Budget 2023: Industry Pins Hopes On Increased Govt Funding And Support For Online Initiatives
Tax incentives and financial benefits for edtech players will boost the ecosystem substantially, expect industry leaders
Union Finance Minister Nirmala Sitharaman is expected to present the Union Budget 2022-23 on February 1, 2022. This is the fourth budget of Prime Minister Narendra Modi's NDA government in its second term. The government's announcement of a slew of significant economic reforms over the past three years has bolstered the engines of economic growth. However, sustained higher growth must be supported by increased consumption and a favourable investment atmosphere in the country.
Let us look at different sectors and what to expect from them.
Dr Rajesh Verma, Dean of Strategy & Marketing at Mittal School of Business, Lovely Professional University
The year 2022 had a significant impact on the education sector, from increased technology adoption to easily accessible online education and adaptable degree programs. Next year, the industry is anticipated to grow more due to the use of technology.
In that context, technological upskilling has become one of the key trends in education for 2023. Workflow automation is becoming more and more common across industries. The sharp transition from subject-based, rote learning to more skill-oriented learning methods will be a significant trend in 2023. Education experts emphasize the value of developing cognitive thinking, problem-solving, and management skills. The application-based syllabus, which steers clear of merely facts and figures and instead encourages students to apply what they have learned to real-life scenarios, is becoming more and more common.
In the modern world, detailing is also crucial. In line with that, a significant trend in education for 2023 will be the variety of subjects being taught in traditional college and university curricula. The course and subject options available today are, in fact, unconventional and revolutionary in many ways, ranging from applied linguistics to artificial intelligence, from food anthropology to ethical hacking, and from culture studies to abacus science.
Prashant Kumar, Founder and CEO, weTrade
The Budget comes at a time when there is a lot of activity in the crypto sector. After the announcement in the last Budget, the government should examine the 1% TDS and reduce it. Cryptocurrency should also be considered closer to other equity assets.
Given that the G20 is looking into a global crypto framework under India’s presidency, the government should consider bringing out some industrial regulations for the sector in this budget. It is the need of the hour to protect consumer interests.
Manu Awasthy, CEO and Founder, Centricity Wealth Tech
The Union Budget 2023-24 will be presented against the backdrop of geo-political uncertainties, high inflation, and slowing global growth. At this juncture, carefully thought steps to enhance domestic sources of growth would be crucial to maintain a steady trajectory. Measures to reduce the cost of capital, power, logistics, land, and labour would be most welcome along with steps to grow employment, capacity utilisation and social infrastructure.
For private investments to grow, factory-level business and enhanced incomes in the agriculture sector would be indispensable. The budget expectations look positive, but recessionary and inflationary tendencies must be kept in check. Factory output and growth in agricultural incomes seem to be the government's focus, along with growing consumption. Capital goods, banking and consumer durables could be beneficiaries of some positive budgetary allocations.
Consumption and expenditure are 2 integral pillars of India’s growth story. Capacity utilisation and manufacturing sentiments are contingent on these 2 factors. With purchasing power looking to grow in the post-pandemic era, coupled with the government’s vision of Atmanirbhar Bharat, infrastructure, capital goods and consumer durables could be the main beneficiaries. Infrastructure, agriculture, and capital goods could see positive momentum coupled with banking as credit penetration continues to improve. The government’s focus is expected to be on growing consumption and improving infrastructure.
John Kallelil, Founder & CEO, XED
The upcoming Budget is being presented at a tumultuous time in world history. While there have been a number of welcome economic reforms announced by the government in the past three years, Budget 2023 needs to be more strategic considering the global recession and inflation. From the EdTech perspective, there are a few key expectations for the Budget 2023 in India. One expectation is increased government funding and support for online initiatives. Support from the government on subsidised rates and incentives for all, similar to Singapore, would encourage innovation and growth in this sector. Tax incentives and financial benefits for edtech players will boost the ecosystem substantially.
Additionally, there may be expectations for measures to improve digital literacy using technology. Overall, the EdTech community in India is likely hoping for a budget that recognizes the importance of education technology and takes steps to support its development and adoption.
Sukhesh Madaan, CEO, Blaupunkt
More and more consumer electronics are being equipped with microphones in order to support the integration of intelligent assistants and immersive audio experiences. The incorporation of AI computing and audio processing within APUs or SoCs for specific end systems is another noteworthy development.
The market for wireless audio equipment is rapidly growing as a result of shifting consumer media consumption patterns and the rising popularity of mobile devices. Customers increasingly use their laptops, tablets, and mobile devices to wirelessly play audio on speakers. This kind of consumer behaviour is what is causing the rise of Bluetooth and Wi-Fi-enabled speakers. To capitalize on the equipment's rising popularity, manufacturers are also introducing wireless audio products or platforms. Popular Wi-Fi audio devices include the Echo speakers, SoundTouch system, and Wi-Fi speakers.
Scott Horn, CMO, EnterpriseDB
Everything we do and every dollar we spend must ultimately contribute to making our customers' lives easier. As enterprises compete to stay relevant in a challenging market, we will continue to see the acceleration of cloud-based technologies. As such, we are making investments in product development and engineering resources to help customers reduce on-premises equipment — and the cost of doing business.
Sunil Gandhi, CEO, JLNPhenix Energy
The upcoming budget can be a big opportunity for the EV industry as the government may focus on policy changes and on initiatives for infrastructural improvements to enable cost-effective Lithium-Ion battery production and faster EV adoption. We are expecting the government to make big announcements for EVs, the Energy Storage System (ESS) and EV charging infrastructure.
Reduction of import duty especially on the parts used in the lithium-ion batteries can also be presented in the upcoming budget. There is a need to relook at the GST rate for Lithium-Ion batteries and reduce it from the current rate of 18% and match it with the GST rate applicable to EVs i.e. 5%.
Sathvik Vishwanath, CO-Founder & CEO, Unocoin
India's Finance Minister, Nirmala Sitharaman, has proposed a new taxation scheme for cryptocurrency trades in the country, including mainstream options like Bitcoin and Ether. The move marks a significant shift in policy after years of unregulated trade and a lack of regulatory definition for such assets. The proposals are the first step towards creating a more detailed framework for the comprehensive taxation of cryptocurrency trades, and the consultation process is ongoing. Under the current system, cryptocurrency transactions in India are subject to a flat income tax rate of 30%, regardless of the value of the transaction or profits being made.
There is also a 1% tax deduction at source (TDS) rule in place to track every crypto exit transaction. The high tax rates have led to a 90% reduction in crypto volumes across India. In order to support the growth and development of the crypto market in India, the finance minister could consider reducing the TDS rate and the income tax rate, allowing loss set-off and carry-forward, and implementing a tax rate based on the total profits being made.
Sumit Gupta, Founder, Viral Pitch
The economy is growing speedily in terms of its Purchasing Power Parity and also consumption rate, there's a clear chance of witnessing a surge in brands competing for that sweet space in their potential customer's carts. Today, when a large percentage of customers are able to identify them as creators and the industry is valued at $16.4 billion, It wouldn't be a lot to expect some relaxation in TDS for small creators which will increase their in-hand payout. I can also see the surge of AR/VR and Metaverse-oriented campaigns. In addition to that, with YouTube Shorts, as Creators will become eligible to apply to YouTube's Partner Program and get monetised, this is the time when the budget can also emphasize boosting technological enablement to execute creators-led campaigns. This will prove to be a remarkable step in the direction of empowering creators and accelerating brands alike.
Influencer marketing has proven its mettle more as a strategic lever in marketing. I feel optimistic about the Budget and I think this would be a remarkable Budget to present and promote our country as a creator's marketplace and a hub of creators' specific technology. Hence, ultimately unleashing the timeless potential of Indian brands on a global level.
Dr Kanury V S Rao, Co-Founder & Chief Scientific Officer (CSO), PredOmix
Introducing new technologies and inventions can take the healthcare industry to a whole new level. The creative side of those inventions including advanced Artificial Intelligence, Machine Learning, and the Internet of Medical Things (IoMT), etc in the industry needs more support and funds from the government, particularly the start-ups and small businesses. The growth will naturally result in engaging new investors in the healthcare segment.
This may also increase patient access by establishing improved infrastructure and capabilities backed by equivalent expenditures in upgrading essential hospital infrastructure, diagnostic lab infrastructure, and ambulatory/home care facilities outside of health facilities. The most important thing to take care of today is to upgrade the healthcare funding with Concessionary loans, allocate land for new hospitals, and promote CSR investment by making it tax-deductible promoting CSR investment by making it a tax-deductible investment.
Sandesh Ambhore, CEO and Founding Director, Styleyn
The budget should prioritise infrastructure improvements and the elimination of any inefficiencies in the supply chain to ensure the smooth operation of the fashion retail industry. In addition to lower tax rates, functional fashion start-ups in the market expect easier compliance and tax simplification. Furthermore, the government's primary goal should be to motivate both skilled and unskilled workers.
Naveen Kulkarni, CEO, Quantumzyme
While India's efforts to be the leading Pharma exporter are laudable, there is an urgent need to consider the environmental impact and support the Green Chemistry initiative. More specifically the contribution of biotechnology is to reduce the environmental impact of chemical manufacturing.
This convergence of chemistry and biology in developing biocatalysts has already been proven in providing clean industrial processes across the globe. India has to incentivise chemical companies to adopt these new technologies and support homegrown R&D efforts.
Fiscal incentives to consider the R&D expenses of large pharmaceutical and chemical companies who partner with Indian MSMEs on this front will boost not only the MSME economy but also create awareness of technology adoption for a cleaner and greener environment.
Nandita Krishan, General Manager (Client Engagement, Facilitation and OD), Marching Sheep
Budget 2022 spoke about credits and income tax bands being linked to earnings, an after-effect of the rise in wages post-pandemic. As a result, last year this translated to income tax band changes and increases to the main tax credits. The effect was seen in the form of changes in several components other than the tax rate, such as surcharge and cess, which are paid by individuals as well as corporates, on top of the tax paid on their earned income. Post-Covid, a higher employment ratio owing to the rapid recovery of the economy thereby creating more jobs, and the financial constraint which people experienced during Covid, has put more focus than ever on net take-home pay. Hence, a natural expectation for most of India's population from Budget 2023 is to see a range of positive income tax changes to support households who have been hit by rising costs. Even though blanket reductions across the board is unlikely, there may be targeted measures for individuals and groups, ensuring the maximum impact is garnered. Another point to consider in Budget 2023 is Ease of Business. While tax certainty for businesses should continue and corporate rates should be maintained, Decriminalising GST and TDS will go a long way to bring down the already rigid and stringent law for direct taxes in India. This decade belongs to India and a friendly Budget in 2023 is what we need to make it a roaring success, for individuals, businesses and the country as a whole.
Rishabh Bhansali, Co-Founder, FanClash
The gaming industry is expanding at an unprecedented rate, with the market expected to reach $3.9 billion by 2025. The growth of the gaming sector benefits the growth of other government-focused sectors such as semiconductors, fintech, telecom, and IoT. Gaming has the possibility of altering how the new India learns. The sector is looking forward to the government's progressive policy structure as well as fair treatment from the GST council. With adequate support, the online gaming industry has the potential to significantly boost the government's drive to create a $1-trillion digital economy.
Praachi Abrol, Co-Founder & COO, 9 Yards Technology
We adhere to the Prime Minister's philosophy of bringing business, creating employment, and building infrastructure to continually upskill resources because we fall under the MSME category. We've created an environment that supports professionals like family members in just two years.
Since data is the oil of the 21st century and being a game changer in the IT business, we have a separate tranche of Enterprise Information & Communication (ICT) budget raising cybersecurity by manifolds.
We’ve had the foresight to establish Global Capability Centres (GCCs) that have not only acted as offshore risk-preventive establishments but have become innovative hubs leveraging emerging technologies.
In a nutshell, we are devoted economic contributors who help India recover in a V-shape from the recent COVID threat. We humbly ask the honourable Finance Minister to make loans more accessible and to offer financial breaks to businesses like ours. The assistance will be given with both hands, allowing us to succeed in our shared goal of turning India into a VISHWAGURU!
Yash Jain, co-founder, of Nimbus Post
The Indian logistics industry needs shorter delivery timelines which can be achieved with the use of advanced technology. Plus, the technology should be available at economic rates so even small-sized brands can leverage the latest tech for a superior logistics experience.
Delivering orders fastest from one corner of the country to another at the lowest cost is the biggest challenge for the logistics industry at the moment. For example, if a seller needs to deliver an order from Chennai to Assam, it should ideally be delivered in one day and at a minimal cost.
Other major expectations:
The industry is in dire need of world-class infrastructure, electric vehicles, IT implementation, decongestion of roads, road/port capacity expansion, lower fuel cost, more logistics parks, improved warehousing and automation, and transparency in govt policies.
Pooja Singh Rathore, Co-founder, Gigzeu
The budget should focus on reviving the growth of private consumption (low per capita consumption) and increasing the capital expenditure in the country. Indian growth has been primarily fueled by middle-class-led consumption, especially in urban markets. However, most of our population falls in the lower income category. This is the right time that we focus on providing money and job opportunities to people at lower strata. Cutting direct taxes & indirect taxes which impact middle & lower-income group people will increase consumption levels. Capital expenditure increase will create more employment & decrease the inefficiency in the system. A special package should be designed for financial/formal employment inclusion of domestic gig workers/work industry as this sector employs large populations which are informal in nature and key for increasing private consumption.
Arjun Khazanchi, co-founder & chief legal and strategy officer, Rooba.Finance
Most experts believe that the government will reflect fiscal prudence in light of growing interest rates and the impending slowdown of large economic powers like the US while also navigating a tilt towards the interest in India as a viable financial superpower in the coming decades.
There is a slow change will be need to carry out in order to see that come to fruition but the $5 trillion may not be as far as was initially believed. Tax collections in even in this environment have been rising and there is no expectation of easing rates.
There is broad consensus around a slowing in growth in the short term but inflation is sticky around the 6-8 per cent levels before a reduction follows. There are tools at the disposal of the central bank but typically these are blunt force tools lacking surgical precision. There are hopes that the blockchain world may see some form of regulatory clarity in the coming months but nothing concrete around the budget, which does leave room for further uncertainty in the space.
Kishore Ganji, Founder at Astir Ventures
The government has been incredibly supportive of the start-up ecosystem and has played an indispensable role in nurturing the Indian start-up space into what it has evolved currently. Some possibilities that we would like to see include sector-focused funds to ensure that founders are focused on creating ventures in diverse sectors. Another area where we would like to see further support is to provide incentives for the investor, such as tax rebates to promote start-up investments as a widespread phenomenon.
Dr G Pardha Saradhi Varma, Vice-Chancellor, KL Deemed to be University
In the upcoming budget, we are expecting due consideration by means of higher budget allocations to infrastructure development for the effective implementation of the national education policy. Separate budget allocation is appreciated for technological enhancement, knowledge upgradation, advanced laboratories, and software, which can bring transformation in learning systems, and changes in pedagogy. The expansion of digital infrastructure to promote online education is also the need of the hour. Policies encouraging research and innovation, intellectual property, accelerated programs in the education industry, and provision for lesser taxation are desired. Also, there should be more focus on schemes and policies that encourage skill development and entrepreneurship, seed fundings, capital funds amongst the aspiring future leaders.
Nandini Mansinghka, CEO of Mumbai Angels
India’s start-up ecosystem has grown to be a serious contender on the international stage, and there are ample opportunities for the government to enhance its position globally. There is palpable anticipation around the upcoming Budget 2023, which must focus on harnessing the employment opportunities created by the growth of the start-up ecosystem. It will be important for the government to revise and rationalise taxes, such as in the case of employee ESOPs. Helping start-ups meet their daily capital needs is another crucial area that will require government intervention, and it should bring the minimum alternative tax rate down from the current 15% to 10% or 9%. There is a lot of activity in the crypto sector, which will emerge as a new industry generating fresh employment. In order to help revive crypto trading in the country, the government should reconsider the prevailing 1% TDS and reduce it, while introducing industry regulations within the new budget. Moreover, future jobs will focus on technologies like AI, cloud and cyber. The upcoming budget must consider introducing initiatives that focus on building these skills, working in collaboration with Indian businesses to help manage the increasing labour force. Another key area of focus for the new budget is developing a start-up founders committee, which could help build entrepreneurship and finance education curriculums for colleges that enable the upcoming generation of entrepreneurs.
Sagar Agarvwal - Co-Founder & Managing Partner, Beams Fintech
In the upcoming Budget 2023, we hope to see the government of India implement policy decisions that are motivated towards incentivising funding and employment. This could include deferment of time of payment of tax on stock options for employees (ESOPs) of more startups. Currently, this deferment facility is only available for start-ups that hold an Inter-Ministerial Board Certificate. We urge the government to extend this service to the employees of start-ups registered with the DPIIT. This could help the numerous Fintech companies hire and retain talent. The government could further improve the current investment landscape by allowing insurance companies, EPFOs, and others to invest in alternate investment funds. Additionally, there is an urgent requirement for reform in the minimum alternative tax (MAT), which should be reduced from 15% to 9%, as it would help smaller businesses meet their daily working capital requirements. These reforms could go a long way in boosting India’s start-up economy. On the business side, we would like to see some changes in agri-space, giving select agri-focused NBFCs access to low cost capital, in a structure similar to NABARD, could help ease the borrowing cost for farmers and accelerate their financial inclusion. Export/Import tax benefits to MSMEs in certain sectors like steel, pharma, chemicals etc. could help in expansion of SME production in the country. From a PE/VC fund perspective, we would also like to see some parity between capital gains taxes between unlisted and listed entities. We would also like to see norms encouraging the flow domestic institutional capital from pension funds etc. towards start-ups.
Apoorva Ranjan Sharma, co-founder and managing director, Venture Catalysts ++
The anticipation around the approaching Budget 2023 has been palpable. The union government will need to address various demands that will aid the growth of the world’s third largest start-up ecosystem. To begin with, there is a crucial need for a simple and separate tax framework for Private Equity and Venture Capital investors, along with start-ups. There should be parity for capital gains tax between listed and unlisted securities. The atmosphere for a successful start-up ecosystem generating employment must include an easier, single point taxation policy for ESOPs. Further, if Indian start-ups are allowed to list in overseas markets, it could help improve their valuations drastically. It would also be highly beneficial if a relatively simpler regulatory framework is implemented, enabling PEs and VCs more flexibility in terms of investments. So, if the Budget 2023 is able to introduce and implement these changes, we are certain that India’s vibrant startup culture can grow to become the biggest in the coming years.
[Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP News Network Pvt Ltd.]
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