On the eve of Union Budget 2023 announcement by Finance Minister Nirmala Sitharaman, we at DeviceNext share with you the budget expectations from leaders across the industries.
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Mandeep Arora, MD & Co-founder, UBON
While observing the rapid growth of electronic manufacturing in the country, Mr. Mandeep Arora, MD & Co-founder, UBON said, Last year, there was an increase in electronics prices, especially smartphones, owing to the chip shortage and other COVID-19-induced factors. With duty concessions and domestic manufacturing boost, the prices of electronics slowly decreased and eventually helped boost the demand. This year, the government is expected to make significant progress toward making India a center for producing and exporting electrical devices. Incentify the export of consumer electronics products and a low GST percentage will motivate many Indian consumer electronics manufacturers.
MSMEs play a significant role in the Indian economy – whether it is employment generation or revenue contribution. MSMEs or SMBs requires financial support for setting up and upgradation of the industrial areas. Developing or allocating new industrial zones and improving old infrastructure will motivate MSMEs or SMBs to give a greater output. This will create more employment opportunities and empower our nation with a more skilled workforce.
The Indian manufacturing industry has emerged as a significant contributor to the nation’s GDP, and it is imperative that the government should introduce tax parities amongst different sectors. Introducing a corporate tax bracket of approximately 15% could aid the service industry to grow and perform beyond expectations. Investments under Section 80C, with the current limit of Rs. 1,50,000 needs revision. This could allow taxpayers to improve upon their savings while affecting a significant increase in purchasing power. Further, ESOP holders in Indian startups could gain from the tax being levied on the sale of shares rather than on the exercise of ESOP, which is not the liquidity event for employees of unlisted companies. Thus, if these expectations are addressed and adequately tackled through implementation, it could help the country’s economy grow further.
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Vidit Aatrey, Founder & CEO –Meesho
Budget 2023 gives our visionary government an opportunity to put our MSMEs in the fast lane, building on its proactive efforts to transform the small business economy. First, the government can bolster working capital for e-commerce suppliers by lowering GST on input services like logistics and facilitating refunds of accumulated input tax credit. Over April-November 2022, ~2.9 lakh sellers on Meesho dealing in products that attract <18% GST saw input tax credit accumulation of Rs 265 crore.
Second, expediting the implementation of GST relaxation norms for small online businesses will allow millions of them to realize their full potential.
Further, with the National Logistics Policy bringing down costs for the ecosystem and strengthening distribution networks, the government could leverage the unmatched reach of India Post and Indian Railways to help our MSMEs meet rising e-commerce demand from small towns and villages in a fast and reliable manner, thereby boosting their competitiveness.
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Rahul Jain, Director, Crayon Motors
“Even when the EV sales have doubled in the last year, the industry still suffers from higher initial ownership costs of EVs, which is a direct result of higher input costs. We hope the upcoming budget will reduce GST on raw materials/components, thereby accelerating India’s EV race. Because battery manufacturing in India relies heavily on imports, some duty relief could help reduce overall costs. EVs have fewer financing options and higher interest rates than ICE vehicles. The EV industry is hoping for a positive outcome from the government’s meeting with the World Bank. Aside from the PLI expansion, other state government programs such as GEDA and central government initiatives such as “Atmanirbhar Bharat” would undoubtedly benefit.”
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Raj Mehta, Founder, Greta Electric Scooters
“EV has been a sunrise industry. Thanks to the Government initiatives both at the central & state level and the policymakers, the segment has experienced exponential growth. But as players in this market, as always, dil mange more, as we have miles to go before we sleep i.e. achieve the zero-emission target by 2070. Some asks that come to my mind that will help the manufacturer offer better value to the customer is a reduction in GST on components. Currently, at 28%, as against 5% of the end product adds to the manufacturer’s capital cost. The extension of FAME -2 is a welcome move. A little tweaking will get more people to benefit from the scheme. PLI has seen good traction, but the focus must shift to indigenising component manufacturing for EV vehicles. On the financing end, support is needed for end customers through easy loans and financing options and for manufacturers via financing subsidies.”
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Anshul Gupta, Managing Director, Okaya Electric Vehicles
“As the country looks towards Budget 2023, we trust that the electric vehicle sector has the potential to play a major role in driving economic growth and development. We are expecting the *policy makers* to take steps to make EVs more affordable and accessible to the public, such as by lowering GST rates on EV spare parts and reducing input GST on EV OEMs. We also hope that the government will continue to extend support for the development of the EV sector. We believe that these measures will help *to* drive the widespread adoption of this clean and sustainable mode of transportation.”
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Vineet Nayar, Founder, and Chairman, Sampark Foundation
The cascading effects of covid can be seen in significant drop in learning levels but an increase in enrolment in government schools. Unless we substantially increase allocation to education in the upcoming budget we will see this negative trend continue. Education builds the future of our country and we need 30% increase in number of teachers and their capabilities to teach in the right way. If we miss this opportunity we would have millions of children who will miss benefiting from the focus on foundational numeracy and literacy skills and next year will be too late.
The challenge of balancing the budget is huge and I hope government sets the right priorities for the future of the children of this country. Today not only the allocation to education is much lower than what it needs to be, but a substantial part of that budget also goes into teachers doing non-teaching activities . Thus, what actually reaches the classroom is much lower than what is allocated in the budget. I hope we will not just have a substantial increase in education budget this year to fulfil the FLN mission but also draw a red line on using teaching time for non-academic activities, investing in frugal ideas instead of expensive technology solutions that are easy to buy but difficult to use and investment in increasing number of teachers at the cost of everything else because technology is not a replacement of teachers.
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Lalit Arora, Co-founder, VingaJoy
“Considering that the manufacturing sector is a significant contributor in supporting employment and economic growth, amplifying its growth has long been on the agenda of the Indian government. Budget 2022-2023 Consumer electronics manufacturers were left disappointed as there was no concession or GST rationalisation given on products. From the Union Budget 2023-2024 we expect reforms in the Budget that would accelerate growth channelised by consumer demand.
Given that hearable devices are a new rage, it is high time that hearables are also incentivized under consumer device categories. As of now, hearables don’t get augmented by any specific government encouragement policy or subsidy. Also encouraging R&D/Designing in India & Promoting new supply methods: The government can acknowledge and encourage manufacturers by providing subsidies to Completely Knocked Down (CKD) and Semi Knock Down (SKD) production. It increases the probability of getting better returns and extends companies’ footprint in mature markets.
We are also expecting additional tax benefits and lower tax rates & extending the scope of employee stock ownership plan (ESOP) taxation reforms to startups. This year the Indian economy is on the road to recovery and the Union Budget 2023-2024 will be crucial for the Consumer Electronics sector as it can facilitate the industry’s effective revival. The manufacturing giants, MSMEs, and SMEs alike are looking forward to the upcoming Budget 2022 which can effectively give a flight to their growth path”.
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Karan Baweja, Founder and CEO, upsurge
One of the main priorities for founders is access to funding and investment. The budget could continue supporting government-backed seed funds and incubators, and introduce tax incentives for private investors to support startups as well. Current tax laws are archaic and are causing an outflow of capital from the country.
Another important area for startup founders is regulatory reform. This includes measures to simplify and streamline the process of setting up and running a business in India, as well as reducing red tape and bureaucracy.
Taxation is also an important consideration for startup founders, particularly in terms of the rudimentary taxes on employee stock options and angel investments.
In addition to these financial concerns, many startup founders are also looking for measures to support the growth and development of the Indian startup ecosystem as a whole, such as support for networking and mentoring programs, and initiatives to promote innovation and entrepreneurship.
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