All eyes are on the Union Budget 2023-24 as it will be the last full budget before the 2024 general elections.
Before presenting the budget, Finance Minister Nirmala Sitharaman held several pre-budget meetings with various ministers, departments and industry representatives.
Among other things, the Confederation of Indian Industry (CII) has urged the Finance Minister to reduce personal income tax rates. In fact, some policy observers are expecting that the budget will unveil a road map for a revised income tax regime.,
Insurance industry seeks expansion of limits or creation of a sub-section For insurance, especially protection products like term insurance. Similarly, the health insurance premium exemption limit is expected to increase by ₹25,000, should the incentive for health insurance increase.
in agriculture, would expect the government Roadmap to ensure long-term viability of the sector’s industry and more efficiently manage inherent risks such as weather, thereby stabilizing farm incomes. Agricultural input manufacturers hoping for tax exemption their research and development (R&D) spending and cuts in the Goods and Services Tax (GST) and basic customs duty for agricultural chemicals in the upcoming Union Budget.
to promote the manufacturing sectorThe Finance Ministry is considering expanding the Production Linked Incentive (PLI) scheme to about seven additional sectors, including e-cycle components, toys, textiles and household goods (all materials including cotton), high-end smartphone components, furniture, and leather shoes.
“A major chunk of funding for new PLI schemes is expected to come from unutilized funds for existing PLIs. But some additional outlay can also be allocated.
The source pointed out that the budget for the PLI scheme is not likely to exceed the ₹1.97 lakh crore already allocated, as substantial savings have been made under the scheme so far, and they are increasing every year. Under the PLI scheme, the savings or any unutilized amount can be reallocated to other departments that require funds under the scheme.
The PLI scheme announced in the Budget 2020-21 to create global champions in manufacturing is available for 14 sectors so far. These include pharmaceutical ingredients, large scale electronics, medical equipment, technology products, pharmaceutical drugs, telecom and networking products, food products, white goods, solar PV modules, auto and auto components, ACC batteries, MMF and technical textiles, special steel, Huh. and drones.
While the budget faces a policy conflict between nurturing a nascent growth recovery and dwindling fiscal space, Infrastructure is expected to be a major gainer High allocation. The huge multiplier effect of infra on growth and employment is well known.
It is anticipated that the government will increase capital outlay with a focus on roads, railways, drinking water, sewerage, urban and rural infrastructure. It may also reveal measures to improve the availability of long-term funds for the infrastructure sector. In addition, steps may be taken to encourage long-term lending through infrastructure bonds/tax-free bonds, as may further steps to attract private sector investment. Also, cement as a sector can also benefit from the government’s focus on housing and infrastructure and higher allocation in road and housing schemes.
Economic Survey 2022-23 It highlighted that the Centre’s capex spending increased by 63.4 per cent in the first eight months of FY23 and that another growth driver of the Indian economy in the current year was the private capex rush from January-March quarter of 2022 onwards.