In Union Budget 2023–24, the government has set the stage for India to take the next leap on the economic development front. As the first budget of Amrit Kaal, the government navigates the tightrope of balancing economic growth and addressing deficit fiscal concerns. Indian economy’s growth at 7% is the highest among major economies, a testament to the significant progress made across various sectors. The budget captures the goals of the government’s long-term blueprint for India@100 with continued emphasis on key areas such as inclusive development, reaching the last mile, infrastructure, green growth, and the booming financial sector. Realising the importance of financial impetus, the overall CapEx outlay has been increased by 33% to Rs. 10 Lakhs Crore and will make up 3.3% of the GDP.
The announcement to extend the government digital certificate depository Digilocker services is a boost for the FinTech sector. This will enable FinTechs to store and share their documents such as financial statements and IT returns. The move to create a one-stop solution for the reconciliation of IDs using Digilocker service and Aadhaar as a foundational identity along with using the PAN as a common business identifier will further enhance the ease of doing business. The KYC process will also be simplified by taking a risk-based approach. These are promising initiatives that will help aspiring FinTechs and the overall startup ecosystem to grow.
We also look forward to the comprehensive review of existing banking regulations which we hope are in line with strengthening the digital infrastructure and making FinTech innovation a key focus, both from an infrastructure and framework viewpoint.
We applaud the government’s decision to further the credit guarantee scheme support to the MSMEs. By infusing Rs. 9,000 Crore into the corpus, the revamped credit guarantee scheme for MSMEs will help the cash-strapped sector to tide over challenging times. The measures to lower the cost of credit by 1% and enable an additional collateral-free credit guarantee of Rs. 2 Lakh Crore, will be a tremendous stimulus to this sector. The budget also proposed to set up the National Financial Information Registry in a bid to facilitate the efficient flow of credit and strengthen the financial stability of MSMEs. Additionally, as part of Vivad Se Vishwas, if MSMEs fail to execute their contract, 95% of performance security will be returned to small businesses—this will help in building a formidable MSME sector.
With the plan to establish 30 skill India international centres in different states, the government has also prioritised skills development and job creation. The initiative to further reduce 39,000 compliances will promote the ease of doing business. The decision by the government to increase the tax rebate to Rs 7 Lakh under the new tax regime and enhance the grievance redressal mechanism for direct taxpayers are welcomed moves. The proposal to introduce next-gen IT forms and the extension of tax benefits will further strengthen the business ecosystem of the country. The growth-oriented budget also announced the reduction of the basic customs duty rates on goods other than textile and agriculture from 21% to 13%. We also appreciate the government’s move to set up an agriculture accelerator fund for promoting agri-startups.
To galvanise an effective AI ecosystem, the Finance Minister has announced that the government will create three centres of excellence for AI. The laser-sharp focus on digital technologies like AI, and Machine Learning will be a big step towards promoting financial inclusion in India.
Overall, the Union Budget tabled by the Honourable Finance Minister, Nirmala Sitaraman is progressive and forwarding-looking and focuses on a range of areas that have a direct influence on the health of the economy.
The government of India has taken exemplary initiatives to fuel the next level of growth of the economy. We are pleased to see that Budget 2023 has taken a stride in the right direction to position India as a technology-driven and knowledge-based economy.