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The budget for the year 2023-24 will be presented in the Parliament by Finance Minister Nirmala Sitharaman in a few days from now. Everyone's eyes are stuck on this year's budget and people have a lot of expectations from it.
Prime Minister Narendra Modi has set the biggest target for the country so far. The Prime Minister (PM) has said that by 2047, when the country will be celebrating 100 years of Independence, it would become a developed nation, erasing the tag of a developing country. This resolution appears to be difficult but not impossible.
According to experts, this year's budget is anticipated to be a far-reaching development project to meet the target set by the PM for 2047. The central government is keenly working on it, and it is aware of the fact that the path to 2047 goes through the budget 2023-24 since the budget will set the plot for the general elections scheduled for next year.
Speculations are rife that this year's budget will have special provisions for climate change issues. The world is making efforts to deal with climate change and India has a very important role to play. Since the country is on the verge of becoming the most populated country in the world, the responsibility to promote the use of renewable energy is twofold.
Apart from this, sectors such as information and technology (IT), tourism including medical tourism, pharmaceuticals, gem and jewellery industry along with suitable tax implementation are considered to be the keys to the path of progress and the government is expected to pay special attention to the same.
Renewable energy industry:
Yogesh Mudras, Managing Director, of Informa Markets in India said, With pressure on countries for climate action and India's climate commitments of COP26 and COP27, it has been ramping up its efforts towards a greener and more sustainable economy.
Industry experts are hoping to reap maximum benefits with the expectation of some tweaks in the tax implications in the upcoming budget. India has taken a Net Zero Pledge by 2070; therefore, it becomes important to have incentives to promote renewable energy, 2G ethanol, and flex-fuel hybrid vehicles and to create an Indian market for decarbonisation, added Yogesh.
The government has already approved an outlay of Rs. 19,744 Crores towards the National Green Hydrogen Mission, but to ensure access to low-cost capital for Renewable Energy, Battery Energy Storage Systems and Green Hydrogen project development, the budget 2023 should take measures in line with other Re-focused regions and economies across the globe.
The Industry is further looking at the inclusion of petroleum products in GST to reduce costs and offer incentives to OEMs and tax benefits to ESG Bond issuances. Another expectation from the Union Budget 2023-24 is the inclusion of the Power sector, Railway or Airport redevelopment under Section 35AD as a specified business, wherein specific businesses can claim a tax deduction on their capital expenditure.”
Travel and Tourism Industry:
Yogesh Mudras further said, "The Travel industry is looking forward to a well-thought-out and progressive Union Budget 2023-24, which would help pull the industry out of the morass that they find themselves in due to the unprecedented occurrences over the last few years. The industry expects the Government to recognise the sector with an ‘industry status’, which would help bring in some good measures to support and boost the growth of the industry. Travel and tourism create 12% of new jobs in the country per year; keeping this in mind, a multiplier effect would positively impact the nation’s economy.”
India needs tourism, and the tourism sector needs the much-needed push to recover from its debilitating blow during the Covid-19 pandemic. Tourists find everything they need in India because of India’s geographical and ethnic diversity, richness, heritage and diverse cultures and traditions. Be it a well-heeled or a budget-oriented traveller, India has it all.
Mudras said, "India also holds an advantage as a medical tourism destination with its high-class but affordable medical and health services. However, the tourism infrastructure in India is a challenge to the growth of the sector. With a lack of adequate tourism infrastructure, be it quality and network of roads, rail or air connectivity and other basic facilities for tourists, we still have a long way to go. In the upcoming budget, we expect the government to simplify and streamline the regulatory policies to further encourage and boost the sector.”
Gem and Jewellery Industry:
Informa Markets in India, MD said, India’s Gem and Jewellery market size is expected to touch USD 85 billion by the end of FY23, with the growth in exports successfully crossing 55% in the last two successive years. The Government is aiming at over USD 75 billion per year in jewellery exports by 2025.
For this, there is the need to undertake various measures to promote investment and upgrade technology and skills to promote India in the international market, which has already begun.
The Government has already permitted 100% FDI in the sector under the automatic route, which does not require approvals for the foreign investor and has signed a Comprehensive Economic Partnership Agreement (CEPA) with the UAE to boost exports further.
The Gold and Diamond trade will contribute more than 8% to the GDP, and the sector is likely to employ more than 9 million people by 2023. The industry expectations from the Union Budget 2023 are to announce measures like the abolition of import duties on raw materials. Industry stakeholders are also expecting some relief in gold import duties to help create an equitable competitive environment for the regular and grey markets, with a reduction in custom duty on Gold and Silver by about 4%. There is also the need to reduce customs duty on Gold ore imports which should be at least 1.5% lower than refined gold bars, along with the abolishment of agriculture infrastructure development cess (AIDC) by about 2.5% on Gold customs duty.