Budget 2023: ‘Decrease in income taxes will help the nation keep its top personnel’

Finance Minister Nirmala Sitharaman's announcement of the Union Budget 2023 on February 1 is anticipated to attract significant investment for the expansion of the industrial and information technology sectors. Technology will change for the better as a result of the explosive growth of new-age technologies like 5G and AI. The government's emphasis on "Digital India" has propelled economic growth in India and given the country a competitive advantage in the global technology market. To boost the economy, the government is anticipated to expand investment in the technology industry. Despite the fact that the year 2022 recorded slow growth due to layoffs, funding cut-offs etc, the IT and tech industry is predicted to increase significantly this year.

In 2023, Gartner Inc. projects that India's IT spending will increase 2.6%. Both the domestic and global markets will see development in the technology sector. Retail, automation, robotics, e-commerce, artificial intelligence, 5G, manufacturing, and so forth are some of the industries that will reach their peak this year. Based on important demands and trends the following are some industry predictions for the upcoming Union Budget: 

Sangeet Kumar, Co-founder & CEO, Addverb Technologies: ‘New India will not remain a mere consumer of technology but will play an active role in developing and implementing that technology,’ said PM Modi. Unprecedented growth has been witnessed across industries, especially in terms of emerging technologies like AI, ML, IoT, robotics and most importantly 5G. According to a recent report by Gartner, the Indian information Technology Industry is expected to grow at rate of 2.6% in 2023.

In order to stay competitive in the global market, the government is anticipated to expand investments in digital and automation technologies. Additionally, a decrease in income taxes will help the nation keep its top personnel. To provide more advanced and innovative solutions for bringing in sustainable business models, startup and technology investments would be prioritised.

Gautam Kumar, COO & Co-founder, FarEye: With the National Logistics Policy and the ULIP platform announced in 2022, a clear path to transformation and growth in the logistics industry has been paved by the government. 

In the 2023 Budget, the logistics industry expects the government to take measures to expedite the integration and development of ULIP which will unify digital logistics systems and enhance efficiency, transparency, and collaboration between various industry stakeholders. The government must look at incentivising logistics players that want to adopt artificial intelligence, the Internet of Things, automation, and big data.

We expect the government to give infrastructure projects like cold storage, logistics parks, and Dedicated Freight Corridors an adequate financial push toward faster completion. DFCs in particular will boost the speed of freight movement in the country and bring down logistics costs.

ONDC is also an important step towards the democratisation of e-commerce in the country. To achieve a level playing field for micro, small and medium enterprises (MSMEs) and small traders, the integration of logistics players into ONDC will be critical for deliveries ordered through the network. The government does have big plans of achieving gross merchandise value (GMV) of $48 Bn in the next two years with ONDC. However, for this to happen, the government must look to onboard more logistics service providers, buyers, and sellers in the network and ensure that more cities across the country are brought into the fold.

Mathew Joseph, COO & Co-founder, FreshToHome: India is the third-largest fish-producing country in the world with a production of 9.6 million MT. The fisheries and seafood industry accounts for 7.96% of the total fish production across the globe. More than 20 million fishermen and fish farmers primarily depend on this sector for a livelihood. However, a lack of basic infrastructure and sustained efforts to revive the sector has hindered its growth, and exports have been the worst hit. Some of the key challenges faced by the industry are:

Lack of fund allocation for the development of the sector

Lack of robust infrastructure solutions for efficient use of resources

Inadequate efforts to revive aquaculture

Lack of modern amenities in wet markets

Lack of access to modern equipment and tools to fish farmers

Recommendations:

1.    Promote aquaculture

The budget should make allocations to promote aquaculture. Today, aquaculture in India is being practiced in traditional methods, and hence, there is a limited production of products like Shrimp and Baasa, although there is huge demand for these varieties of fish in the global markets. India exports about Rs 45,000 crore worth of fish and fish products annually and about 60% of this revenue comes from shrimp alone. However, about 90% of the shrimp production in India takes place in just 2 states - Andhra Pradesh and Orissa. Despite the availability of land and resources, we are unable to increase shrimp production in other states. There must be budget allocations to set up modern aquaculture practices across the country.   

2.    Budget allocation to build modern infrastructure solutions in wet markets

The budget should make allocations to build cold chain facilities in wet markets to reduce wastage. Setting up of chillers, freezers, and facilities to store fish in organic methods in wet markets will reduce the burden on the fishermen community. This will directly yield larger profits to the fishermen. This is an urgent need of the community and is fundamental to the growth of the industry.

3.    Efforts towards waste reduction

Of the total production of fish in India, only about 70% of the yield is consumed and the rest is considered as wastage. Due to lack of infrastructure and last mile connectivity concerns, about 30% of the yield is wasted even before it reaches the customer. We must build robust infrastructure facilities to ensure the waste reduction percentage is reduced. 

4.    Allocate natural resources for fish farming

Many countries have reserved rivers, lakes, seas and all natural resources for aquaculture. Such areas are restricted from tourism and are exclusively dedicated to practicing aquaculture. Adopting such practices here in India will give a big leap to the aquaculture practice in India. Fishermen must be given licenses to practice marine aquaculture in natural resources like seas. With the use of technology, these practices will be beneficial for fish exports.

5.    Thrust upon exports of pan-ready fish and fish products

Countries like China make use of Tilapia fish parts like skin, head, and eyes that are often considered waste in India due to lack of factories that can convert these wastes into products. Although states like Maharashtra and Gujarat are using these parts and exporting, the quantity is minimal. Fund allocation is necessary to build factories that will further generate revenue from these products. 

6.    Orientation programs and training workshops to increase awareness in fish farmers to compete in global markets

The fishermen community in India is primarily dependent on traditional methods to practice farming. Through workshops on right practices, making efficient use of available resources and training programmes, the government can uplift the community."

Shauraya Bhutani, Co-Founder of Capital Connect Advisors and Founder and Partner at Breathe Capital: In the upcoming budget, Private equity and venture capital firms are looking for an equalization of long-term capital gains (LTCG) tax for unlisted shares and public stock investments. The industry's request to the government is to bring parity between the two asset classes, which will result in an increase in private market investments, assisting startups, particularly during the current funding winter. At the moment, the LTCG tax on unlisted stock held for more than 2 years (24 months) is double that of listed equity shares owned for a year. The LTCG tax on public stock investments is 10 per cent, while the tax on private stock investments is 20 per cent. This will bring about a much-needed change in the industry and will boost private market investments in the country.