Bahubali Budget, more money with middle class: Experts on Budget 2023-24

The Union Budget of 2023 announced by finance minister Nirmala Sitharaman was hailed by most market watchers and heads of consultancy firms – as they cheered the change in income tax limits and the capital expenditure outlay, among others. Here are the top reactions of experts across industries: The sharp increase in capital spending combined with a focus on reining in the fiscal deficit, will not only spur infrastructure development and job creation for our country's youth, but do so responsibly. Reduced compliance red tape and loosened regulations promise to further fuel our nation's start-up culture. I agree with the Finance Minister that India will be in a unique position to improve its standing in the global economic system while leading the G-20, said Nadir Godrej, Chairman and MD of Godrej Industries Ltd.“The Agriculture Accelerator Fund is a welcome and innovative step by the Indian government, which will help accelerate the development of new technologies and innovative solutions addressing India’s specific agricultural issues ranging from supply chain to credit availability & inclusion ”, said Parijat Jain, Partner at Bain & Company. The finance minister in the Budget 2023 announced the highest ever proposed capex of ₹10 lakh crore in FY24 (3.3% of GDP); this push for infrastructure development will have a cascading impact on industrial sectors including Electrical & Electronics, Automotive, Industrial Machines, Pharma, Chemicals, Textiles and Apparels. This would further propel employment and assist in manufacturing taking center stage in the Indian economy , said Sushil Pasricha, Partner at Bain & Company. “This budget is a Bahubali budget. With one arrow multiple targets are shot. Fiscal prudence is achieved with lower deficit and path set till FY26. Consumption is supported through tax cuts. Investment outlay is enhanced,” Nilesh Shah, MD, Kotak AMC said. “More money in the hands of the middle class will have a cascading effect across the economy. The focus on use of AI, emerging technology, social entrepreneurship and research and development (R&D) will empower the youth,” said Sanjeev Krishan, chairperson, PwC in India. “Although changes to the tax regime will forego some tax revenue, the budget predicts largely buoyant revenue on the back of strong nominal GDP growth and gains from tax administration. The budget’s continued emphasis on capital expenditure suggests an ongoing improvement in the quality of spending,” said Christian de Guzman, Sr VP, Moody’s Investors Service.With a razor sharp focus on boosting infrastructure, employment creation, startup economy, and increased capex, government has ensured that the country is firmly on its path to becoming one of the world’s leading economies. The tax rebates, notably, will ensure more money in the hands of consumers, and we expect a boost in demand generation going forward. Overall, I think that the budget has the potential to revive the demand and propel long-term economic growth, said Mr. Saugata Gupta, MD & CEO, Marico Limited.The Budget has unleashed the forces of growth in the country while continuing to support India's middle-class in improving their prospects and realise dreams of a better life. The government has not only focused on creative, productive capital expenditure and growing our infrastructure. But, it also puts money in the hands of the hardworking Indian consumer, said Abhishek Lodha, Realtor Lodha Group's Managing Director & CEO. “No change around capital gains is a positive as markets were factoring in a small percentage chance of this detrimentally affecting capital markets. Overall capex number is positive and is better than expected. No reduction in STT (securities transaction tax) is a negative, a reduction will go a long way in helping retail investors and traders who provide much needed liquidity be profitable. The issue still remains that 7 crore people file tax and 1 crore people pay tax, India has 140 crore people, this can't be right, we need increased plugs to curtail tax evasion,” said Nikhil Kamath, co-founder of Zerodha. “Allocation to affordable housing of ₹79,000 crores, an increase of 66%, will also help the housing market retain momentum. Incentives for local production in the form of lower duties will also be helpful. Overall, this budget push on capex will ensure that the private capex greenshoots really sustain, help inclusive growth and make the economy become more resilient in light of the global slowdown,” said Chirag Mehta, CIO, Quantum AMC. “The budget has ensured that the fiscal impulse is maximised to improve potential growth. Capex spend has picked up significantly to 3.3% of GDP and is almost double of pre-pandemic prints. This especially implies larger fiscal multiplier on employment and growth and will support crowding in of still-lacking private capex,” Madhavi Arora, lead economist, Emkay Global Financial Services said.“The budget pays heed to the need for fiscal consolidation reducing its fiscal deficit target to 5.9% of GDP in 2023-24 from 6.4% in 2022-23. The resultant lower-than- expected market borrowing number is likely to bring some relief for the bond market. We see the 10-year bond yield to moderate towards 7-7.1% in FY24,” Abheek Barua, chief economist and executive VP, HDFC Bank said. “The Government continues to focus on the use of technology in order to bring in Minimum Government and Maximum Governance. The announcement to set up three centres of excellence for artificial intelligence to enable 'Make AI for India' and 'Make AI work for India' will further help India in its growth trajectory with able use of technology,” said Gunjan Prabhakaran, partner and leader - Indirect Tax, BDO India.

Bahubali Budget, more money with middle class: Experts on Budget 2023-24

Bahubali Budget, more money with middle class: Experts on Budget 2023-24

Reduced red tape

Welcoming Agriculture Accelerator Fund

'Highest ever proposed capex of ₹10 lakh crore'

’Bahubali budget’

‘More money in hands of middle class’

‘Improved quality of spending’

'Expect a boost in demand'

'Unleashed the forces of growth'

‘We need increased plugs to curtail tax evasion’

Sustaining private capex greenshoots

‘Capex almost double of pre-pandemic prints’

Relief for bond market

‘Minimum Government and Maximum Governance’

​Bahubali Budget, more money with middle class: Experts on Budget 2023-24