Budget 2023 - Vision for Amrit Kaal

Our Hon’ble finance minister’s fifth straight Budget 2023 comes at a time when the economy is slowing, and there’s a need for increased spending on social sectors and also for ramping up incentives for local manufacturing. The government has focused on a slew of measures that helped expand capital expenditure (CapEX)) spending and has tied in priorities including Green Growth. The budget also saw some major tax announcements for the salaried class of citizens, with changes in tax slabs and a clear intention to shift to a new tax regime.??

The finance minister has called it the ‘First Budget in Amrit Kaal’ (an era to leap forward.) The vision for Amrit Kaal is adequate opportunities for citizens with a special focus on the youth, growth in job creation and a stable Macro-Economic Environment.?

The budget echoes the government’s focus on transforming India into a leading digital force globally. The budget held a sizeable space for artificial intelligence by announcing the establishment of three ‘Centres of Excellence’ for AI. With ease of doing business being the central focus and technology being the core enabler, introduction of Entity Digi Lockers, setting up of Central Data Processing Centre and rolling out of next-generation Common IT Returns will further strengthen the Digital India Initiative of the government.??

Acknowledging the importance of start-ups, the new budget has introduced a few advantageous opportunities for start-ups. The date of incorporation for start-ups to avail tax benefits has been extended by a year (until March 31st, 2024). Tax incentives will be applicable for start-ups in the first 10 years of incorporation, up from the earlier time. Unfortunately, these measures will be applicable to only 1% of the start-ups registered in India.?

Transport infrastructure and logistics appear to have taken centre stage with this budget. The focus on PM Gati Shakti to speedily deliver infrastructure projects is renewing the emphasis on on-ground delivery to ensure that planned benefits of projects are realised quickly and substantially. Data will be exchanged through ULIP to ensure efficient movement of goods, reduce logistics cost and time, eliminate tedious documentation and provide real-time information.?

There was more scope of benefits for salaries employees on taxability of ESOP’s, given the taxing provision of payment of taxes on exercise of ESOP’s for private limited companies in the absence of liquidity. Further, the Finance Bill 2023, has proposed amendments to Section 56(2)(viib) of the Income Tax Act, which could partially affect start-ups.?

While meeting all expectations is not possible, overall, it is a balanced and achievable budget. If the government continues its stellar execution and its focus on the ease of conducting business, I sincerely believe that India will continue to receive investor interest as a ray of hope in slowing global economy for the next several years!?