Opinion: Analysing the Union Budget

Finance minister Nirmala Sitharaman listed seven priorities in the Union Budget 2023.

 

1. Inclusive development

2. Reaching the last mile

3. Infrastructure and investment 

4. Unleashing the potential

5. Green growth

6. Youth power

7. Financial sector

 

Along with this, the finance minister also made the new tax regime more attractive. The rebate limit has been upped from Rs 5 to R 7 lakh. There is an easing of rates in the slabs. She also positioned the new tax regime as the default one. But there is no compulsion to shift from the old regime. This may help to increase the buying power of certain segments. 

 

There is no populism in the budget. One marking difference is that the budget points to the continuity of the Government’s economic strategy with the hope that good economics isn’t necessarily bad politics. It stays on course for fiscal consolidation. 

 

I also think that the budget is extremely progressive in line with the Indian growth story. It has significant announcements to drive entrepreneurship specifically focusing on agriculture, AI and education and manufacturing. This year's budget focused on infrastructure growth and connecting Bharat with the rest of India.

 

The budget has positives for the startup sector too. The government has proposed to extend the date of incorporation for income tax benefits to startups by a year from 31 March 2023 to 31 March 2024. Also, the benefit of carrying forward losses on change of shareholding of start-ups has got extended from seven years of incorporation to ten years. 

 

The Government will set up 100 labs to develop apps based on 5G and the 'Make in India' push is now being extended to artificial intelligence. The Government has planned to set up as many as three centres of excellence for AI under a campaign titled ‘Make AI in India and Make AI work for India’. 

 

The Government will soon come up with a national data governance policy under which it will share data (anonymised) with researchers and academia. The Government is also extending the scope of DigiLocker, a citizen’s digital document wallet, to assist innovation in the fintech industry. Soon, there will be an entity DigiLocker that will allow MSMEs, large businesses, and charitable trusts to store and share documents with authorities and regulators, banks, and other business entities. 

 

The Government has announced relief in customs duty on the import of certain parts and inputs, such as camera lenses, and extended the concessional duty on lithium-ion cells for batteries. With electronic vehicles taking off in India, the Government has extended customs duty exemption on importing capital goods and machinery used to manufacture lithium-ion cells for EV batteries. The government is also encouraging drone startups through the ‘Drone Shakti’ program which includes building various applications and leveraging Drone-As-A-Services (DrAAS). 

 

Overall boost to manufacturing, availability of higher disposable income for certain segments, lowering of taxes in some areas, and increased spending in infra will help to grow the economy. This will augur well for the AdEx growth in 2023-24. It sets the ambition of positioning India as the technology leader in the world.

 

(The author is CEO, Agilio Labs)