For MSMEs the Budget aimed to provide support and enhance ease of doing business. The revamped credit guarantee scheme with enhanced outlay, use of PAN as a common identifier for businesses and enhancing presumptive taxation limits were some of the key takeaways. Here’s how the small business sector reacted to the Budget announcements.
Harpreet Singh, Partner – Indirect Taxes, KPMG in India
Input tax credit (ITC) restriction on CSR expenditure, restriction on filing of GST returns after 3 years from the due date, ITC reversal on in-bond transfer of goods, penalty on E-commerce operators (ECO) for allowing unregistered/ composition vendors who are not allowed to make supplies through ECO are some key GST announcements, that may not go well with the overall objective of seamless credit and promoting ease of compliances.
Rajendra Pratap Gupta, Founder of Digital Health Academy and Health Parliament
The ‘Saptrishi budget’ aiming at the vision of 2047 for a self-reliant India, has set the right priorities with investments to boost growth and jobs. How well the bureaucracy implements the provisions will hold the key. Overall, a good vision is laid for ‘New India’.”
Amit Gautam, Co-founder and CEO, InnoverThe 2023 Union Budget embraces an all-encompassing strategy to unleash the full economic potential of India. The emphasis to expand India’s technological capabilities through investments in Centers of Excellence for Artificial Intelligence is a strategic move towards catalyzing the Digital India vision. Furthermore, the government’s initiative to set up 100 5G labs will widen the scope of AI applications and pave the way for adopting Metaverse, Blockchain and other digital technologies for businesses.
Prashant Kumar, Co-Founder & CEO, zingbus
The Union Budget 23-24 will act as a major booster for the travel & tourism industry helping the beleaguered sector with much-needed support. The government’s plan to develop an environmentally conscious lifestyle through green mobility adaptation and reduction of carbon emission to net zero under the ‘panchamrit’ scheme will help boost the green mobility plan in the travel industry by deploying EVs.
We are aligned with the government’s plan of boosting green growth, which will escalate EV production on a larger scale. The decision to reduce excise duty on battery production and pump storage would offer impetus for EV manufacturing to take off.
Rampraveen Swaminathan, MD and CEO, Mahindra Logistics
We welcome this budget as it focuses on sustainable growth and infrastructure development. The announcement of setting up an Urban Investment development fund (UIDF) for Tier 2 and Tier 3 cities will provide a much needed boost for smoother and faster logistics transportation and will further ensure greater connectivity in tier -2 and tier-3 cities. Identifying 100 critical transport infrastructure projects will have a positive impact on the nation’s last and first mile connectivity. Additionally, the announcement of 50 new airports, helipads, and aerodromes will enhance the regional air connectivity across the country.
Rahul Mishra, Partner, Kearney
The short budget speech has continued the thrust on being future ready and driving sustainable development. Investments across infrastructure, support to MSMEs and startups will all have a multiplier effect in driving economic activities. The sustainable and green agenda is driving a lot of good quality capex – whether in EVs, Renewables, Hydrogen, Gas, etc. Also, investment in digital, industry 4.0 and 5G technology will drive faster adoption of digital in our lives and businesses. All this, while not creating a very large gap between the earnings and expenses. With so much investment announced and planned, it will be important to see the markers of success – what do we want as an outcome?
Bharath Aitha, Vice President of Marketing, eInfochips
For a technology-driven & knowledge-based economy, the budget has put a lot of emphasis on digitalizing India and various industries, which is a significant improvement in the fast-moving world. The ‘centers of excellence for AI’ will be a major game-changer with respect to technological advancements. Creating an effective AI ecosystem will surely bring ease and quickness to the processes.
Satya Vyas, Founder and CEO, projecthero
The government’s continued push for infrastructure development is gratifying. The government aims to establish an Urban Infrastructure Development Fund (UIDF) with an expected budget allocation of Rs 10,000 crore per annum to create urban infrastructure in Tier 2 and Tier 3 cities. They also plan to incentivize private investment in infrastructure development. These are welcome moves that should prove to be a huge boost to the real estate and construction sectors and will massively aid job creation.
Ashwani Awasthi, Managing Director – South Asia, RICS
It is a very progressive budget focussing on development of physical and digital infrastructure with inclusive growth. As an institution in the construction, real estate & infrastructure sector, increase in capex by 33% to Rs 10 lakh crore is a sign of the government’s continued commitment and push towards infrastructure development. Furthermore, the decision to set up an urban infrastructure development fund is a much needed step for rapid urbanization. This is the budget that has all the recipes for India to leap ahead.
Kami Viswanathan, Senior Vice President, FedEx Express, MEISA Operations
The Union Budget 2023 demonstrated the Government’s vision to expedite infrastructure development, with the announcement to increase capital expenditure. This will help put the economy on an accelerated growth path.
Furthermore, the budget emphasizes the government’s commitment towards the “green growth” approach. The indirect tax proposals to boost green mobility will provide a further impetus to accelerate the adoption of EVs in India. Lastly, the measures taken to support and enable MSMEs in India, who play a pivotal role in burgeoning the Indian economy, will help accelerate the sector’s growth trajectory.
Ashish Kukreja, Founder and CEO, Homesfy.in
With some significant moves in capital gains taxation, the overall budget looks good, and we expect a positive impact on the economy, including the real estate sector.
Cap for deduction from capital gain on an investment in residential houses under sections 54 and 54F to Rs 10 Crores will induce growth in affordable residential property sales Increased affordability for homebuyers, as money at their disposal, is going to increase tremendously. Housing for all will further boost the real estate sector with PM Awas Yojana and extended CLSS. Pricing in real estate might have a positive impact on homebuyers’ decisions. A boost to infrastructure will indirectly boost the real estate sector
Hardika Shah, Founder and CEO of Kinara Capital
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’s demand 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.
Vipul Verma, Executive Vice President, Wadhwani Advantage at Wadhwani Foundation
Additional infusion into the credit guarantee outlay will help increase the number of MSME enterprises in the formal financial ecosystem. This can further help in improvement of the MSME/s operations, growth and scale, leading to an upkick in job creation. The impact will be more notable in some geographies where the potential to grow the number of MSME/s is substantially higher.
Shishir Goel, Founder, GoGroup
The latest budget has received a mixed response from the startup industry, with the extension of tax holidays and the establishment of an agriculture accelerator fund being seen as a boon for a nation where agriculture remains a cornerstone of the economy. However, the lack of action on the rationalization of Dividend Distribution Tax, Long-Term Capital Gains on unlisted equities, and the exercise of Employee Stock Ownership Plans has left the startup community feeling unsatisfied.
Neha Suyal, Co-Founder, Woovly
The Union Budget 2023 will provide support for Indian companies to expand locally and globally through 2023. There is a need for the fiscal policy this year to focus on India’s evolving digital infrastructure. This has been demonstrated by the widespread adoption of UPI, even in small stores. To ensure their penetration into rural regions, e-commerce and D2C markets must receive more financial backing – something that I am optimistic the government-run Open Network for Digital Commerce will provide.
Kunal Bahl, Co-Founder, Titan Capital
Budget ‘23 is a reassuring balance between investing for growth & maintaining fiscal discipline. Emphasis on infrastructure spending, green tech and further development of public digital infrastructure augur well. Tax breaks for the middle class will boost spending sentiment.
Devashish singh, co-founder and CEO of MrMed
I think it’s great that the government is creating seed funds for startups. It’s obviously just a fraction of the total capital available, but if administered well, this can scale much faster and it already has. The total allocation to Startup India Seed Fund has increased to 283.5 crore from the initial commitment of 100 crore.
Priyadarshi Nanu Pany, Founder & CEO of CSM Tech
The maiden budget for Amrit Kaal has cemented the vision of a progressive Digital India with distinct focus and impetus on AI, 5G, digitization, tech-skilling and IT-driven frameworks.
Pradhan Mantri Kaushal Vikas Yojna 4.0 and the plan to set up 30 Skill India international centres will reinforce India’s skills leadership and targets skilling in emerging technologies like AI, mechatronics, drones etc. DigiLocker for MSMEs, integrated Income Tax portal and app-based tourism promotion for 50 selected destinations add further fillip to India’s tech aspirations.
