Budget reaction 2023-24

By Amit Gossain, Co-Chair, National Committee on Real Estate & Housing- CII, Managing Director, KONE Elevators India

a. Overall Feedback on the Budget 
Union Budget 2023-24 is progressive, especially with its emphasis on developing the country’s infrastructure. With the world’s GDP expected to slow down to 2.7% in 2023 by dint of the global recession, it’s encouraging to note that India’s FY23 growth is estimated between 6-6.8%, maintaining its tag of being the fastest growing economy in the world.

The government’s resolute focus on infrastructure and sustainability will drive real estate growth this year. For the real estate sector, the allocation of Rs 79,000 crore for the Pradhan Mantri Awas Yojana (PMAY), enhancing it by 66%, came as positive news. This will aid as a further lift to the government’s program to provide housing to the urban poor. From unity malls to roads and highways to affordable houses – the budget is counting on strengthening domestic demand and public investments to boost growth. As a well-thought and futuristic measure, 50 additional airports, heliports, water aerodromes, and advanced landing grounds will be revived to improve regional air connectivity in the country.

b. Key Positives:
This has been an inclusive budget, and I congratulate the FM on presenting a new option for Savings, in honor of women. Today’s budget reflected how ‘Nari Shakti’ can build an empowered nation, resulting in inclusive growth. Also, the income tax returns processing period has been reduced by 16 days.

The Budget takes the lead once again to ramp up the virtuous cycle of investment and job creation. Notably, the Budget 2023-24 has increased Capital Investment layout by 3.3% of India’s total GDP, to 10 lakh crores. This will help generate wealth creation opportunities for Indians across the income spectrum, thus increasing the chances for asset management funds in India.

Continuation of the 50-year interest-free loan to state governments for one more year to spur investment in infrastructure and to incentivise them for complementary policy actions, with a significantly enhanced outlay of Rs 1.3 lakh crore is a positive move.

This is a middle-class windfall budget. The government has enhanced the income tax exemption limit up to Rs 7 lakh under the new tax regime. More money in the hands of middle-income individuals (who constitute the bulk of India’s population) will have a multiplier effect by boosting consumer demand which in turn would boost economic growth in other sectors (the tax relaxations would increase the disposable income for the middle class)

Sustainability secured a great focus in the budget with viability gap funding for battery storage, renewable energy evacuation, green credit policy and incentives for further growth as strong initiatives to support green growth and achieve net zero mission by 2070.

The Union Budget 2024 opens the way for yet another year of the government using infrastructure-capex to support the economy. This is enhanced by the government’s emphasis on green capex transition support. Capex support from the budget rises to 4.5% of GDP for the next fiscal from sub-4% this fiscal.

The announcement of 157 new nursing colleges will improve the nurse-patient ratio, a step in the direction for Universal Health Coverage.
Significant emphasis on technology & digitalisation – focus on R&D spending, agriculture-focused digital public infrastructure, tapping 5G capabilities for various sectors, extending the “Make in India” push to Artificial Intelligence (AI), extending the scope of DigiLocker, incentives for greater adoption of EVs and drones
To further enhance the ease of doing business in the country, the Union Budget 2023-24 highlighted that more than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalised.

c. Negative(s):
It’s time that the government brings uniform guidelines across the country for the safety norms to be followed by the elevators and escalators manufacturers, for increased safety across infra and real estate projects.
Expenditure towards CSR may be treated as a tax-deductible expenditure. Since the profit from which CSR expenditure is required to be spent is a “business profit”, the CSR expenditure may be treated as a business expenditure incurred for earning the profit and hence tax deduction be allowed.

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