The budget is a statement of vision and, in my belief and opinion, the “budget halwa” has been sweet for most sections of society. How do we evaluate Finance Minister Nirmala Sitharaman’s budget, especially in from the perspective of the challenging times we are in globally? As the saying goes: “We live in interesting times.” In such times, maintaining a balance in a prudent manner seems to be the answer. What does one normally expect from the budget? There can be several expectations: It needs to be growth-oriented; it needs to give comfort to all sections of society; it needs to take into account the possibilities of higher growth, even as it defends the current growth drivers of the economy. The budget is also expected to increase income streams potentially, reduce taxes, have a minimal optimization damage and create enthusiasm on the basis of current government standing in international markets. Some would also say that the Budget needs to be realistic and not over reliant on excess expenditure. In my opinion, the Budget scores 8.5 out of 10 in the current scheme of things and the difficult situation the world finds itself in. Beginning from the end, the revenue growth is at 11% which is a realistic estimate. Sticking to a medium term fiscal path of 4.5% with a realistic budget highlights the wisdom of the finance minister. States will be allowed a fiscal deficit of 3.5% of GSDP of which 0.5% will be tied to power sector reforms. This also gives comfort to the fixed income markets as borrowings are optimized and the yield is under control. This is important as rising interest rates dampen the animal spirits in the economy and the markets. With this, the foreign exchange markets would be relatively stable which is critical for our oil imports and imports of key parts needed by various industries like automobiles, oil and gas and many others like textiles. Digital payments continue to find wide acceptance. In 2022, they showed increase of 76% in transactions and 91% in value. Fiscal support for this digital public infrastructure will continue in 2023-24. To build capacity of functionaries and professionals in the securities market, SEBI will be empowered to develop, regulate, maintain and enforce norms and standards for education in the National Institute of Securities Markets and to recognize award of degrees, diplomas and certificates.
Boost to Agriculture
Most of our population relies on agriculture for a living and hence it is important to note that Rs 20 lakh crore has been allocated from a credit perspective. This is by far an encouraging boost for the sector. Over the next three years, one crore farmers are expected to adopt natural farming. For this, 10,000 Bio-Input Resource Centres will be set up, creating a national-level distributed micro-fertilizer and pesticide manufacturing network. Building on India’s success in afforestation, “Mangrove Initiative for Shoreline Habitats & Tangible Incomes”, MISHTI, will be taken up for mangrove plantation along the coastline and on salt pan lands, wherever feasible, through convergence between MGNREGS, CAMPA Fund and others.
MSME Sector
MSMEs are growth engines of our economy. Micro enterprises with turnover up to Rs 2 crore and certain professionals with turnover of up to Rs 50 lakh can avail the benefit of presumptive taxation. Provision of enhanced limits of Rs 3 crore and Rs 75 lakh respectively, to taxpayers whose cash receipts are no more than 5%. Moreover, to support MSMEs in timely receipt of payments, it has been proposed to allow deduction for expenditure incurred on payments made to them only when payment is actually made. Capital Expenditure increased effectively by close to double is an icing on the cake and will create demand for various sectors. It has been increased from Rs 7.33 lakh crore to Rs 13.7 lakh crore as per the speech of the Finance Minister. Are we, as growing enterprises, ready for 100% growth with this kind of a boost? I leave the question for you to decide. Also, the cost of unsecured loans under CGMSME, has been reduced by 1%. That means, opportunity is also there and shortage of funds, if any, can be obtained at a lower cost if your papers are in order. Capital Goods is likely to be a major beneficiary if you are an investor. Railways has also seen a decent budget increase and companies included in the sector like KEC Ltd and Integra are likely to do well. Indirect taxes also have been reduced through Custom duties, especially for machinery, aiding capex considerations at your end. So what are you waiting for? Ride the wave.
Senior Citizens
The increase in the Senior Citizen deposit limit from Rs 15 lakh to Rs 30 lakh at 8% has been more than welcome. That means that for a couple, at least Rs 60 lakh can be parked.
Personal Finance
Taxation under the new regime seems attractive; however, you need to consult your tax advisor as per your circumstances to see what is best for you. As per our thinking, the old regime is better if you are availing deductions. If not, then you may consider the new regime. 30% tax payable after Rs 15 lakh of income does seem attractive, so go ahead and evaluate.
Skill Development
The Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to skill lakhs of youth within the next three years. On-job training, industry partnership, and alignment of courses with needs of industry will be emphasized. The scheme will cover new age courses for Industry 4.0 like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills. 30 Skill India International Centres will be set up across different states. The digital ecosystem for skilling will be further expanded with the launch of a unified Skill India Digital platform for enabling demand-based formal skilling, linking with employers, including MSMEs, and facilitating access to entrepreneurship schemes.
Tourism boost
With an integrated and innovative approach, at least 50 destinations will be selected through challenge mode. In addition to aspects such as physical connectivity, virtual connectivity, tourist guides, high standards for food streets and tourists’ security, all the relevant aspects would be made available on an application to enhance the tourist experience. Every destination would be developed as a complete package. The opportunity is immense, seize the day! Anirudh Gupta is CEO, Ashiana Financial Services.