Union Budget 2023: Key Takeaways

FM Nirmala Sitharaman has outlined 7 Priorities For first Budget in Amrit Kaal

 o Inclusive development

o Reaching the last mile

o Infra & investment

o Unleashing the potential

o Green growth

o Youth power

o Financial sector

 

📍 India's Economy to grow at 7% in the current year. FY24 Fiscal Deficit Target at 5.9%

📍 Rural Focus - FM announces that the Centre will Spend INR 2 Lakh Cr on Free Food Grains for all priority households under PM Garib Kalyan Yojana.

📍 Green growth would be one of the priorities of the budget. They will help Reduce carbon intensity and create green jobs

📍 National data Governance Policy to be brought out for access to anonymised data

📍 Health - Budget 2023 that a mission to Eliminate sickle cell anaemia by 2047 will be launched by the government.

📍 Mahila Samman Savings Certificate for 2-year period up to March 2025 – Will offer deposit facility up to INR 2 Lakh @ 7.5% with partial Withdrawal option in the name of Women and girl

📍 Digilocker - One stop KYC maintenance system, the legalisation of the permanent account number (PAN) as a single business identification.

📍 50-year Interest Free Loan to State governments extended for 1 more year

📍 DBT scheme for youths - To provide support to 47 lakh youths in 3 years, a Direct Benefit Transfer under a pan India national apprenticeship scheme will be rolled out.

📍 Vehicle replacement – Replacing Old Polluting Vehicles – Scrap Old Vehicles of Central & State Govt including Ambulances – Budget allocation to be made

 

📍 Agricultural Sector 

• An open-source digital Infrastructure for agriculture & an agriculture accelerator fund focused on youth in rural areas
• PM PRANAM Scheme to promote balance use of fertilizers.
• INR 2,200 Crore for high-value Horticulture
• Increased Agri Credit Target to INR 20 Lakh Crore

📍 Infrastructure

• 100 critical transport infrastructure projects for last mile connectivity to be taken up on priority
• 50 additional airports for improving regional air connectivity
• INR 10,000 Cr per annum for Urban Infra DVPD Fund
• INR 6,000 Cr for promoting fisheries
• INR 7,000 Cr for Phase-III of E-Courts project

📍 Educational Infra

• 740 Eklavya Modern Schools and 157 new nursing colleges will be established
• Plan to Spend INR 15,000 Cr for vulnerable tribal group (PVTG) over 3 years
• 38,800 teachers to be recruited for the Centre of Excellence schools
• 36 Skill India centres to be set up across states
• National Digital Library for Children and Adolescents to be set up

📍 Research & Development

• 100 labs with 5G services for developing applications to be set up in Engineering Institutions
• Centres for Excellence for Artificial Intelligence – 3 centres to be set up in top educational institutions
• New Pharma Program for R&D through Centre for Excellence
• Lab Grown Diamonds – R&D grant to be provided to one IIT to reduced Cost of Production

📍 Energy Sector

• INR 35,000 Cr for energy transition and net zero objective
• Target to reach production of green hydrogen to 5 MMT by 2030
• INR 20,700 Cr to be invested for renewable energy production

📍 Capex Big Jump

• At INR 10 Lakh Crore, the Centre’s capex target for 2023-24 is 33% higher than the budget estimate of INR 7.5 Lakh Crore for 2022-23
• Effective Cap Expenditure by centre at INR 13.7 Lakh Cr (4.5% of GDP)
• Plan to increase PM Housing (PMAY) outlay to INR 79,000 Crore
• Govt proposes INR 2.40 Lakh Crore for Indian Railways which is 9x over FY14.

📍 MSMEs

• Ease of Doing Biz - 39,000 compliances reduced
• The revamp schemes will take effect from 2023 through an infusion of INR 9,000 Crore in the corpus. This will enable another Collateral-free credit of INR 2 Lakh Crore. Further the cost of credit will be reduced by around 1%. This is effective from 01-April 2023

📍 Borrowings

• The Centre will borrow INR 15.43 Lakh Crore via bonds in 2023-24 on a gross basis - a new all-time high
• In net terms, the borrowing programme has been fixed at INR 11.8 Lakh Crore
• These numbers are broadly in line with market expectations of INR 15.5 Lakh Crore and INR 11.7 Lakh Crore, respectively.

📍 Custom Duty

• Relief in custom duty on Import of certain parts of mobile phones like camera lens and batteries by another year, open cells of TV panels cut to 2.5%, etc.
• Taxes on cigarettes Hiked by 16%, compounded rubber increased to 25% from 10%, etc

📍 Personal Income Tax

• 0-3 Lakh - NIL
• 3-6 Lakh -5%
• 6-9 Lakh - 10%
• 9-12 Lakh-15%
• 12-15 Lakh -20%
• Above 15 Lakh - 30%

The new tax regime to become the default tax regime. The rebate increased from 5 Lakhs to 7 Lakhs for tax free income in the new tax regime.

 

📍 Income tax rate

• Currently, the highest rate is 42.74% income tax under the new regime
• The FM has proposed to reduce the highest surcharge from 37% to 25% in the new tax regime, max rate of 39%

📍 Direct Taxes

• Processed more than INR 6.54 Cr Returns this year on the tax portal
• Revised Estimates – Total Receipts INR 24.3 Lakh Cr
• Net tax receipts – INR 23.3 Lakh Cr

Union Budget 2023: Banking & Finance Sector

India’s banking and finance sector is eagerly awaiting the Union Budget 2023, set to be presented on February 1st, 2023. The sector has been hit hard by the pandemic and the budget is expected to announce measures to support the sector and to lay out a roadmap for its growth and development in the coming fiscal year.

One of the key expectations of this budget is to address the issue of non-performing assets (NPAs) in the banking sector, which has affected the ability of banks to lend and support economic growth. The issue can be addressed by the government through measures such as creating a government-backed asset reconstruction company to take over and manage bad loans.

Another major expectation from the budget is to have measures to support the Small and Medium Enterprises (SMEs) sector, which too been hit hard by the pandemic is looking up to the initiatives by the government. There can be several measures by the government like providing credit guarantees, tax incentives, subsidies, and other measures to help the SMEs to survive and grow.

The government is also expected to announce measures to promote digital banking and financial inclusion in this budget. Digital banking has become more important than ever during the pandemic and the government is expected to announce plans to increase the number of digital transactions, provide subsidies for digital banking infrastructure, and to provide tax incentives for businesses and individuals who use digital banking services.

The insurance sector is also expected to receive attention in this budget. The government is expected to announce measures to increase the penetration of insurance in the country, such as providing tax incentives for individuals who purchase insurance policies, and to provide subsidies and other measures to support the growth of the insurance sector.

The budget is also expected to have measures to support the mutual fund industry. The government may announce measures to increase the penetration of mutual funds in the country, such as providing tax incentives for individuals who invest in mutual funds, and to provide subsidies and other measures to support the growth of the mutual fund industry.

Overall, the Union Budget 2023 is expected to provide a comprehensive plan for growth and development while balancing the need for stimulus to revive the BFSI sector, with the need for fiscal discipline to keep the country’s finances in check. The budget will also have to consider the ongoing pandemic and its impact on the sectors. The nation looks forward to the Union Budget 2023 with elevated expectations and optimism.

Union Budget (India) 2023 - Expectations

India’s Union Budget 2023 is set to be presented on 01-February 2023. This is the last full budget by the current government, before going for the general election in 2024. The budget is expected to address the country’s pressing economic issues and lay out a roadmap for India’s growth and development in the coming fiscal year.

The three words that have summarized the Central Government’s focus in the past three fiscals: Support à Recover à Growth. During its worst phase, the Govt. announced a stimulus package to support and recover the Indian economy. Now, the focus is shifted to growth.

The COVID-19 pandemic severely impacted the Indian economy. However, with the Government’s expansionary fiscal measures and stimulus, the Indian GDP bounced back in FY 22 with a V-shaped recovery. For FY23, despite global inflationary pressure, tightening of liquidity by central banks, and sharp appreciation of the US dollar, the GDP was still growing positively. India witnessed the following GDP growths - 

2020-21: negative 6.6%

2021-22: 8.7%

2022-23: 7%

The Economic Survey presented today has projected a GDP growth of 6-6.8% for the fiscal year 2024.

For the upcoming budget, the government should take steps to achieve the target of USD 5Tn GDP in the next couple of years.

1. Infrastructure: The government should commit capital expenditures for infrastructure development and build ports, roads, airports, and other infrastructure. The upscaling and balancing of the infrastructure and the digitization of agencies to make them work not in silos but in synchronization.
2. PLI Scheme: An extension of the Production Linked Incentive Scheme is highly anticipated, given the fact that it reaped impressive results across 14 sectors, helping boost ‘Atmanirbar Bharat’. The scheme has received an excellent response and an extension will give an impetus to domestic manufacturing and growth.
3. Renewable Energy: India is the among the world’s largest producers of renewable energy, but we still have a long way to go. Despite a significant push from the government, solar installation in India has not taken the uptick to attain the desired momentum. To meet the 2030 Solar Mission Target, the government should announce tax benefits for companies installing solar panel plants and for taxpayers installing solar rooftop power systems.
4. Tax Benefits (Individuals): The extant limit of INR 1,50,000 under section 80C of the Act was last revised by the Finance Act 2014. Given the rate of inflation since then, it is the need of the hour to re-consider the limit and provide relief to the assessees especially the lower income group.  Similarly, the present limit of deduction under section 80D of the Act seems insignificant as compared to the amount spent on medical insurance. Even the medical expenditure incurred in Covid as well as post-Covid era are humungous and have immensely affected the pockets of a common man.
5. Standard Deduction (Salaried Individuals): A standard deduction of INR 50,000 is provided for individuals while calculating salary income. While there are limited avenues for a salaried individual to deduct from salary, person carrying on a business/profession are allowed to debit various expenses in their profit and loss account during calculation of income under the head ‘profit and gains of business or profession’. Notably, even the salaried individuals must incur various expenses such as travelling expenses, communication expenses etc. for which they are not allowed any deduction, although the same is incurred during employment. Keeping into consideration that the major portion of personal income-tax collection comes from the salaried class, it is prudent to expect some relief to salaried class.
6. Direct Tax: Tax concessions for partnership firms, Limited Liability Partnerships and foreign companies are expected, in line with the corporate tax rate cuts of 2019.
7. Agricultural Sector: The sector which continues to be the backbone of the economy has been hit hard by the pandemic and the government is expected to announce measures to support farmers and rural development. This could include increasing investment in irrigation and rural infrastructure, providing subsidies for farm equipment, and strengthening the supply chain for agricultural products.
8. Unemployment: The unemployment rate in India has been on the rise due to the pandemic and the government is expected to announce initiatives to support small and medium-sized enterprises, which are another backbone of the Indian economy. This could include tax incentives, subsidies, and credit guarantees to help these businesses survive and grow.

The Union Budget 2023 is expected to provide a comprehensive plan for growth and development while balancing the need for stimulus to revive, support and escalate the progress in the various sectors like Agriculture, Infrastructure, and Financial Services, among others. 

Productivity at Workplace

The theory without practical is lame and practical without theory is blind.

Employee productivity is a serious workplace problem and an expensive occurrence for both employers and employees, as well as unpredictable in nature. The productivity of the employees is critical to raise employees’ performance which contributes to the success of organizations, and it is influenced by many factors.

The working environment plays a key role in the employee’s productivity. The working environment is argued to impact immensely on employee’s productivity either towards negative or the positive outcomes. Various thoughts indicate that the factors such as dissatisfaction, cluttered workplaces and the physical environment are playing a major role in the loss of employee’s productivity, which depends on the willingness and the openness of the employees themselves on doing their job. Furthermore, a reward system based on the productivity of the employees motivates them to perform more of their tasks.

There are several factors such as physical work environment, equipment, meaningful work, productivity expectation, and feedback on productivity, reward for good or ineffective system, standard operating procedures, knowledge, skills, and attitudes contribute to employees’ productivity.

The job satisfaction-productivity linkage has been primarily discussed by theorists from these perspectives - 

• Organizational productivity depends on congruence between the technical and social structures of the organization
• The human relations perspective posits that satisfied workers are productive workers

Organizational productivity and efficiency are achieved through employee satisfaction and attention to employees’ physical as well as socio-emotional needs, best achieved by providing autonomy, participation, and mutual trust.

The success of an organization is a function of the productivity of the employees and is a driving force which will push these critical elements of the organization to improve and deliver better performance to push the improvements in the job performance. This research has explored the meaning of. Each factor, namely, work environment, organization culture, and leadership style have a different impact on the productivity of the employees. Furthermore, there are specific dimensions related to culture that impact productivity like creativity level. As for the work environment, all the factors that go under it have an influence on employees’ productivity.

Jack or Master: the dilemma between multitasker and domain expert

Every entrepreneur understands that growth is what creates value. The question is, how do you create the growth that creates value? Marketing, the world over has moved from the 4Ps and is primarily defined by the variables of 3Ps – Product, Process and People. They function as the cornerstone for everything your business does.

The best teams are those that have a mix of skills, expertise, and experience where the exact mix is defined based on the problem you wish to solve. To build the best team, start thinking about what it is that will have the greatest impact on your growth like prioritization, hiring or internal movement of the right resources, to fit it into your growth process, and most importantly stop expecting immediate results or dividends – don’t expect quick wins – sustainable growth evolves and then explodes and is not an overnight success.

It is a well-established fact that hiring or selecting the right team is usually not a cakewalk. It is time-consuming, cost-extensive, and can be a tricky business. Having the right team also helps the likelihood of raising investments. From an investor’s perspective, the firm or fund house looks at the four Ts – team, technology, total addressable market, and traction.

The hiring pattern is determined by a multitude of factors like sector, stage, and business model of the startup. While multitaskers are great for a startup that aspires to have a lean team, domain knowledge is an important indicator of potential job performance. Owing to the challenging environment in a startup, founders often need to hire employees who can work across departments and play a variety of roles at the same time. However, once a startup achieves the product-market fit and scales beyond 100 employees, specialists should perform functions to allow the company to solve problems efficiently while focusing on scaling. As a business grows and moves from agility to stability, companies should start moving from hiring multitaskers to seeking domain experts.

To sum up, domain experts and multitaskers are both valuable and critical for a startup. Hiring a candidate for a particular role involves considering factors like knowledge about the sector, pain points, and the solution.