Budget 2023: Finance Minister Nirmala Sitharaman will present the Union Budget 2023 on 1 February. Industry leaders from various sectors are anxiously waiting for Sitharaman’s budget speech to see what she has to offer.
Real estate sector expectations
The real estate sector in India is one of the highest contributing sectors and the second largest employment generator after agriculture. Employment generation is a major objective for the government post-Covid. This sector has achieved remarkable recovery despite the pandemic and has contributed significantly to the economy.
The government should give some major relaxation in taxes and exemptions, and some reduction in GST on raw materials like cement, steel and tiles. Deduction limit for interest payment on home loan should be increased from existing Rs.2 lakh to Rs.5 lakh and basic deduction limit on housing loan should be increased from Rs.1.5 lakh to Rs.5 lakh so that affordability as well as luxury Housing can be promoted. segment, which is the need of the hour. Commercial real estate also needs more push especially in Tier 2 and 3 markets as there is huge scope for growth in those markets. HBIT founder Shiv Parekh said that reduction in tax rate from 30 to 25 per cent would definitely help the overall sector.
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Due to global issues, there has been an increase in commercial real estate (CRE) leasing activity, despite remaining challenges in the economy. New business ventures rely heavily on leasing out essential facilities and the associated infrastructure is the reason for the boom in the commercial real estate market. Due to high GST on raw materials like cement and steel, the supply of commercial construction properties may be constrained. The government needs to reduce GST on construction materials to help developers reduce the cost of construction and bring in more inventory. The increase in tax exemption on interest and principal on home loan for residential accommodation from Rs 2 lakh to Rs 5 lakh will provide a lot of relief to the customers and will bring more economic activities in this sector. Co-working spaces have emerged as a major contributor to the commercial real estate sector and account for 10% of capital blocked on receivables. Propcatalyst co-founder Ankush Ahuja said reducing the tax rate to 2% would help them flourish and would be good for CRE.
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The Indian economy is on a slow path of recovery as the COVID-19 crisis has more or less subsided. It has been emphatically established that there is a need to revive the rural sector and bring it back to a place of prominence as a driver of the national economy, to ensure that the kind of growth witnessed during the COVID-19 crisis Gone, don’t let it happen again. , A greatly increased budget allocation is to be directed towards revitalizing rural areas, especially for improving agriculture. Agriculture (and livestock rearing) should be encouraged so that it can meet household food and nutritional security (FNS) and stable cash income. There is a need to focus on regenerative agriculture practices that will ensure ecological security and food security. MSMEs, especially around food processing, need to be encouraged so that a lot of jobs can be generated at the level of the local economy. In line with the principle of “Vocal for Local”, the government should invest in creating local production and marketing clusters. Thus the rural sector needs two types of investment – one for expanding economic opportunities and the other for mitigating existing distress.
From this point of view, several specific suggestions are as follows:
- Investment in solar-powered, community-based micro-irrigation at Rs 7 lakh per scheme for 50,000 schemes of 10 hectares each providing assured rabi irrigation – Rs 35,000 crore.
- Rejuvenating water harvesting structures by excavating existing lakes and tanks @ Rs. 500,000 per tank for 100,000 tanks – Rs. 5000 crores
- Increase MGNREGA allocation to Rs 200,000 crore to meet all wage employment requirements, which in turn can create massive livelihood assets in the form of farm ponds and water harvesting structures. increasing the number of days to 200 in tribal areas and 150 in other areas; Increase salary to Rs.300/-
- Incentive for Regenerative Agriculture @ Rs. 5000 per hectare for 10 million hectares – Rs. 5000 crores
- Extending Support to NGOs under FPO Support Program
- Encourage local investment in MSMEs on food processing, and other start-ups – Cash incentives, tax breaks and easy loans will be helpful in boosting the MSME sector.
- Encourage large manufacturing companies to invest in small and mofussil towns to create local employment in ancillary and back-end firms, and invest/incentivize companies to build local ITIs to train youth in specific skills .
- Increase in area under FRA, and incentivize forest management groups with working capital of Rs 25 lakh per group for resource management
- Increase old age pension, and widow pension to at least Rs 3000 per month
- Increase farmer incentive under PM-Kisan to Rs 8000 per hectare
- Encourage girls to pursue higher education – meet the cost of transportation to a nearby college
- The corpus of Bharat Rural Livelihoods Foundation (BRLF) has been increased to Rs. 1500 crores
This year the Finance Minister has to give maximum to the sector which has a huge impact on the lives of the people. One of the biggest requirements from the budget for the insurance sector is that there should be no GST on health insurance and life insurance. As a country, we have realized during Covid that a very small percentage of people had insurance policies and paying for hospital expenses took a huge toll on the financial health of families. The salaried class pays the highest tax according to the number of people. In Pradan, integrator Narendranath Damodaran said that various tax provisions under section 80C and other sections should be extended to enable them to invest in insurance products by Suraksha Life Insurance.
There should be insurance provisions for senior citizens under which they should not be denied coverage. Aatur Thakkar, co-founder and director of Alliance Insurance Brokers, said that as in this age group, they have worked all their life and paid taxes and when they are retiring we need to provide them health insurance for sickness and diseases. Coverage should not be denied on the ground.
With monetary policy tightening, SMEs are feeling the pressure on day-to-day liquidity; We recommend that the government should allow nationalized banks to use accrued GST credits as collateral to ease immediate liquidity. With raw material costs rising due to global events, the government should consider further reducing taxes for SMEs in the wellness sector. The wellness industry is going to contribute immensely in the long run with a fairly large number of start-ups offering a wide range of products and with nationwide reach, thus adding to the exchequer. The industry was valued at INR 901.07 Bn in 2018 and is projected to reach INR 2,463.49 Bn by 2024, expanding at a Compound Annual Growth Rate (CAGR) of ~18.40% during the period 2019-2024. SMEs in the wellness industry should also be given PLI schemes to give a boost to this growing sector,” Mohit Goyal, Founder & Director, Vedic Cosmeceuticals
Every sector is eagerly waiting for the announcements in the Union Budget 2023-23 and hoping for the best things for their respective sectors.