As the Indian government prepares to unveil its 2023 budget, industry leaders and experts have been sharing their expectations and suggestions for the forthcoming financial plan. From the need for increased investment in infrastructure and job creation, to calls for tax reform and support for small businesses, the pre-budget quotes from these leaders offer a glimpse into the key issues and priorities facing the country.
In this post, we’ll take a look at some of the most prominent pre-budget quotes from industry leaders and experts, and consider what they might mean for the 2023 budget and the future of the Indian economy.
Alok Katiyar, Co-Founder, WeClinic Homeopathy: Co-Founder of WeClinic™ Homeopathy. Born and raised in a humble family background in Kanpur, Uttar Pradesh, Alok pursued an Integrated Dual degree (B. Tech + M. Tech) in Chemical Engineering with Hydrocarbon Engineering from IIT-Roorkee.
“In order to achieve our goal of being a healthier and fitter nation, it is imperative and the need of the hour for India to move towards cutting-edge tech-enabled healthcare systems. And simultaneously, we as a nation must also focus dedicatedly on ensuring that healthcare services can reach every nook and corner of India. So, we at WeClinic Homeopathy feel that the upcoming Union Budget 2023 should prioritize on introducing more innovative schemes and policies that would aid the long-term growth of telemedicine, AYUSH-based healthcare and tech-enabled health systems.
As of date, a very small portion of the overall budget allotted for healthcare sector has been designated for the AYUSH space in the previous years’ budgets; but in the upcoming Budget, we expect it to increase substantially. Furthermore, the Government should also focus on the opening of new hospitals and primary health centers for AYUSH treatments.”
Dr. Akshay Singhal, CEO & Founder, Log9 Materials: “To accelerate the penetration of EVs in the country, in the upcoming Union Budget 2023, the Government should include EVs in Priority Sector Lending (PSL) in order to make financing EVs cheaper and making them more affordable for the masses. Also, when it comes to incentives and financial enablers, the Government must take into consideration not just the volumes of production committed by manufacturers, but also the technological superiority of the vehicles and battery technologies in terms of safety, longevity, and fast-charging so as to ensure only the best reaches the final customers.”
Ankit Alok Bagaria, Co-Founder, Loopworm: Works into an agri-biotechnology startup that takes inspiration from nature to convert organic waste into valuable products promoting health, nourishment and wellbeing for all forms of life.
“We at Loopworm feel that the upcoming Union Budget 2023 must attempt to positively transform the agriculture and biotechnology sectors in India from a differentiated lens.
When it comes to the agriculture sector in India, we have seen in the previous years that most of the time the budgetary money allocated goes into various subsidies or loans. While loans and subsidies are important for agri-stakeholders, the grant money to scale up innovative ideas to PoC to pilots to commercialization is minimal. On the other hand, the Indian biotechnology space also faces a similar dilemma. In the previous year’s Budget, a significantly large part of the allocated amount that went to the Department of Biotechnology was spent on autonomous bodies and institutes focussing on biotech research; however, support provided in terms of commercialization to start-ups or corporates remained limited.
Thus, in the upcoming Budget 2023, we would be happy to see more focus and support is given towards supporting commercialization of biotechnology companies or start-ups. Given that biotech machinery and equipment is quite expensive in India as of today, financial support with loans and subsidies could help a lot in accelerating commercialization and scale up. On the other hand, when it comes to agri-allied or agri-tech innovations and startups, we expect the Budget 2023 to make scale-up grants available as well, independent of whether or not any start-up has availed a smaller grant previously. If the start-up is ready, they should be helped with the money to scale up. Furthermore, the Budget should also be promoting precision agriculture and unconventional forms of agriculture such as Algae farming, insect farming, etc. with special allocations or incentives.’
Mahesh Shukla, CEO & Founder, PayMe: “The lending or financing industry has witnessed a significant revamp in recent years, with the financial technology or fin-tech players and the non-banking financial companies (NBFCs) having taken an exponential rise in lending or disbursing loans over conventional banks. In lieu of the transitions, the financial players are holding a host of expectations from the Finance Minister during the Union Budget 2023. The foremost expectation of the fin-tech players is the liberalization of the tax regime, i.e., reduction in startup taxes across the board with No GST until INR 10 crore turnover annually; which will significantly help Small and Medium Enterprises (SMEs) build a stronger economy and aid more jobs. We also expect enhanced support from the government for better partnerships with banks to strengthen the existing model of financing. The Reserve Bank of India (RBI) can revamp the regulations further to govern the fin-tech sector, which can bring in more transparency and will boost up the digitalization of the lending processes across the country, including in the rural areas.”
Ameve Sharma, Co-Founder, Kapiva: “We are glad that in the Union Budget of 22-23, a significant portion (Rs 3,050 crore) was allocated to the Ministry of Ayush to promote preventative healthcare. We are expecting this budget to increase further, in line with the uptick in consumer acceptance for preventive, traditional medicines in the post-covid era. The industry would appreciate an even greater increase in the budget earmarked for research grants in the field of Ayurveda, to foster innovation through government & industry collaborations, as the millennial consumer looks for proof of clinical efficacy. As a leading homegrown brand in the sector, we are hopeful that this Union Budget will contribute immensely to India’s Ayurvedic growth story.”
Kalyan C Korimerla, Managing Director and Co-Promoter, Etrio Automobiles: “To emerge stronger in realizing the fullest potential of the on-going electric mobility revolution, it is imperative that as a nation India must make its manufacturing capacities stronger and fortify its localized supply chains. We at Etrio believe that the upcoming Union Budget should focus on introducing more schemes and policies to support innovation and capacity-building, and to reward EV adoption.
To ensure that commercial or cargo EV adoption does not remain limited to the larger industry players, the Budget must incentivize small businesses and MSMEs to join the ICE to EV transition bandwagon as well. Furthermore, we would like to see Ease of Investing, Tax Rationalisation and EV Skilling & Upskilling as the guiding principles for the sectoral announcements in Budget 2023.”
Satyen Kothari, Founder & CEO, Cube Wealth: “There are a lot of varied expectations from budget 2023. We can expect some tax relief for salaried employees given the downturn in the global economy and increasing inflation and related to this, there is palpable hope for some changes in the income tax slabs. There is some buzz around a change in Section 80C limits, a reduction of GST, etc. Investment product taxation, i.e. LTCG and STCG may see simplification since there are many disparities in this area, especially in terms of private and public instrument investments. We ofcourse, are not in the business of predicting and will continue focusing on helping people build balanced, long-term, personalised portfolios.”
Satyam Kumar – the CEO & Co-Founder, LoanTap and Co-Founder at FACE: “The upcoming Union Budget is expected to focus on India’s economic growth and strengthening the digital infrastructure. We may look at measures to encourage investments in the financial sector and improved access to credit for MSMEs, start-ups and other small businesses. The Government of India has taken several steps in the past few years to improve credit accessibility such as launching credit guarantee schemes and extending access to financial services through digital platforms, which have enabled many people across the country to avail of banking services. This budget could further incentivize banks and NBFCs (Non-Banking Financial Companies) to focus on providing loans to underserved customers, as well as extend priority sector lending. Additionally, with the initiatives like the launch of the e-Rupee, ONDC, the onboarding of public sector banks in the Account Aggregator framework etc., there is an expectation that the government will push for digital infrastructure development which would help boost financial inclusion across rural areas in India.”
Tamanna Gupta, Virtual CMO & Founder of Umanshi Marketing: “Start-ups have led to an unprecedented rise in gig economy workers (food delivery personnel, cab drivers, etc) who work relentlessly as the start-up’s seamless operations.
However, since the gig economy is a relatively new concept to traditional employment, the rules governing the gig workers are not fully developed and they are not entitled to various benefits (minimum wages, insurance, a fixed number of paid leaves, etc) that a traditional employee does. This stratum of blue-collared workers suffers all the more on account of the lack of such provisions/ safety net.
It would be great to have the gig economy workers under the minimum wages act, to begin with, to provide them with their rightful compensation for their labor.”
Mohan Lakhamraju, Founder & CEO, Great Learning: “Equipping a large part of our youth with industry-relevant skills is a sure-shot way to propel India’s economic growth further. I believe the need of the hour is to expand avenues for India’s youth to have easy access to affordable higher education, providing multiple opportunities for them to develop cutting-edge skills. In this regard, a couple of initiatives can be taken by the Indian government in the upcoming fiscal budget – 1. Allow edtech companies to formally partner with universities to offer online and hybrid degree programs in order to achieve the Gross Enrolment Ratio targets set by the government and 2. Remove GST on upskilling programs to make them more affordable for people. Apart from improving the overall employability of the workforce, these measures will lead to more innovation and technological advancement in our country.”
Dr. Siya Seth, Chief Managing Director of Skoodos: “India is rapidly establishing itself as a global talent pool thanks to its young population. An early start to internationalization is essential to meet the government’s goal of making her 25% Indian in the global workforce by 2047. For human resource development, priority should be given to the education sector, which accounts for 6% of GDP. The previous budget launched a number of initiatives on Digital DESH, the Digital University Initiative and One Class One channel via PM eVidya.”
“While these are encouraging, there is still work to be done for India to become a truly global digital hub like pharmacies. Overall, the private education industry in India has some hopes from the next budget. Key demands include increased budget allocation, NEP implementation, and a path toward closer partnership between the private sector and government.”
Aarul Malviya, Founder of Zamit: “There is no disputing that the pandemic has accelerated a shift from a predominantly offline learning system to one of hybrid learning for not only school students but also post-school and university students and even career professionals. As a consequence, apart from a host of new-age edtech startups offering tailored courses and curricula taking personalization to new levels, the existing educational institutions have reinvented their work models also incorporating digital mediums and formats into their everyday operations and practices.
Now that the budget 2023-24 is around the corner, as an AI-powered edtech solutions provider for the school ecosystem, we expect that the government should focus on the following. First, the foundational infrastructure for digital learning must receive adequate impetus in the budget in the form of financial and other policy incentives such as tax support and subsidies for private players who come forward to invest and contribute in this direction. Second, given the pivotal role that the quality of teaching plays in terms of learning outcomes for learners, the budget should make provisions that would incentivize and help in improving the teaching methods and techniques of instructors and teachers.
The improved quality of teachers would not only result in students acquiring holistic learning but also make them adequately future-ready in light of the challenges that they might face in a more tech and skill-based workplace of the future. Third, the budget should ensure that digital technologies are utilized to the fullest in order to bridge the so-called access divide between ‘haves’ and ‘have-nots’. In other words, for those students dropping off in the middle of their studies, especially at higher levels, the budget should make allocations allowing them to rejoin their educational journeys.
At the same time, the budget should also encourage companies that are making efforts with a view to ensure that no child is deprived of education in this country. The overarching goal should be that every student wishing to study must be financially supported for his education.
Dr Amitabh Saran – Founder and CEO Altigreen, highlighting the changes which the new budget should involve in the EV sector: “2022 was a mammoth year for EVs. 2023 will see EVs becoming mainstream. It is noteworthy that GoI’s subsidy schemes like FAME supported this development. Electric three wheelers, which are the backbone of mass public transportation across India, are leading this transformation. We want GoI to take cognizance and expect an extension of the FAME-II scheme similar to the one given to two wheelers.
Afterall, it is the livelihood of the 3W owner that we will be impacting. The Indian e-commerce space is booming, providing the tailwinds for rising demand in EVs for last-mile delivery. Commercial banks need to be pushed to step in with financing support, and reduce the interest rates. We also look forward to rationalisation of GST rates. Currently, 5% GST is levied on EV sales but OEMs pay 28% GST for spare parts. Bringing them under the 5% bracket can lead to price reduction and an uptick in EV adoption (lower service costs). Range anxiety is one of the major challenges that has to be addressed by developing a robust charging infrastructure. We hope the government will provide more CAPEX subsidy (upto 40-50%) to install/setup charging infrastructure across India.”
Arun Kumar Gupta, CFO, Newgen Software Technologies Ltd.: “Investments and initiatives toward digital transformation have significantly accelerated in the post-pandemic world. With the Union Budget 2022-23, the government should bring policies and reforms to support enterprises in their digital journeys and facilitate their growth.
Initiatives like long-term work-from-home policies, simplification of the GST regime, and streamlining labour laws can facilitate a less-ambiguous and conducive business environment. Also, there is an urgent need to simplify the foreign withholding tax structure to ensure that full set-off is available to IT companies operating in multiple countries.
Special Economic Zones (SEZ) play an instrumental role in driving the Indian IT sector’s growth. Improvements in SEZ-related policies and their extension will help strengthen the sector further.
The IT sector is indisputably an integral part of India’s growth story. However, the government should stay mindful of the recent disruptions in the sector caused by the pandemic and ongoing global business uncertainty. The upcoming Union Budget is expected to bring conducive policy initiatives to incentivize the IT sector and accelerate its growth.”
Kedar Kulkarni, Manager, EDGE Program, Deshpande Startups: “In the last 8 years of Startup India, India has embarked on an ambitious and spectacular journey of becoming an innovation-driven digital economy and there is a DPIIT-registered startup in almost every Indian district. The time has come to consider the future trajectory of this ecosystem, especially with regard to the startups operating in Tier 2 and 3 cities. In the upcoming budget, we are looking for policies and announcements that are aimed at unlocking the true potential of the Indian startup ecosystem. Currently, startups in smaller towns continue to struggle due to a lack of adequate entrepreneurial support and capital, and irrespective of the potential, most startup founders either shut their shop or sell their ideas to larger companies. This not only deprives them of the opportunity to grow and contribute to the national economy but also reduces the chances of employment generation in the Tier-II, and Tier-III cities and the rural areas surrounding them. There is a need for financial allocations to build startup incubators in Tier-II and Tier-III cities which are end-to-end startup hubs that can take care of every need of an emerging entrepreneur. Investing in developing startup incubators through public-private sector collaboration will yield rich dividends in the years ahead. “
Sri Bharat Mathukumilli, President of GITAM and founder of Kautilya School of Public Policy: “In the Union Budget 2023-24, we expect a budgetary fillip to be provided to all areas within India’s education sector. The Budget committed last year to the education sector was 2.6%. The expectation is that at least 3-3.5% of the budget will be allocated to be spent on education, if not 6%. There is an urgent and important need to transform the education system. For example, modern tools like ChatGPT require institutions to have a strong technology infrastructure and skilled human resource teams that understand how to deal with this rapid change in technology. The government has the desire to increase the gross enrollment ratio (GER) in higher education to 50%. However, the institutions that are fueling this growth are largely private institutions. On the contrary, the support they get is very limited.
Speaking of intellectual capital, such as access to academic databases, journals and books, if India could invest in them at a national scale and make them available to institutions, it will go a long way in transforming the ecosystem. In addition to this, if low-cost funds could be made available to institutions committed to excellence, by the government, the institutions will be able to grow much faster.”
Dr. Ashvini Jakhar, Founder & CEO, Prozo: “There is incredible growth potential waiting to be unlocked in the logistics sector in India, and the upcoming Union Budget must be the catalyst that the industry needs. The biggest expectation is the implementation of the National Logistics Policy which was announced last year and aims to bring down the logistics costs to single digits compared to 13% to 14% at present. There is also an urgent need for the simplification of cross-border trade and FDI in warehousing. The government’s efforts towards improving infrastructure and development of logistics sector human resources under the PM Gati Shakti initiative need to be scaled and more funds allocated.
One of the most critical areas of logistics growth is the construction of industrial warehouses and cold storage facilities across India. It is expected that there will be a push towards improving transportation to Tier II and Tier III cities so that the new warehouses could be set up with greater ease, and the burden on existing warehousing hubs is reduced. The development of warehousing facilities in such areas would make rentals cheaper, and land acquisition is also likely to be simpler and more affordable for logistics companies.
It is also imperative to streamline single-window clearances for new warehouse establishments and eliminate outdated regulations such as the compulsion to have a factory license for setting up a warehouse. Today, 3PL and specialized e-commerce logistics players are essential, and the segment needs support through infrastructure and capital access. By reducing steel prices for warehouse construction, the government can enable logistics companies to significantly reduce costs as steel is one of the key components. Similarly, offering subsidies and incentives to warehousing operators that use solar panels to generate renewable energy for consumption at their warehouses, would help in the sustainable development of the logistics sector. We are now operating in an era where sustainability and digitization should go hand-in-hand, and that’s where simpler and affordable finance access is needed to set up smart and specialty warehouses and cold storage facilities all over the country. It is eagerly anticipated that the government will pay adequate attention to these as well as other industry expectations raised from time to time!”
Yuvraj Krishan Sharma, Co-Founder & CPO Edverse: “The Indian Edtech market has seen steady growth in recent years due to technological advancements, increased demand for skills in a competitive job market, and improved accessibility of education. The sector is projected to continue growing in 2023.
In the upcoming budget, the government should focus on promoting emerging technologies in the education sector and building a strong e-learning infrastructure. This includes the adoption of AI, AR, VR, ML, and metaverse, which can help improve overall learning, upskill, overcome geographical barriers, and create more job opportunities for the future generation.
The government should also emphasize mandating and investing in skill development, providing training in these technologies, exploring the possibilities of the metaverse, and offering subsidies for EdTech startups in areas such as R&D, tax incentives, and financial benefits.
Additionally, a comprehensive policy to help start-ups survive and grow during predicted economic downturns should be implemented. Improved internet connectivity, including last-mile access, reasonably priced 5G plans, and strict data privacy rules, should also be prioritized to benefit from the technology of metaverse and make education more accessible to everyone.”
Namit Chugh, Investment Lead, W Health Ventures: “The increase in allocation of budget for National Health Mission (NHM) and launch of the ‘National tele-mental health programme’ in the last Union Budget 2022, was a step forward in the right direction. We expect this budget to increase the allocation for mental health and further build resilience of national mental health infrastructure, as well as incentivize strengthening of the talent pool of counselors and mental health professionals – to handle the massive mental health challenge we are facing. We need additional investment on skilling other healthcare personnel such as nurses and lab technicians as well.
On the digital front, now that a robust platform and infrastructure for managing digital registries of healthcare providers and patients is created, there is a dire need to boost adoption and accessibility. The government should allocate more budget for rolling out this initiative. The creation of longitudinal data for masses will unlock several use cases such as data interoperability, personalized healthcare recommendations, hyperlocal pharmacy data, etc. and will further accelerate India’s digital health agenda.”
Amit Relan, Co-producer at Woot Factor Brand Architects: “The events industry has experienced a quick recovery post the pandemic, driven by increased demand for live events and shows, as well as increased corporate interest in hosting physical events. As event architects, we specialize in a variety of program types, but MICE (Meetings, Incentives, Conferences, and Exhibitions) has seen particularly strong post-pandemic growth. GST relaxation, particularly in the travel segment, will provide additional support for this growth and help the industry fully recover.
To continue growing this sector, it is important to allocate funds for the development of strong MICE infrastructure in locations beyond Goa, Rajasthan, and Kerala. Both of these budget considerations will have a direct impact on the events industry in the coming year.”
Akash Gupta, CEO & Co-founder, Zypp Electric: “While 2022 served as the year when the EV transition became a reality for our country, 2023 will be remembered as the turning point for the EV sector. In the previous year’s budget, the GST was reduced from 18% to 5% on EV purchases and rents, which aided acquisitions. This time, the same decrease should apply to services as well. The EVaaS industry is avidly anticipating this move on the GST front with reference to the GST rate being reduced to 5% for EV-led services like last-mile deliveries, battery swapping, etc. Even though the EV market is currently expanding quickly, there are concerns about cutting off subsidies, which would severely restrict the sector’s growth. In order to promote the use of electric vehicles, I believe it would be smart to extend the incentives for at least another year. Additionally, I think that Indian EV enterprises are searching for larger funding sources, but the nation’s economy still lacks significant VCs who are well informed about the EV industry. As a result, it is expected that the government would allocate a certain amount of money for EV startups in this year’s budget.”
Shalu Jha, Co-founder & COO, PRandit Solutions: “For many years now, the soft power of today’s media outlets in showcasing our country’s socio-economic prowess as well their contribution in creating impeccable reputation for today’s businesses and entrepreneurs have been ignored, or at best, utilized minimally or partially. And keeping the same in mind, the Government in this year’s Budget must work towards reversing the existing scenario and offer adequate sops/incentives and other enabling pathways to allow stakeholders to be able to leverage the optimal potential of new-age media and traditional media platforms. Since now is the right time and also high time we bring emerging-technologies to the forefront vis-à-vis India’s efforts to uplift the media sector, I expect that media-tech is being provided a priority sector status in the Union Budget 2023, which in turn will lead to more and more media-tech innovations and startups to be able to flourish in India in the longer run. Lastly, we also hope to see some more stimulus packages and progressive policy moves focusing on growth of India’s entrepreneurial community at large, and women entrepreneurs in particular.”
Samarth Kholkar, CEO & Co-Founder, BLive: “The Budget comes at a time when India has surpassed Japan to become the 3rd largest auto market. India is fast turning into an EV hub and we have high expectations from the Budget this year. We expect that the government will take steps to boost consumer confidence and encourage them for higher EV adoption through incentives and benefits. EV financing has a key role to play in this and we are hopeful that the Budget will carry announcements that will make financing accessible and affordable for all. Further, range anxiety and EV prices remain a barrier in EV transformation. We hope that the government will take steps to build a robust charging infrastructure, announce subsidies for battery manufacturers to enable fast-charging infrastructure across India and benefit EV owners. We also expect rationalisation in GST rates to bring down costs of EVs. Currently 5% GST is levied on ex-showroom price of EVs but the makers are contributing 28% GST for the spare parts. We want all EV parts to be included in the 5% bracket to support the EV manufacturers. We are hopeful that this will find a mention in the Budget speech this year.”
Manoj Sharma, Co-Founder, policybazaar: “
Tax Relief for Salaried class: The salaried class is generally tax compliant and pay their taxes with honesty. They should be rewarded and get special benefits for the tax amount paid by them. The Government can allow some deduction applicable only for salaried class, or they can be offered some incentive based on the tax paid by them. Also, allowance of chapter VIA deduction in new tax regime and extension of time limit for claiming deduction under chapter VI-A (till date of filing ITR) could be considered for salaried class.
Increase in 80C limit: It would be interesting to see an increase in limits for 80C since no revision has been made since many years now. Also, it will be beneficial if 80C limits can be linked to income slabs.
In addition, extra tax incentives for tax payers who invest in higher education will be a great move. Apart from that, any home loan (personal loan or loan against property) taken by tax payers for purchasing or constructing a house should get tax benefits.
I think insurance is an important aspect for everyone and government should encourage all salaried and other tax payers to purchase insurance plans at an early stage so that they remain insured throughout their life. A special new section should be introduced in the budget for allowing tax deduction on the amount spent on the insurance plans. Introduction of following tax benefits for loans other than home loans could also be considered,
a. Tax benefits for personal loan taken for construction or renovation of residential property.
b. Tax benefits on repayment of principal amount of education loan.
80C should be divided in 6 major segments with limit for each segment:
Education- Tax deduction for amount spent on education of children
Parents’ Health- Tax deduction for amount spent on parents’ health and insurance
Insurance- Tax deduction for amount spent on health insurance and term insurance
Medical expenses- Tax deduction on amount spent on medical treatment of major diseases for self and dependent family members and preventive health checkup.
Home loans- Tax deduction for EMI/ interest payments for loan taken for purchase of property for self use.
Donations- Tax deduction for grants given to NGOs working for social causes
Apart from the existing tax benefits available under 80C framework, following tax benefits could also be considered,
a. Allowing tax benefits for investment in various investment schemes such as REITS, AIF and other shorter period government schemes such as KVP, NSC.
b. Increasing the limit of investment in NSC.
c. Allowance of tax exemption or concessional tax rates for shareholders investment.”
Rahul Raj, Co-founder, FloBiz: “Union Budget 2022-23 will be remembered by all as a landmark “digital budget” for some pathbreaking beginnings made towards leading India into digital transformation. All necessary registrations, such as those for forming a business, opening a store, registering for the goods and services tax (GST), obtaining an MSME (micro, small, and medium businesses) certificate, etc., should be handled through a single window. That will enable MSMEs to make significant time, effort, and financial savings.
The government should promote manufacturing, consumption & export of Made In India products. Digitization will also help in widespread e-invoicing implementation and administration for SMBs, helping in efficient business processes and operations. At present, the GST, with the full input tax credit, is 18 percent for all software products produced and sold in India. This rate must be tapered down to support indigenous creators of software intellectual property (IP) in India.
Speaking of startups, they may find it easier to fulfill their daily working capital needs if the minimum alternative tax rate (MAT) for qualifying enterprises is reduced from 15% to 9%. This is especially true in the early stages.
Tax incentives for MSMEs adopting technology: Indian MSMEs are witnessing constant push from the government towards digitisation of business functions. In budget 2023-24, the government may also consider announcing a full-fledged integration of different portals, such as e-Shram, Udyam, etc. servicing MSMEs. Last year, e-invoicing was made mandatory for businesses with turnover above 10 crores. The government is expected to further reduce the turnover threshold to 2-5 crores. Further, the government may consider announcing tax incentives on expenditures associated with expanding and using new-age technology applications for operational and organisational purposes.
Targeted interventions to improve MSME credit: Announcements with respect to providing MSMEs with a flexible line of credit is one of the essential requirements. Existing mechanisms such as Factoring and TReDS have not been very successful in facilitating credit access to micro enterprises. Micro and small enterprises face severe short-term capital needs because of challenges in the supply chain and delayed payments. There is an expectation that the government in Budget 2023-24 may come up with different targeted interventions to resolve supply chain finance concerns. Further, it may consider providing an inclusive regulatory framework and ease in regulatory burden for NBFC-fintech partnerships involved in supply chain finance.
Neobanking framework in India: In Budget 2022-23, Finance Minister Nirmala Seetharaman announced the setting up of 75 digital banking units (DBU) in 75 districts by RBI-regulated banks. The step is aimed to enable access to the core banking services for rural markets and improve financial inclusion. The government may consider the NITI Aayog’s recommendation to issue a licensing framework for such digital banks focussing on creating niche solutions for specific underserved segments, such as credit products for MSMEs.
Credit guarantee schemes for MSMEs: In its effort to recover from COVID-induced slowdown, India has witnessed the significant growth in credit to MSMEs in the last two years. This was largely supported by incentives provided under the Emergency Credit Line Guarantee Scheme (ECLGS). In Budget 2022-23, the government may also think of revamping credit guarantee schemes, grants and subsidies to support loans originated by partnerships between RBI regulated entities and fintech entities.
Introduction of National Logistics Policy: The government may announce implementation of National Logistics Policy (NLP) in this budget, as introduced by PM Narendra Modi in September 2022. NLP has been framed with the objective to reduce the cost of logistics in India from current 14-15% of GDP to the global average at 8% of GDP. NLP aims to mobilise digitisation and data-driven capabilities for streamlining cooperation and support within India’s logistic sector and improve ease in movement of goods. NLP 2022 lays out an extensive multi-stakeholder scheme for the growth of the entire logistics ecosystem to solve concerns of high cost and inefficiency. In 2025, it was predicted that this industry will reach 380 billion dollars with a 10-12% CAGR.”
Neelam Chibber, Co-founder and Managing Trustee of Industree Foundation: “Climate’ action could be integrated from a perspective of ‘Gender’ and ‘Equity’ lens. Their intersectionality will lay a foundation towards socio-economic resilience, especially for rural women. A strong emphasis could be laid on sustainable value chain job creation for rural women, bringing economic livelihood opportunities closer to their homes.”
Neeraj Tyagi, Co-Founder, We Founder Circle: “As a startup builder, we would expect some bold initiatives by the government to encourage more participation of small check investors as angel investors in the ecosystem. This could be in the form of tax exemptions on returns from investments, as already the investment is risky in this asset class, so an incentive in the form of tax rewards would work as a catalyst.
Also, for startups, a tax exemption slab increase in GST would be a big step. Moreover, more active participation of government supported Incubations and seed funding would bring a lot of pace in the Tier 2/3/4 cities startup innovation.”
Vikas Singh, Co- Founder & CEO at Sugmya Finance Pvt Ltd.: “The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme has been instrumental in extending microfinance to underserved segments and decreasing the credit gap. NBFCs are hopeful that the guarantee cover under the CGTMSE scheme will be restored to 75 per cent since it was reduced to 50 per cent earlier. In addition, more efficient guidelines are needed for the Emergency Credit Line Guarantee Scheme (ECLGS) as it plays a crucial role in preventing loans from slipping into non-performing assets (NPAs).”
Mahek Mody, Co-founder of Up⤴️ believes: “The emergence of startup culture in our country has been instrumental in driving global competitiveness across various industries and sectors. The government’s Make in India initiative has been a key contributor to GDP growth and employment, and we anticipate continued support for domestic startups. We hope to see PILs being introduced to previously overlooked segments like consumer appliances and smart home technology. With the decreasing costs of chip prices, Indian companies have the potential to offer consumers innovative and cost-effective products and any additional support from the Government would only accelerate the digital transformation”.
Arjun Sinha Roy, Co-Founder, iRasus Technologies: “2022 has seen a rise in EV sales, especially EV two-wheelers, which has seen a whopping rise of 300% compared to the year 2021. This shows the promise of the EV market in India; not only will it grow if it gets the right push, but India also has the potential to be a global pioneer in the EV sector. The key focus of the EV industry should now be on building scale and capacity. The urgent need of the hour is to drive Reliability, Interoperability, and Economies of Scale across all parts of the EV ecosystem. Some sectors that need support and push from the Government are the Batteries (both hardware and software), OEM, and Charging Infrastructure. The Budget should focus on ease of business and encourage more local players to enter the market. Areas like component Localization, access to components, etc, if addressed, then the Indian companies, big or small, can build competitive products at competitive prices. In 2000 India became a software hub. Maybe in the 2020s, India can become the EV hub of the world”.
Anushka Iyer, Founder and CEO, Wiggles: “With the 2023 budget, we expect an increase in the healthcare sector which is the need of the hour, especially for animals and some species that are on the brink of extinction. The healthcare sector is important for both humans and animals. The first and foremost area that needs to be focused on is an increase in financial support for veterinary services. A substantial budget will foster an environment that pushes more people towards creating quality services that can serve both pets and community animals. It shall also help veterinarians to provide better treatment. Secondly, there must be a concerted effort towards education and sensitization for all, not and not limited to the younger generation. Everyone should be educated on the simplest way to approach or help a pet and community animal. Sharing the same envirnoment, it’s important that government should lend support in creating animal-friendly neighbourhoods that ensure animals are safe and healthy like human beings. Think of this as a green city equivalent for animals, which requires funding and intent.”
“With the 2023 budget, as a startup founder, I hope that the government continues to increase fund allocation towards supporting the MSME sector. As more MSMEs are coming up, they are one of the major contributors to the country’s economic growth. We are excited about ONDC as it has the potential to fundamentally improve the customer’s experience of discovering brands digitally. This also helps in setting up a vision and products and sales increase. The impact that the budget has on the growth of the platform will directly affect many companies like us. We are looking forward to the Budget and expecting an increase with more attention towards the startup sector.”
Ahmad Hushsham, Co-Founder, Yoho: “The Indian government is committed to promoting economic growth and development, and this focus has continued since the pandemic. We hope to see a budget that outlines a plan for increasing economic growth along with more investment in infrastructure and incentives for corporate capital expenditure. One important step in this direction would be simplifying the GST structure. Currently, the GST rate on footwear with a sale price above INR 1000 is 18% and the rate on footwear with a sale price below INR 1000 is 12%, which is confusing. Additionally, in the past, GST was set at a rate of 5%. However, it has significantly increased over the past few years and is now at 12% and 18%. This amidst increased cost of raw materials is hurting the industry. Reducing the GST rate and having a uniform rate on all footwear would lead to lower prices and potentially increase consumer demand.
Another way to support growth and development would be to encourage the local production of footwear raw materials, components, co-polymers, moulds, and machinery at competitive prices under the “Make in India” initiative. This could boost India’s export ambitions and create employment, leading to lower overall prices and improving consumer sentiment.”
Dinesh Patidar, Chairman and Managing Director of Shakti Pumps (India) Ltd. : “We anticipate the Union Budget to place a major emphasis on the energy sector, considering the stated targets in green energy and its significance for economic growth, the government is likely to broaden the PLI incentives to integrate supply chains, fund and mobilize resources, and counteract the possibility of global risks and slowdown in development. To meet the goal of using non-fossil fuel power, solar will continue to play a significant role. Tax holidays should be provided to increase the ease of doing business for this technologically intensive industry. The government could also consider allowing the availment of credit or reducing the GST rates for the supply of raw materials used in the manufacturing of solar products. A major focus of the Budget will be to encourage the manufacturing of domestically produced cost-effective solar modules and a relief in GST for the R&D products required for the development could go a long way in establishing sufficient infrastructure for research and development that meets global standards at competitive prices. We believe that the government will offer concessional import duties on solar modules, which could defeat Atmanirbhar Bharat’s purpose of import substitution.
The PM-KUSUM scheme is a significant initiative for solarization that focuses on farmers who hold the majority of the market share for solar pumps. However, progress has been slow thus far; some states have approved solar pumps but haven’t installed any while most face the challenge of increasing awareness among the farmers about the scheme. In the future, we anticipate the availability of financing options for farmers in the form of formal credit to cover costs that are not subject to subsidies, the adoption of the proper pricing model to effectively expand the installation to remote areas, and the streamlining of administrative procedures. Another major focus of the Budget will be to provide the necessary infrastructure for the adoption and expansion of electric vehicles, by offering tax breaks and development incentives. After the success of the First & Second Round of Production Linked Incentive (PLI) Scheme, the third round should also be announced to attract investment in Electric Vehicle Component Manufacturing by offering incentives to Non-Automotive Investor /startups equivalent to the incentive available to the existing Automotive Investor.”
Agnishwar Jayaprakash, Founder and CEO, Garuda Aerospace: “The drone industry budget expectations will be Service Linked Incentive. The industry is huge and its main aim is to receive a major nitro boost propulsion for Service Linked Incentives schemes as for every 1 indigenous drone manufacturer in the country, there are more than 450 drone service providers. With this India is nearing to its goal of becoming the global hub for drone technology. The budget should include more subsidies for drone pilots for their training and skilling programmes with government partnerships. The industry budget should be used for drone applications in fields like defence, mining, logistics and transportation with providing jobs.”
“Budget 2023 is expected to be a culmination of governance, environmental sustainability and innovation. The government should start recognizing the startup community, as it has great potential to aid in India becoming the number one global economic superpower. From a manufacturing startup perspective, the government has laid out the PLI Schemes, but I believe that a Service Linked Incentive (SLI) should also be introduced as well, especially for the drone segment. Government organizations like Invest India, Startup India, and Make in India, should connect more with the startup community and develop a separate ministry for startups. The budget expectation for startups would be to simplify the regulations and incentives scheme aimed for startups and their stakeholders.”
Animesh Samuel, Co-founder & CEO, E42: “While the former two budgets kept the focus on technology for creating a better India, this time’s budget is anticipated to be conducive to situating India as a leader in the AI space across the world. Building new technologies and services, taking a more proactive approach to digital transformation, automating more processes, and employing AI and machine learning that can adapt to the changing demands of businesses are some of the areas where we see the scope for massive advancement in this space. We, at E42, are eager to see what the budget has in store for AI and the policies that will propel India’s technology-led economy!”
Harshwardhan Patwardhan, Co-Founder, Chappers: “Lower GST would help the overall industry as it would mean lower upfront costs while buying raw materials and also lower MRP’s for customers to buy which would mean higher demand for our products.”
Uday Narang, Founder and Chairman, Omega Seiki Mobility: “In order to further enhance EV adoption in India, EV-financing will become the biggest enabler. Attractive economics and push by governments has already increased the demand for EVs substantially. At OSM we sincerely believe that the Indian Government is the most progressive Govt. and we have seen tremendous support from the Policy Makers and the Govt. both at the union and at state level and we applaud the same.
We have the following expectations which we feel that would help India to further accelerate the EV Adoption and this achieve the Hon’ble PMs goal of cutting down emissions by 2030 and reaching our Goal of Net Zero well before 2070:
- The first and foremost is the standardization of battery voltages and form factors
- Extension of FAME II subsidy to promote conversion of ICE vehicles to electric.
- Commercial EV segment, which is expected to be a key growth vertical, is faced with a lack of financing options. All the national, state and cooperative banks we expect Govt. to ensure in providing financing at equivalent rate of ICE engine Vehicle
- As EV manufacturers, we expect the government to correct the inverted duty structure. As of now, GST input on raw materials is north of 18%, while outward supplies stand at 5%. By amending this framework, the government can help manufacturers like us to optimize cash flow
- There is a tremendous requirement to mandatorily ensure EV charging infrastructure to be set up in all existing and upcoming housing projects and commercial establishments. Also, incentivising setting up EV charging stations in existing residential areas, housing complexes and commercial establishments will go a long way in setting up the infrastructure
- Testing equipment’s standardization in the Battery packing norms to ensure Safety and Quality”
Kishan Tiwari, Co-Founder and CEO, TSAW Drones: “As a drone technology and drone development company a more inclusive environment needs to be created for prototyping, testing and making the product market ready. Since drones share similarities with the aerospace domain, testbeds are expensive and limited, and prototyping is costly and limited, and prototyping is costly affair. Government support in this field would give a great boost to the industry. As a drone logistics provider service, linked incentives will be a boost. And more clarity on beyond visual line of sight operation would promote investment in the industry.
As a drone manufacturer, I believe PLI schemes should have a plan to indigenous technology. The incentives post a particular tenure should be given only if the manufacturer has indigenized the production to a particular level.”
Vidyarthi Baddireddy, CEO and Co-founder at PickMyWork: “Despite pandemic-induced inflation, the nation witnessed flourishing entrepreneurial ventures as a consequence of early-stage acceleration and venture capital, as well as a push from the gig economic model to initiate and prepare businesses for the future of work. Given the prospects that the Indian startup ecosystem holds for global investors, this year’s Budget will be worth watching out for. While this is a promising indicator, the urgent priority of the hour is to devise a policy that further encourages a sturdy startup ecosystem through easier loan disbursements, e-approvals, and more government-led incentives in India’s tier-I and tier-II cities. Although the Fund of Funds for Startups (FFS) has played an integral role in mobilizing domestic capital in the Indian startup ecosystem, government interference should occur directly in this respect to ramp up the startup perks being offered, particularly for early-stage startups. Moreover, the government should also recognize relieving angel tax constraints in Budget 2023, as startups are frequently in the early stages of their growth and may not generate the same level of income or revenues as established businesses. Taxing the funds startups secure from investors may demotivate them from advancing creative solutions and developing new technologies.”
Mayank Arya, Co-founder at Yes Madam: “While the Union Budget 2023 is aiming to drive nationwide comprehensive holistic growth, it should also recognize the critical need for tax structures that make it easier and more advantageous for startup entrepreneurs – especially those who are bootstrapped – to raise capital. Furthermore, it should applaud reforms that promote the expansion of women-led or pro-women empowerment enterprises. Given the high GST in the salon and wellness industries, customers are often motivated to pay cash instead of using credit cards or other forms of payment processing; thus, there needs to be a proper tech solution created in order to circumvent this issue. To encourage a thriving tech driven salon industry similar in stature as Zomato – and stimulate online transaction usage – we believe that GST should be decreased from 18% down for salons and related wellness establishments.”
Sujata Pawar, Co-Founder & CEO at Avni: “While the Union Budget 2023 will primarily focus on promoting comprehensive holistic growth across the nation, but it would be great if women’s health and wellness, particularly menstrual hygiene, are kept on high priority. For India to spring up from its menstrual waste problem, we eagerly await policies from the government that fosters the marketing and sale of organic biodegradable menstrual products. This small step has the potential to reduce the tons of commercial plastic sanitary napkins that end up creating mountains of landfills. Although the emphasis should be ‘Make in India’, lowering import taxes on raw materials could assist address the initial bottlenecks and motivate more female-led businesses to start contributing towards a greener India.
In terms of financing, the seed fund scheme is a great initiative, however, it needs to be more transparent and structured so that startups can easily navigate it. A central database of all possible schemes through which startups can access funding must be established. It will also be beneficial to have a counsellor or guide accompany the startup to the appropriate incubator. Moreover, a single-window policy for all registrations such as incorporation, Pan, GST, MSME certificate, and so on will help save time, effort, and money.”
Dr. Ganesh Nikam, Managing Director and CEO of Biojobz: “Since it is a budget wish list, I would like to limit my wishes to two very important demands on taxation. One, considering the holding period, ESOPs should be considered long-term capital gains (LTCG) for tax purposes and should only be taxed at the time of sale rather than at the time of exercise. Two, to incentivize and increase retail investments into early-stage startups, a) Tax credit upto to Rs 5 Lakhs from personal taxable income for any investment loss in recognized startups b) Deferring of capital gains in case it is reinvested again in startups or any SEBI recognized funds.”
Niraj Hutheesing, MD & Founder at Cygnet Infotech: “Budget 2023 is likely to focus on enabling the ease of doing business by streamlining compliances and plugging revenue leakages. On the digital front, financial products and services providers have enormously transformed the way people save, invest, borrow, and pay over the last decade. The pandemic was the first test of resilience for fintech companies. Backed by the Digital India initiatives by the Government, financial institutions are increasingly looking to provide a more personalized customer experience by partnering with fintech companies to create new products and services. For example, digital financial inclusion is evolving from ‘spend’ to ‘lend’ and tends to fill a gap left by the traditional financial institutions. The consent-based GST returns, e-invoice and e-way bill data is likely to be allowed by making suitable amendments in the law to allow flow-based lending. The new age fintech companies are well-positioned to use such data and analytics to disrupt the traditional forms of doing business, target niche markets and orient their products to maximize consumer satisfaction.”
Mridu Mahendra Das, Co-founder & CEO of Automovill: “Impending recession and negative sentiments in the market has been a great concern for growth stage startups. Demands for higher margin and lean structure from stakeholders and investment ecosystem making startup journey tough for any charismatic results. This could be the time where Govt. could do best for boosting Startups, MSME sectors and entrepreneurs vying for growth post pandemic. We strongly support GST regime, however at the same time MSMEs/Startups also need flexibility of in filings. Working in B2B environments and long-standing contracts makes regulatory filings difficult, which needs more freedom in terms of time and options.
Coming to the Automotive and specially aftersales segment, the entire sector is reeling under tremendous pressure against the availability of spares and low spending of consumers. For better customer satisfaction, we need support for facilitating the availability of imported spares, relaxation on rules by insurance companies and curbs on vehicular lifetime management. Reducing the GST norms for billing on labour specially in After sales ecosystem is always a demand. Labour rates should be at 5% GST like the service charges in some other industries (i.e. hotels). Most of the auto workers lies in the bottom of the pyramid, reducing GST on labour to 5% will boost the income and livelihood opportunities as well as can create more entrepreneurs in the segment.”
Muzammil Riyaz, Founder, EVeium Smart Mobility: “The Indian government has launched policies and measures to incentivise the EV industry, but the same can only be leveraged when a parallel charging infrastructure is developed. While we are encouraging people to opt for EVs through subsidies and incentivization, in the end, only a hassle-free experience can sustain the trust of the consumers. We expect the government to accelerate the same by allocating budgets to ramp up EV architecture that is competent, connected, and sustainable. Moreover, there is an immediate requirement to spread awareness about the auto scrappage policy in order to spur the phasing out of end-of-life vehicles, which can assist steer EV purchases even further.”
Mukesh Taneja, Co founder & CEO, GT Force: ” While multiple regulations for the auto industry are anticipated in the upcoming Budget, the central emphasis should however remain on the evolving electric vehicle space, given its potential to decarbonize India’s transportation industry. As the EV sector may witness yet another volatile supply chain disruption if the key markets experience a downturn, so we highly await calculated EV-friendly policies in Budget 2023 that can aid in maintaining the industry’s ongoing solid growth momentum”
Rajesh Saitya, Co founder & COO, GT Force: “A crucial necessity for EV penetration is to facilitate a vast system of charging points; thus, there is also a massive need to mandate the installation of EV charging points in all existing and upcoming housing estates and commercial properties. Moreover, we are optimistic that the FAME II subsidy will be extended well beyond 2024 in order to maintain consumer demand and accelerate EV implementation beyond metro cities.”
Anmol Bohre, Co-founder & Managing Director of Enigma: “The proliferation of electric vehicles exemplifies their growing popularity, as indicated by previous sales figures and the visibility of the number of EV vehicles on the roads. What’s more encouraging is that electric two-wheelers are paving the way for the greater adoption of electric vehicles in India. Despite being a large market, the government must prioritise research over sales if India is to become a world leader in this technology. Incentives should be allocated for collaborations with universities to advance the R&D of EV technology.
Recent controversies involving the alleged misappropriation of funds under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME) subsidy program, highlight the need for careful consideration of the long-term consequences of such incentives. Therefore it would be beneficial to allocate the FAME subsidies directly to customers’ accounts. As the growth of the EV industry depends on charging infrastructure, designated funds for the development of charging stations along major roads, both national and state is required. In this regard financial provisions to establish solar-powered charging stations in collaboration with the government to achieve zero-emission capabilities for electric vehicles is highly desirable.”
Krishna Veer Singh Co-Founder and CEO, Lissun: “Post-Covid, there is a clear focus on investing in the healthcare infrastructure of India. To achieve scale, it is clear that the digital part of healthcare needs direction and a boost. We hope the government allocates more funds to health tech, enabling a large population to be covered with minimal cost.
Especially on mental health, we are seeing mental health issues rising year over year. But last year, we saw a significant and welcome push by the government with the launch of a national tele-mental health program to provide 24×7 free counselling and care to people. On the insurance side, we also had a significant push to cover mental health diseases by IRDA. However, insurers in India seldom offer policies that cover non-hospitalization treatments or OPD reimbursements. It means that unless mentally ailing patients get hospitalized, they won’t be eligible for coverage. Insurance covers, thus, naturally exclude therapy and psychiatric counselling coverages. IRDA should push for OPD reimbursements for psychology therapy and counselling.”
Nandini Mansinghka, CEO of Mumbai Angels: “India’s startup 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 startup ecosystem. It will be important for the government to revise and rationalise taxes, such as in the case of employee ESOPs. Helping startups 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 labor force. Another key area of focus for the new budget is developing a startup 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 startups that hold an Inter-Ministerial Board Certificate. We urge the government to extend this service to the employees of startups 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 startup 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 startups.”
Apoorva Ranjan Sharma, Cofounder and Managing Director of 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 startup 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 startups. There should be parity for capital gains tax between listed and unlisted securities. The atmosphere for a successful startup ecosystem generating employment must include an easier, single point taxation policy for ESOPs. Further, if Indian startups 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.”
Jitendra Chouksey, Co-founder & CEO of Fittr: “The previous year presented numerous opportunities for entrepreneurs, which catapulted India further to become one of the largest and most successful hubs for entrepreneurship and new-age startups. For the fitness and nutrition sector, we have witnessed technological advancement with new-age tech like AI and ML ruling over the sector to make it more sustainable and customer-reliable. PM Modi’s support towards the Fit India Movement has been huge, and in 2023 we can expect to see Indians continue to become better versions of themselves with fitness as a priority. We believe that this year’s budget will further bolster startups through new policies and norms that will lend support to entrepreneurs.”
Satyajit Mittal, Co-Founder, Aretto: “The Union Budget 2023-24 is expected to focus on supporting the thriving startup ecosystem in India by providing a separate taxation system for startups and helping Indian startups to get listed on international bourses. Additionally, the expectation is that the focus this financial year will be on funding startups with high growth potential through government programs, providing a much-needed boost for the startup industry and driving overall economic growth.”
Brajesh Mishra, Coo, Co-founder, Varthana: “The education sector has been the worst hit and the most neglected sector as far as the COVID impact is concerned. Those schools that have taken loans are still struggling to be on time with their EMIs. Relaxation of the NPA classification norms for the schools, continuing the restructuring under RBI COVID guidelines and emergency credit facilities (ECLGS) will help schools and NBFCs that fund schools a lot. The stress on schools can be expected to reduce only after enrolments increase in the upcoming academic year.”
Nihar Sripad Madkaiker, Co-Founder at iXR Labs: “In line with the trends of the past few years, we would expect the budget allocation to increase and hope it gets closer to the NEP-recommended 6% of GDP. There are two specific areas that the increased budget allocation needs to be made towards, firstly, an increased digital push that education needs, through the implementation of the latest technologies. An important part of this is that some allocation should go towards training programs for educators to ensure they are proficient in the utilization of new technologies. Secondly, an increased focus towards skill development to help improve employability.”
Ankur Shrivastava, Founder & Managing Partner, Momentum Capital: “We hope that the government will consider exempting FDI in unlisted companies from capital gains taxes. Currently, the LTCG tax rate on holdings over 24 months is 10% without indexation on FDI. Abolishing this tax like many developed countries have done, like US & Singapore, would spur further FDI inflows into the country and help support economy builders at the earliest stages.
In addition, we hope the ESOP regime is made more friendly for early employees & tax timing rationalized. Current income tax outlay required when the employees exercise the ESOPs make them unattractive & unaffordable for talent. Delaying the tax ask to when the sale event takes place would enable many more employees to benefit monetarily and help distribute wealth beyond the larger shareholders.”
Abhishek Jain, Fellow & Director, Powering Livelihoods, Council on Energy, Environment and Water (CEEW): “In 2022, the government released a dedicated policy framework to promote Decentralised Renewable Energy applications for livelihoods. We hope that this significant example of pursuing the trifecta of jobs, growth and sustainability, would find fiscal allocations in the upcoming budget to start realising the vision of the policy framework.”
Pratik Kamdar, Co-Founder Neuron Energy: “In recent years, electric vehicles (EVs) have become increasingly popular in India owing to growing eco-consciousness, efforts to reduce dependence on fossil fuels, and rising fuel costs. The Union budget 2023 is expected to be a turning point for the sector. The EV industry is expecting a GST cut from 18% to 5% on lithium-ion battery packs and cells. The Indian electric vehicle (EV) sector, which mainly relies on batteries, would benefit if this transformation were to occur.
Furthermore, to boost the manufacturing and adoption of EVs the sector is counting on the government to promote carbon credits by enacting regulations that encourage businesses to cut their carbon emissions. Firms that emit less than the government-imposed limit can trade or sell the extra credits to companies that must satisfy the limit under a cap-and-trade system. As a result, companies receive financial rewards for spending money on sustainable energy technology and lowering their carbon footprints. Furthermore, the FAME II Subsidy Program has been effective in encouraging EV adoption in India and it’s expected to be extended beyond March 2024. Also, it is expected that the government will implement a PLI scheme for battery pack manufacturers as a means of supporting the EV market and making electric vehicles more affordable and accessible to customers. This will ensure that sufficient capacity will be available to meet the anticipated demand for electric vehicle batteries.”
S Anand, the Chief Executive Officer and Co-Founder of PaySprint: “India boasts a staggering 87% adoption rate of fintech, significantly greater than the global average of 64%. Consequently, the Indian Fintech industry is set on a steep growth trajectory, expected to reach Rs 9.2 billion at a CAGR of 24.96% between 2022 and 2027. Supported by the robust startup ecosystem, the Fintech industry is shaping up to be a solid contributor to the nation’s GDP.
Additionally, the Fintech sector is frontlining the cause of Financial Inclusion in India & the sector expects initiatives that will strengthen the relationship between Fintechs & Banks. This will most certainly encourage continued innovation & help extend the reach of financial services to the unbanked population.
More expected measures that will boost the Fintech landscape are discussed below :
Tax relief for growing Fintech startups:
Fintech startups are hopeful for GST exemptions until a certain level of revenue is achieved. Liberalisation of the tax structure along with depreciation on the fixed assets used by Fintechs, can go a long way in promoting advancement. Announcement of tax benefits for research & development activities would bolster the ideation & execution of differentiating financial products & services for the masses.
Continued push for Digital Payments:
The recent Budgets introduced several incentive schemes to promote digital payments & we expect the momentum to continue in this year’s Budget. The UPI has augmented India’s payments & collections infrastructure and has penetrated the unserved & underserved population in semi-urban & rural regions. New guidelines regarding the UPI transaction cost will be a major development, providing a much-needed impetus to the sector’s expansion.
Tax relief for Fintech startup employees:
A strict qualification criteria accompanied the tax benefits introduced in the previous Budget. It aimed to resolve the dual taxation issue but most startups could not reap the benefits. ESOP holders in Fintech Startups can really gain from tax being levied on the sale of shares rather than on the exercise of ESOP.
Revised regulations for Fintech players & startups:
Conscious revision of the regulations will help establish an enabling environment for Fintechs to function & evolve. We expect to see regulations regarding the digital currencies & how they will take shape in the workings of the industry.
Digitalisation has also given rise to various security threats such as data breaches, data loss, account hacking among others. Enhancement of data security measures is imperative & we expect the upcoming Budget to facilitate the same.”
Dr. Ajay Sharma, Chief Medical Director of Eye-Q Superspecility Hospitals of EyeQ: “People in India are becoming increasingly aware of the enormity of vision loss. This is primarily due to the major initiatives launched by eye-care hospitals to examine and resolve discrepancies. As the growing population ages in India, the burden of eyesight disorders will only shoot up. Many of the most prevalent causes of blindness or moderate-to-severe loss of vision, including cataracts, under-corrected refractive error, glaucoma, and diabetic retinopathy, are preventable if frameworks for early detection and intervention are freely accessible. Worse, the burden of eye diseases and visual impairments is not uniformly distributed: it is often far higher in remote regions, among low-income people, women, senior citizens, individuals with disabilities, minorities, and indigenous populations.”
Rajat Goel Co-founder and CEO, Eye-Q Super speciality Eye Hospitals: “Therefore, to commit to a greater push to make eye care services an essential component of universal health coverage and tackle the skyrocketing impact of vision loss on sustainable development, the union Budget 2023 must come up with new mechanisms and initiatives for large-scale eye screening and testing. Following the Covid-19 pandemic, India is confronted with a mountain of backlog due to a steep decline in the number of eye surgery, particularly in rural areas. So we also anticipate initiatives and government support to assist eye-care chains in clearing the backlog. Moreover, lowering GST and other import taxes should be prioritised in order to make health insurance and eye-care equipment more affordable.”
Dr. Preet Pal Thakur, Co-founder of Glamyo Health: “At Glamyo health, we would expect the honorable finance minister to rationalise tax compliance, especially the aspect of tax withholdings. Furthermore, to encourage Indian start ups getting domestic capital, tax rates for resident investors should be harmonized at par with the Foreign investors. We also expect the government to increase the healthcare outlay to INR 1 Lakh crores.”
Archit Garg, Co-founder of Glamyo Health: “There has been a global rise in the healthcare industry and India is a key player at the forefront. We expect that there will be measures taken to encourage the start ups for the overall growth of the Indian economy. One of the ways is to Incentivise domestic capital to fund Indian startups in their growth phase. We expect harmonising the tax rate for resident investors on unlisted shares in registered startups.”
Mukesh Taneja – Co founder & CEO, GT Force: “While multiple regulations for the auto industry are anticipated in the upcoming Budget, the central emphasis should however remain on the evolving electric vehicle space, given its potential to decarbonize India’s transportation industry. As the EV sector may witness yet another volatile supply chain disruption if the key markets experience a downturn, so we highly await calculated EV-friendly policies in Budget 2023 that can aid in maintaining the industry’s ongoing solid growth momentum.”
Rajesh Saitya – Co founder & COO, GT Force: “A crucial necessity for EV penetration is to facilitate a vast system of charging points; thus, there is also a massive need to mandate the installation of EV charging points in all existing and upcoming housing estates and commercial properties. Moreover, we are optimistic that the FAME II subsidy will be extended well beyond 2024 in order to maintain consumer demand and accelerate EV implementation beyond metro cities.”
Kushang, Co-founder & CEO of SupplyNote: “As a technology start-up in the food and beverage industry, SupplyNote is keenly aware of the challenges facing the sector. From high taxes to complex liquor regulations and difficulties in obtaining permits and licenses, the industry is in dire need of a more streamlined and business-friendly environment. We hope that the Budget 2023 will address these issues by simplifying the tax bracket and easing regulations around liquor, permits and licenses. Additionally, as the food and beverage industry is one of the largest job creators in the country, we look forward to the government creating a positive environment for the sector, including relaxation on taxes for start-ups and the positive induction of private companies in the government ecosystem. We also hope to see the impactful implementation of ONDC, as it will help to digitize and optimize the backend operations of food businesses and increase profitability.”
Harshit Mittal, Co-founder & CTO of SupplyNote: “In the eye of rising costs and reduced margins, we need a budget that supports interest-free loans, allows greater subsidies and reduces tax structure. Another, is the non availability of input tax credit (ITC) that impacts the P&Ls adversely.
We hope the union budget 2023-24 will address these issues to accelerate the growth of the F&B sector.”
Sarvagya Mishra, Co-founder & Director of SuperBot (PinnacleWorks): “Over years, the popularity of Artificial Intelligence (Al) has skyrocketed across industry sectors as a result of the greater push toward automation. While previous budgets acknowledged the relevance of AI technology in modernising India, we now expect prospects and large government initiatives from budget 2023 which can position India as one of the world’s favoured Al leaders. Since we have an AI-powered voice-based product, we are also anticipating announcements and measures to improve digital infrastructure such as high-speed internet and data centres. Moreover, as the founder of the startup, I eagerly look forward to funding and investment opportunities such as venture capital and angel funding to accelerate our business momentum.”
Ankit Ruia, Director & CTO of SuperBot (PinnacleWorks): “In the aftermath of COVID-19, almost every second business migrated online after recognizing the significance of automation. Given the centre’s objective for a digitally robust Bharat, Al technology is one of the major sectors that anticipates the Budget 2023 to unveil AI-friendly policies that can revolutionize India’s tech ecosystem. We are hopeful that easier loan disbursements, electronic authorizations, and incentive programs for startups to use digital finance can advance the growth rate of Indian startups. With AI- technology playing a critical function in shaping the nation’s economy, the Union Budget should also include tax relaxation to spur innovation as well as minimize regulatory burdens to aid in the ease of doing business.”
Gaurav VK Singhvi, Co-Founder, We Founder Circle: “In the upcoming Union Budget 2023, I expect to see a reduction in Capital Gain Tax for unlisted investments to help encourage angel investors and VCs to hold on to their investments for longer, providing more stability for the startup ecosystem.
I also hope the government takes the correct measures to promote entrepreneurship and startup growth and support innovation and technology development. Additionally, I hope to see efforts to improve the ease of doing business in India, such as simplifying regulations and providing access to funding for small businesses. Overall, I believe that a budget that prioritizes these areas would benefit the Indian economy and society.”
Kumar Gaurav, Founder & CEO of Cashaa: “The Budget for 2023 is scheduled to be discussed on 1st Feb 2023, after imposing a 30% fixed tax rate on all income generated through crypto trading in Budget 2022. After having launched the e-rupee, we are expecting that the government would bring in more regulations for cryptocurrencies. Estimations point out that crypto ownership in India is almost double compared to the rest of the world. These being said, the government will more likely introduce a regressive tax for cryptocurrencies.”
Aashay Mishra, Co-founder & COO of PrepInsta: “Budget 2023 is expected to deliver much assistance to EdTech companies in the form of ease of doing business and faster document approval, as well as incentive policies to support innovation and job creation. A strong educational network, we believe, is critical for stimulating the economy and fostering new ideas, technologies, and next-generation businesses. Currently, taxation in India is very high in comparison to other nations, giving investors room for a second thoughts before investing. Therefore, for Ed-tech firms to lure foreign or domestic funding and accelerate business momentum, the government must lower taxes such as dividend tax and capital gains tax to gain investors’ faith to invest in India.”
Atulya Kaushik, Co-founder & CEO of PrepInsta: “India has the highest proportion of generation Z and millennials interested in digital learning to improve their skills and prepare for the technical jobs. Despite Ed-tech’s success post COVID-19 pandemic, India still falls short of technological resources to provide eLearning to aspirants. Over the years we have come to realise how students suffer because of inadequate internet speed and absence of smartphones, particularly in tier 2 and tier 3 cities. Therefore, from the budget 2023, we anticipate government to ramp up connectivity and offer schemes that bridge the accessibility gap for smart devices. Doing so can enhance the skills of aspiring students as education can be managed and customized as per their preferences.”
Manish Agarwal, Co-founder & CMO of PrepInsta: “Since the COVID-19 pandemic’s outbreak, EdTech services have massively lowered the country’s skill gaps by linking the country‘s agrarian populace with digital learning. Without a doubt, the government has confined funding to develop high-quality educational infrastructure in outlying areas, but with the adoption of smart tools and hybrid learning models, we can conquer the large percentage of areas where modern education is still missing. Therefore, loan and finance practises must be simplified for Ed- tech startups, which also serve as a driving force in the Indian economy by retaining India’s brilliant minds.”
Arunabh Sinha, Founder of UClean: “A hefty 18% GST on a daily essential activity like laundry is unreasonable.The majority of the business comes from the unorganised sector, which comprises local Dhobis, ironing shops, and micro laundry establishments serving a limited locality, accounting for 96% of the total. Just like any other daily necessity like dairy, laundry and dry cleaning falls under the same bracket of necessity as triggered by the pandemic hygiene is everyone’s right rather than a luxury activity so that’s why it should attract a rate of 5% instead of an exorbitant GST rate. As the sector has already been battling with sizable losses brought on by the pandemic this sector needs further support of tax deduction. In order to lessen the burden on households, the tax system needs to be modified and extra effort must be made because the laundry or dry cleaning market sector has always been overlooked in the budget”