Union Budget 2023-24: What Are the Expectations?

Posted on: Jan 17, 2023 | | Written by:

Union Budget 2023-24: What Are the Expectations?

Published on January 17, 2023. EST READ TIME: 4 minutes

As we step into the new year with stronger resolutions and high hopes, all eyes will be on the approaching Union Budget for FY 2023-24. How we manage our finances will depend significantly on the announcements made by Finance Minister Nirmala Sitharaman. While a budget aims to look at the country's overall growth, many features directly impact individual lives. One can only hope that while the focus can be on economic growth and development, this last full budget from the Modi government ahead of the Lok Sabha elections brings great respite from inflation. Let's see what to expect from the budget.

Greater incentives for the manufacturing sector

The post-Covid world, at large, has seen a paradigm shift in manufacturing. Many industries, from IT, telecom, fibres and yarn, automobiles, spare parts, electronics and others, are looking to shift their accounts to another, more stable partner. This posits a huge opportunity for India’s manufacturing sector and merits more significant governmental incentives. Key areas of interest to this sector include greater tax incentives on capital expenditure (investment in machinery, infrastructure, etc.) and operational costs for expansion (increasing infrastructure, production scales, etc.). India’s burgeoning IT industry also expects greater investment in AI, Machine Learning, Net 3.0 and the Internet of Things (IoT) manufacturing.

Improved Labour and Labour Relations laws

This is hugely important for the over 50 crore labourers employed in India’s unorganised sector. India’s outdated 29 labour laws are set to be overhauled by 4 new codes to govern labour and labour relations. These are Code on Minimum Wages, Social Security Code, Industrial Relations and the Health and Working Conditions Code. These are designed to protect the rights of industrial labour, guarantee a liveable minimum wage, regulate health and safety standards and progressively improve labour relations.

Expectations of the common people

The Indian middle and lower middle class have doubtlessly been affected the most by the fallout of the Covid pandemic. The expectation from these segments of society, therefore, is tax relief. The tax rate of 30 per cent needs to be slashed to about 25 per cent, and the threshold limit for the highest tax rate needs to be increased from INR 10 lakhs to INR 20 lakhs. The budget also needs to relook at increasing the limit under Section 80C. Investments of greater amounts in health insurance ought to fetch better tax exemptions. Better financial planning, for instance, investments in mutual funds and equity, also need to be rewarded with greater tax sops. This is one of the ways to increase the number of retail investors in the country.

Expectations from the corporate sector

The introduction of a common corporate tax rate, irrespective of manufacturing or services industries, has been a corporate expectation for many years. A uniform corporate tax of 15% is sought by industries in order to keep them globally competitive and give them an opportunity to outperform expectations at a global level.

Greater incentives towards clean energy

With climate change continuing to be a global concern, there is an expectation that investment in clean energy and renewable resources ought to be further incentivised. India is the world’s 4th largest producer of clean energy, and this sector has been lobbying for incentivisation for the longest time. There is a feeling that this budget will finally come through on this long-held vision.

Educational and skill upgrading expectations

India houses the world’s largest young population. Therefore, education and skill gap training in the country needs substantial investments. While budgets in the past have touched upon this subject, a significant push in this area is expected from the Union Budget 2023-24.

General Expectations

While various sectors of the economy and populace have high hopes for this budget, the following are a few general expectations that this budget entails.

● Greater emphasis on export promotion

● Greater emphasis on setting up import substitution and manufacture of OEMs

● An expansion in Universal Healthcare, best health insurance regulations

● Female Literacy and women’s empowerment

● Greater investment in education at the rural level

● Expansion of public sanitation works on a larger scale

● Rural development and healthcare

Conclusion

The budget for the year 2023-24 is set to be tabled by the Hon. Finance Minister on 1st February carries with it the hopes and expectations for a better and happier tomorrow. Will this budget be a populist one and have development at its heart? Or will it be a progressive one and strive to improve the country’s industrial and agrarian landscape? Let’s wait and watch.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

Find Out How a Health Insurance Advisor can Help You

Find out Everything about the Restore/Refill Benefit in Health Insurance

What are the factors affecting health insurance premium?

How Does Buying Health Insurance Reduce Your Financial Risks?

How To Purchase Add-on Cover For Your Heath Insurance Policy?