Budget 2023-24: Why the proposals could be most challenging for the government

The Union Budget 2023-24 presented by Finance Minister Nirmala Sitharaman would be one of the most challenging Budgets for the Government. Considering the global recession, the world is staring at, this Budget would be a roadmap for sustaining India’s growth momentum. The Budget plays a significant role for the common man as well as big corporates which expect reliefs and reforms that would benefit them, and this year’s Budget has largely delivered the same.

Tax relief for salaried class

One of the most awaited and yet pleasantly surprising announcements from the Union Budget 2023-24 was the increase in the rebate limit for income tax payments from Rs 5 to 7 Lakhs, which would be facilitated under the new tax regime. This brings a big relief to the salaried class as they will now have more disposable income to spend

Increasing capex

Capital Expenditure (CAPEX) forms an important segment of the Union Budget as the funds as utilized for buildings, machinery, equipment, school, and infrastructure, which play a crucial role in nation-building. The finance minister has raised capex target by 33 percent to Rs 10 lakh crores. This substantial increase in the capex has been core to the government’s effort to focus on the growth potential and to create more job opportunities for the youth of the nation. This will also create enormous opportunities for private investors to invest in India Inc.

Fund to create urban infrastructure

The government also announced a continuation of a 50-year interest-free loan to state governments to incentivise infrastructure investment.  Interestingly, there was an announcement for the establishment of an Urban Infrastructure Development Fund (UIDF) for creating urban infrastructure in tier 2-3 cities.

Infra development for 5G in India

With the advent of 5G in India, the network will play a crucial role in creating a strong infrastructure development in these tier 2-3 cities. Investment in network diversification through fibres will play a crucial role in strengthening the connectivity with the cities. At least 70 percent of the towers need to be fiberised for optimum utilisation of 5G services, which will require an estimated investment of Rs 5 lakh crores in the next 4 years in terms of fibre and towers. The state-run BSNL is expected to roll out 4G and 5G services this year, and will also get Rs. 52,937 crore capital infusion from the Government in 2023-24.

The Budget has also allocated Rs 2158 crores for an optical fibre cables-based network for Defence services and Rs 715.8 crores for telecom projects in northeastern states. The 5G revolution is expected to create new growth channels and productivity of industries in India by many folds. It will also be crucial in smart manufacturing and industrial automation positively impacting the overall supply chain which will have a direct impact on the overall end consumer.

Improving ease of doing business

The government has always encouraged improving the ease of business. This year, various schemes including revamped credit guarantee schemes to support MSMEs, with an outlay of Rs 9000 crores to be launched. This will enable collateral for Rs 2 lakh crores loan to MSMEs. This will be a much-needed booster for the distressed and fund-starved MSME sector. Banks are also expected to relax the stringent collateral norms, for the MSMEs. To support the MSMEs in timely receipt of payments, the budget also allows a deduction for expenditure incurred on payments made, only when the payment is done.

In conclusion, the Budget aims to strengthen the country’s economy, telecommunication, and infrastructure sector. It aims to create new job opportunities and improve the quality of life for citizens. The budget’s focus on the agriculture, education, and health sectors, as well as its proposals for boosting employment and attracting foreign investment, are expected to have a positive impact on the country’s overall development.

The writer is CFO, Finolex Cables Ltd. He tweets @FinolexCables. Views expressed are personal.

Read all the  Latest News ,  Trending News ,  Cricket News ,  Bollywood News , India News  and  Entertainment News  here. Follow us on  Facebook ,  Twitter  and  Instagram .