With major changes in tax slabs and tax regimes, it is expected to be a budget that will positively impact the middle- and lower-income segments.
The Dubai chapter of the Institute of Chartered Accountants of India (ICAI) has hailed India’s budget for supporting growth and being future-oriented. In its opening remarks, the institute’s representatives praised the budget for easing taxes on the middle class and taking steps to reduce unemployment, poverty, and income disparity while keeping prices in check.
“India is on the total path of growth,” said Dinesh Kothari, Vice Chairman and Managing Director of Delhi Private Schools group. “If you have not invested in Indian markets, now is the time to do so because the dream run is about to start.”
It was on Wednesday that India’s Finance Minister Nirmala Sitharaman presented the union budget – the last full-fledged Budget before the general elections next year. With major changes in tax slabs and tax regimes, it is expected to be a budget that will positively impact the middle- and lower-income segments.
At an event held to discuss the budget, members of the ICAI went over the finer details of it and broke it down to explain how the changes would impact the various groups of Indians. “It was a budget that focused on 3 Cs- Capex, consumption, and capital,” Anurag Chaturvedi, Chairman of ICAI Dubai. Capex, an acronym for capital expenditure, is the money spent to buy, maintain, or improve fixed assets.
“This budget has been wonderful,” said Paras Shahdadpuri, Chairman of the Nikai group. “It is a bottom-up approach, which means they have taken care of the weaker section of our country. They have also taken care of the scheduled cast, scheduled tribes, and tribal areas of North and Northeast India. I would say it has been a very encouraging budget, especially considering how much they have spent on Capex, which is going to generate a lot of employment, manufacturing activities, roads, and ports.”
The 2023-24 budget is expected to drive the $3.4 trillion economy to its medium-term goal of hitting $5 trillion by 2025-26. For Chaturvedi, the key takeaway has been the focus on senior citizens. “The kind of incentives that senior citizens are getting is extremely critical,” he said. “They will be getting their leave encashment which is a big relief after the COVID pandemic. People have been working from home and not taking their days off. When this is converted into leave encashment and added to their retirement fund, it is a huge saving for them.”
According to Chaturvedi, the reduction of tax slabs for an individual income of up to 7 lakhs will give people surplus money to invest. “This will further prop the Indian economy,” he said. “The government is investing towards a growing India and these investments and capital market will help the country prosper.”
For non-resident Indians (NRIs), the budget has been slightly disappointing as some of their long-standing demands were not addressed. However, according to the experts, there were some factors that worked in favor of the NRIs.
“This budget has made it very easy for those wanting to set up businesses in India to do so,” said Paras. “So, if NRIs wish to go back, they will feel more comfortable doing so, ensuring that the FDI coming through them is safe, secure, and productive.”
In addition to this, the budget saw the reintroduction of offshore derivative instruments (ODIs), commonly known as Participatory Notes (P-Notes). Nearly four years after they were partially banned by market regulator SEBI, PNotes will make a comeback in the Indian stock market as Nirmala Sitharaman announced that the government will recognize ODIs as valid. “The lost glory of P-Notes has been brought back,” said Charanjot Singh Nanda, a member of ICAI. “And on the P-notes issued, there will be no short-term or long-term capital gains. This means money will pour in.”