, drawn from the success and learnings from the past with the potential to further enhance India’s growth prospects.
Realising the crucial potential of digital infrastructure in the financial sector, the hon’ble FM has announced measures to increase the scope of DigiLocker services for individuals and MSMEs. This will certainly aid in enhancing the accessibility of financial services with higher convenience and simplified processes with robust security.
It is also encouraging to see that the hon’ble FM has given due attention to compliance in the financial sector. A simplified KYC process, adopting a ‘risk-based’ approach as opposed to a ‘one size fits all’ outlook will ensure accurate and sophisticated verification as well as in turn regulated operations in the financial services space. Highlighting the growth of digital payments and fiscal support for digital public infrastructure is also appreciable, as this further contributes to India’s digitisation efforts.”
Shalin Gandhi, Managing Director, SUBMARINE PENS, said, “This year’s budget is a brickwork laid out for growth with the MSMEs breathing great relief as the credit guarantee scheme is revamped by 9000 crores. MSMEs to receive 2 lakh crore in collateral free finance. The government has also extended a tax holiday for startups till March 2024. The budget has also introduced several incentives for importing parts by relaxing duties, mainly supporting manufacturers in the IT, Pharma and Renewable Energy sectors”.
Peeyoosh Pandey, Chief Executive Officer, Hoonartek, says “We congratulate Hon’ble Finance Minister on emphasizing technology-led growth for the third successive year. This transformation will lead to greater use of technology solutions, elevating India’s economic efficiency. The Data Governance policy draft is a welcome step; unlocking data for India’s growth will be crucial. With our expertise in the data domain, we are optimistic about staying ahead of market trends and customer needs in this segment. We have been an integral part of the lending ecosystem; simplifying the KYC process will further fuel the coverage. Our approach of accelerating telecom as one of our core sectors aligns with the government’s call to enhance 5G services further. Our credibility in data integration at scale provides us with a natural head-start in advancing our proposition for this fast-growing ecosystem.”
Shanti Ekambaram, Whole Time Director, Kotak Mahindra Bank, stated “The finance minister has delivered a positive and growth oriented budget with twin boosters of higher capex outlay and moderation of personal income tax at the lowest and highest level, thus boosting growth and consumption while keeping the fiscal deficit and market borrowing in line with market expectations of 5.9% and Rs 15.43 lakh crs. There were no substantive negative surprises.
The Budget was focused on all aspects that can help India grow including Agriculture, infrastructure capital outlay, Green Energy, Tourism, Youth skilling while also providing for the economically weaker sections. A key focus was on improving the ease of doing business, continuing digital thrust, promoting entrepreneurship, simplifying regulations and compliance, and indicating a glide path to fiscal consolidation – which collectively will unleash the potential of India to grow into an economic superpower in the next decade.”
Manish Kothari, President and Head –Commercial Banking, Kotak Mahindra Bank Ltd, says “All-rounder budget from the FM – prudent and growth-oriented – with practically all segments receiving a positive touch! FM has managed to focus strongly on capex/investment and spur domestic consumption and still managed to bring down fiscal deficit to 5.9%. And all of this without bunging in any unreal numbers across govt. borrowings and govt. expenses/subsidies OR on tax revenues, divestment target, etc. I believe this budget is likely to create a multiplier impact on the economy. Specific focus on the Infrastructure sector through a massive outlay of INR 10L crore will have a positive impact across segments. Significant measures taken towards “ease of doing business”, including sweeping reforms through the National Data Governance Policy & skilling of our Youth, will aid businesses (across Micro, Small, Medium or Large) in improving their cost-competitiveness. Rural incomes will see a boost with the support provided through technology, value-added crop cultivation & increase in credit to agriculture & allied activities. Large-scale inclusion as well as efficiencies will come from digital initiatives announced across the board. And, job creation through all these measures, aided by reduction in personal tax will strongly aid domestic consumption and create a positive cycle for investments.”
Mayank Goyal, CEO & Founder, moneyHOP, says “There have been some welcome moves announced to ensure ease of business for startups and MSMEs and the extension of the DigiLocker scheme can prove to be influential to boost digitalisation of business operations. Announcement around the National Data Governance Policy is a constructive step towards unlocking potential of new-age businesses by interpretation of data and allowing scale through targeted innovation. Growth of businesses is also bound to excel with the introduction of permitting acquisition financing by IFSC units of foreign banks, allowing FinTechs to propel by creating seamless customer experience avenues and deeper penetration. The New Tax Regime also has the potential of pumping back more disposable income to the end consumer which will be a welcome step to increase personal economic activities like consumption, tourism, lifestyle upgradation, etc creating growth avenues for many B2C new-age businesses. Lastly, the NFIR along with the Data Verification measures introduced in the budget should remove trepidation that still exists in Rural India for using Digital Payments and also across the country for digital forex payments.
Aditya Damani, Founder & CEO of Credit Fair, stated “In the Budget FY24, the MSME sector got an enhanced lifeline by the infusion of Rs 9,000 crore to the credit guarantee corpus. It will enable additional collateral-free guaranteed credit of Rs 2 lakh crore, which is a big relief to the credit-starved sector. Further, the cost of credit will also be reduced by about 1%. Thus, largely, the MSMEs have received a favourable treatment in the budget. More direct tax benefits like Rs 3-crore enhanced turnover limit to such units to avail presumptive taxation benefits are also offered to the micro-enterprises. For the NBFCs, the Centre’s decision to constitute the National Financial Information Registry and the continued fiscal support for the digital public infrastructure will be of great benefit. Moreover, the Centre’s focus on Green Mobility, by announcing Rs. 35,000cr towards energy transition and more clarity in the Vehicle Scrapping Policy will offer a fillip to automobile finance business. Further, the government’s push for the speedy transmission to the electric mobility solutions and higher allocation for green hydrogen production, and duty relief to domestic manufacturing of lithium ion batteries will accelerate EV finance segment.”
Murali Ramakrishnan, MD and CEO, South Indian Bank, says “This year’s Union Budget is noteworthy on a number of counts. Effective implementation of schemes like opening of 47.8 crore PM Jan Dhan bank accounts will benefit common citizens. With the establishment of the Urban Infrastructure Development Fund (UIDF), we expect infrastructure in tier 2 and tier 3 cities receiving a significant boost. The enabling of the Digital locker for MSMEs for securely storing and sharing documents online with various authorities, regulators and other entities will encourage seamless business.”
PN Vasudevan – MD & CEO , Equitas Small Finance Bank, says “The Budget presented by the Hon’ble Finance Minister today has many positives. It is a growth-oriented budget with a planned capital outlay of ₹ 10 Lakh Crore and a higher allocation for the PM Awaz Yojna Scheme which would spur the housing finance market and all its upstream and downstream industries.
The Budget also has very positive news for individual taxpayers. The people at the lower end of the income bracket benefit from an increase in the minimum tax slab from ₹ 2.5 to ₹ 3 Lakhs along with all the other benefits available under the old scheme, while for people willing to shift to the new tax regime, the minimum taxable limit has been increased from ₹ 5 to ₹ 7 Lakhs. This may spur more people to opt for the new tax regime. And at the top end of the income earners (new tax regime), the tax limit has been reduced from the current 42.7 % to 39%. Both of these should result in higher level of disposable income and higher consumption.
While apparently being liberal with various segments as above, the Government has also done an extraordinary job of maintaining the fiscal prudence, riding on strong tax collection. The revised estimate of borrowings for the current financial year has been reduced while for the next year, the borrowings estimated at ₹ 15.43 Lakh Crore is lower than the widely expected ₹ 15.8 Lakh Crore. The fiscal deficit has also been contained during the current year within the guided 6.4%, while for next year it is pegged at 5.9%, clearly showing that the Government has very well managed the tightrope walk between fiscal prudence and supporting economic growth.”
Sudarshan Lodha, Cofounder & CEO, Strata, “The overall tax slab restructuring has simplified the new tax regime while leaving an increased average individual purchasing power in the hands of the consumers. With an enhanced focus on boosting private investment, this is a welcoming move expected to increase capital investment across sectors. Reducing the highest tax slab to 39% will channelise increased investments in the high-value asset classes, including infrastructural avenues.
Furthermore, the budget also focussed on inclusive development with a special emphasis on boosting manufacturing. Additionally, a massive infusion of INR 10 lakh crore for infrastructural development will boost last-mile connectivity by strengthening inland transport and supporting infrastructure, complementing MSME manufacturing and generating increased employment.
It will certainly increase the commercial real estate market momentum, creating more demand for state-of-the-art manufacturing and warehousing facilities. Additionally, this will likely create a pumped-up demand for sophisticated office spaces beyond Tier I cities. Such measures also add to the development of new commercial hubs reducing the pressure from the metros and tier-I cities. This rise in demand, fuelled by the positive taxation relief, will increase the disposable income for average investors, thus improving their investible funds. This will have a robust impact on the spur in private investment and commercial real estate being one of the most promising investible avenues and will bolster India’s real estate industry by helping it inch towards its dream of becoming a $ 1 trillion market.”
Deepak Agrawal, CIO-Debt, Kotak Mahindra Asset Management Company, says “The Minister has been able to do a fine balancing of increasing capital expenditure by 33%, while at the same time reducing the fiscal deficit from 6.4% to 5.9%. This step will further contribute to make the Indian economy more resilient. Investment in Capital Expenditure would result in boosting productivity over medium term and help in bringing down inflation structurally. The budget 2023 nominal GDP growth rate and revenue growth estimates are credible.”
Wayne Ferrao, Chief Strategy Officer, Sirius Cleantech Private Ltd, says “We at Sirius Cleantech are delighted with the Green growth approach to the budget. It is encouraging to the EV industry that the government are implementing many programmes for green growth across various economic sectors. Batteries have been a major component that have been inflating the cost of EV’s and the reduction of customs duties on capital goods imported for the manufacture of Lithium-ion batteries is welcome. This is a great boost to the manufacture of batteries in the country and will boost the creation of the domestic EV ecosystem taking us towards self-reliance in this area.”
Ashish Singhal, CEO & Co-Founder at CoinSwitch, says “The Union Budget 2023 has unveiled several new policies and initiatives designed to foster growth through digital transformation. It’s great to see the financial sector as one of the seven priority sectors in the budget.*
While we are still reading the fine print, the thrust to improve financial literacy and to build DigiLocker as a one-stop KYC solution are positives for the Wealth Tech Ecosystem. Being an early adopter of DigiLocker, its use has greatly helped us at CoinSwitch to implement more user-friendly KYC standards.”
The government’s continued focus on financial inclusion, building digital infrastructure, entrepreneurship, and up-skilling our youth will have a great impact on the economy.”
Ashwin Chawwla, Founder & Managing Director, Escrowpay, says “The Government of India has proposed the use of Aadhaar-based Unique Identity Number (UID/UAN) as a common identifier for all digital systems of specified government agencies. This would enable the government to identify individuals across different agencies without having to maintain separate records for each agency. PAN will be the sole identifier and would help in stopping multiple submissions for MSMEs.
The UID/UAN will be used to securely store and access personal information of citizens, and to facilitate access to government services. Additionally, it will also enable the government to better track the usage of public services, improve public service delivery, and reduce fraud and corruption.”
Vikas Jain, CIO and Co-founder, Multipl, says “We are happy that the Union Budget has reduced the compliance burden by mandating that PAN be a common business identifier. Moves to empower SEBI to develop, regulate and enforce norms for education in the National Institute of securities markets will enhance financial inclusion in the country. The budget paves the way for more ease of doing business and will help drive the entrepreneurial spirit of the country. The Government’s resolve to keep fiscal deficit targets combined with RBI’s efforts to bring inflation within tolerable limits will reassure investors and consolidate India’s position as an attractive investment destination. The start-up tax exemption for another year will help the sector grow, especially in a challenging macro climate. Focus on simplified KYC, Digi locker for businesses and National Data Governance Policy will reduce the compliance burden and provide data for research this helping start-ups focus on building great products. The revised tax slabs will result in higher disposable income, helping in better savings and additional spending, a win-win for the economy.”
Anil Pinapala, CEO and Founder, Vivifi India Finance, “The Union Budget 2023 is a commendable approach towards India’s vision for inclusive growth. It has laid its due focus on building the blocks that will transform our nation into one of the strongest economies in the world. With financial inclusion at the core, the relief for taxpayers in terms of direct tax is an absolutely welcome move. The government is creating an incentive structure for people to move from the old tax regime to the new tax regime. This transformation will empower our citizens with a stronger economic stability and a higher standard of living.
The fact that the per capita income has doubled to Rs. 1.97 lakh since 2014, speaks highly of how we have significantly improved our position; as a well-governed and innovative country with a conducive environment for business as reflected in several global indices. Several accomplishments have had a major role to play in India’s rising global profile: unique world class digital public infrastructure, e.g., Aadhaar, Co-Win and UPI; Covid vaccination drive in unparalleled scale and speed; online KYC processes. Further, the budget expanding access to documents in digi-locker will help in fastening credit underwriting as well as overall KYC processes. Remote onboarding and underwriting will streamline and bring efficiency to the processes.
With the world moving towards a digital revolution, the Indian government has introduced reforms that will transform India into a digital super- power. As a nation, we are making progress in the right direction. Looking forward, initiatives for start-ups, technology, upskilling and financial literacy will undoubtedly act as a successful catalyst for India’s growth.”
Ajay Kanwal, MD and CEO, Jana Small Finance Bank, says “Budget has consistency, growth orientation and balance. We see positive spots which interests us – agriculture, affordable housing and MSMEs.
The rebate on personal tax will boost saving and consumption and super for us – the employees.”
Avinash Ramesh Godkhindi, Managing Director and CEO, Zaggle, says “The budget proposals aimed at fostering further development of FinTech services in India are indeed commendable. The nation’s digital public infrastructure, including Aadhaar, PM Jan Dhan Yojana, Video KYC, India Stack and UPI, has provided the foundation for FinTech services to thrive. By expanding the scope of documents available in DigiLocker for individuals, the government has taken a good step further towards enabling even more innovative solutions in the FinTech sector.
This move towards digitalization will streamline the process of acquiring necessary documentation for FinTech startups, reducing the time and effort spent on manual processes. This will also enable the FinTech sector to develop new technologies for better data analytics, besides enabling quicker turnaround times in processing data will go a long way in increasing the efficiency of the banking sector.
The Budget 2023-24’s proposals to extend the date of incorporation for income tax benefits and provide the benefit of carrying forward the losses for start-ups are important steps towards supporting entrepreneurship and promoting economic development in India. The extension of the period from 7 to 10 years will provide a huge room for start-ups to make larger investments and also provide time to recoup these investments and get back on a growth trajectory, which will be beneficial for the long-term success of start-ups.”
Ravi Kumar, Co-Founder & CEO, Upstox, says “We are thrilled to see this budget’s well-balanced and forward looking approach. From basic infrastructure to environment, from fintech to education and upskilling, the budget covers it all and accelerates efforts to achieve inclusive and sustainable development.
In line with the government’s vision to strengthen financial inclusion, the establishment of the National Financial Information Registry is a welcome move. PAN as a common identifier will simplify the KYC process and also enhance ease of doing business. For individuals, the increase in the income tax rebate from ₹ 5 lakh to ₹ 7 lakh under the new tax regime will leave more disposable income in the hands of individuals, and thus higher investment potential.
To encourage more retail investing and insurance adoption, we wish that the honourable FM would increase tax savings for investments and reconsider the proposal to discontinue the tax SOPs on mutual funds and insurance.
Initiatives for start-ups, technology, upskilling and financial literacy, will undoubtedly catalyse India’s growth. This is India’s moment on the global stage and our government is doing a fantastic job seizing this opportunity and realising our country’s potential.”
Ravi Kishore Goyal, VP Strategy, Propelld, says “The finance budget announced today by FM Nirmala Sithraman focused on unleashing the potential in developing sectors such as financial sector.
Finance Minister announced the expansion of the government digital certificate depository Digilocker services for the fintech sector. DigiLocker is an Indian digitization online service provided by the Ministry of Electronics and Information Technology under its Digital India initiative.
FM Nirmala Sitharaman has announced the expansion of the Government digital certificate depository Digilocker services for the fintech sector.
Documentation availability will be the focus for the DigitLocker expansion for the fintech sector and we can work with public sector banks to bring in more efficiency to work and reduce fraud and security risks
The fintech sector has been facilitated by digital services, PM Jan Dhan Yojana, Indian Stack and UPI. So we are very happy with this move and we are certain digilockers will be the key to more secure transactions.”
Vineet Rai, Founder and Chairman of Aavishkaar Group, This year’s Union Budget mainly focused on inclusive development, green growth, job creation, and capital layout. A capital layout of Rs 10 Lakh crore is a 33% increase over last year and a 300% increase from 2020 will drive more job creation. There have been a few other exciting announcements like the agriculture accelerator fund and significant support for MSMEs which will go a long way in the post-Covid scenario. There is a substantial focus on green growth and a clear mention of green credit which will enable sustainable growth. The Finance Minister announcing a capital investment of Rs 35,000 Crore for energy transition will help us prioritize and achieve our goal of net zero carbon emissions by 2070. Overall it is a good budget for both the country and for the Masses.
Sanjib Jha, CEO, Coverfox Group, says “New intriguing announcement have been made in the Union Budget 2023, in the insurance space, Life insurance policies (except ULIP) with aggregate premium of above 5L, issued after 1st April, 2023, shall be not be a part of any tax exemption scheme. The returns of these policies will be taxed as per an individuals’ tax slab expect in case of demise. This announcement is mainly for insurance policies which are purchased from the point of view of long-term savings, this may lead to an increase in the purchase of term insurance policies that are pure life insurance policies without the element of savings.”
Anup Nayar, CEO-Domestic, In solution Global Ltd, stated “With the Finance Minister announcing reduction of 39000 compliances and decriminalizing more than 3400 legal provisions, the budget proposes a series of measures to unlock the potential of our economy and promoting businesses. New age start-ups and unicorns should also feel empowered with the Jan Vishwas bill that will amend 42 central acts to support organizations. In addition, the formulation of the National Information Financial Registry will serve as centralized source of financial information, which will not only empower industry players, but enhance the payments infrastructure as well.”
Anuj Arora, Co Founder & COO, SahiBandhu, says “Under the Union Budget 2023, Finance Minster Smt. Nirmala Sitharaman mentioned rise in duties on gold, silver and diamond. If the market price of Gold increases, people wanting to avail loan against the Gold will get a higher loan amount for their gold sitting idle at home. We encourage Bharat citizens to make the most of this opportunity to get onto formal lending with SahiBandhu Gold Loan and further the Saptrishi goal of financial inclusion.”
Vishal Bhatia, CFO, Balancehero India, says “The Union Budget presented by FM today is an exhaustive, progressive and inclusive one. At Balancehero, we are committed to ensuring financial inclusion for all and are pleased to see the government’s increased allocation towards financial inclusion programs in the recent budget. We believe that this will further drive our mission to provide accessible and affordable financial services to all segments of the population.
Additionally, the reduced regulatory obligations and multiple KYC needs will give entities a much-needed breather. This will also encourage and ensure more people come under the umbrella of the formal financial system.
And the National Data Governance Policy will also offer access to anonymized data and help in a risk-based approach instead of a one size fits all approach that will better fit the needs of Digital India. The budget offers something for everyone and will pave the way for an India where financial inclusion is a reality for all citizens.”
Nishant Singh, Founder & CEO of BUSINESSNEXT, stated “The Union Budget is both, a visionary in terms of its structured approach towards sustainable growth while being uncompromising towards immediate economical requirements. The ‘Financial sector’ in the Saptarishi definitely underlines the due importance of the BFSI sector in line with the ‘Inclusive Development’ agenda. National Financial Information Registry, unified document repository, change of approach in KYC process are the bundle moves aimed at easing and facilitating an efficient flow of credit to foster financial stability and enable an anchored economic upswing. Unleashing the potential of AI, ML, and technology thrust via the establishment of COEs is the continuation of digital focus on the government from the preceding budgets. Overall, the directions will propel India towards the next stage of making it financially and digitally rich.”
Shailendra Singh, MD & CEO, BOB Financial Solutions Ltd, says “We welcome this all-encompassing Amrit Kaal budget of 2023 that ensures there is something for everyone. The push on digital public infrastructure and the national information registry for lending is a great upside for credit growth in India. There is a continued focus on agriculture through the allocation into growing agri credit to dairy, fisheries, animal husbandry, etc. The allocation of ~80K crs to PMAY is a good push towards housing for all. For the MSMEs, the increase in allocation for credit guarantee schemes will continue to provide a boost to the small manufacturing sector of India. Most of all, the allocation of capex of 10 Lac cr – the highest ever – is a big plus. It is empirically proven that 1 Re of capex would lead to 7X return over the next few years. This would go along law to make India a 10 TN USD economy.
Overall, no populist announcement and a very balanced budget with fiscal prudence.”
Sonali Kulkarni, Lead – Financial Services, Accenture in India, says “The focus on improving credit access and creating digital public infrastructure for agriculture along with the existing Agri-stack (India Digital Ecosystem of Agriculture), will unlock new growth opportunities for agri-tech SMEs and entrepreneurs as well as farmers. Access to granular data via these digital initiatives will enhance access to agri-credit for this segment and also drive new business models for banks as a result of better credit discovery and risk management.
The extension of the Digilocker facility to enterprises and MSMEs, KYC reforms, a more integrated approach towards identity management processes, and ongoing innovations to the India Stack will help banks, NBFCs, and fintechs to underwrite better and more efficiently. Even though clarity on the exact contours of the National Financial Information Registry is awaited, it seems to be a step in the right direction towards more efficient and transparent access to credit.
Finally, the expanded credit guarantee scheme for MSMEs will be critical to continued economic growth across industries and expanding employment opportunities.”