In this year’s Union Budget 2023-24, the Government is expected to present a growth-focused plan benefiting all the industries. Different sectors have different expectations from the budget, let’s see what the different sectors expect from industry expert Yogesh Mudras, Managing Director, Informa Markets in India.
Healthcare & Pharma Sector: “The Union Budget 20- 23 should look at strengthening the system of the Pharma industry, with more focus on capital outlay. It should emphasise measures to facilitate the ease of doing business and contribute to the Pharma industry’s long-term growth. To achieve the vision of reaching $120 bn -$130 bn by 2030, the budget should outline supportive policies, simplified regulations, and simple GST norms to aid in the development of the pharmaceutical industry. There is also the need to look at Tax breaks and incentivising innovation, which would further help fast-track the industry and fuel the growth of neglected areas of innovation and R&D. The budget can look at allowing CSR funds to flow into blended finance for telemedicine and e-health to improve affordability and push the UHI across all the public and private medical establishments. Government can also rationalise the duty structure by reducing high customs duty to 2.5% on medical devices to ensure patient affordability and easy access to quality medical devices. Public-Private Partnerships (PPP)s are the way forward for creating a more sustainable healthcare system. While last year, the government recognised the importance of production-linked incentives (PLI) for the Active Pharma Ingredient (API) industry, this year’s Union Budget should review it yearly to encourage self-reliance in raw material production and make manufacturing more competitive.”
Renewable Energy Industry: “With pressure on countries for climate action and India’s climate commitments of COP26 and COP27, India has been ramping up its efforts towards a greener and more sustainable economy. Industry experts are hoping to reap maximum benefits with the expectation of some tweaks in the tax implications in the upcoming budget. India has taken a Net Zero Pledge by 2070; therefore, it becomes important to have incentives to promote renewable energy, 2G ethanol, and flex-fuel hybrid vehicles and to create an Indian market for decarbonisation (Carbon credits).
The government has already approved an outlay of Rs. 19,744 Crores towards the National Green Hydrogen Mission, but to ensure access to low-cost capital for Renewable Energy, Battery Energy Storage Systems and Green Hydrogen project development, the budget 2023 should take measures in line with other RE-focused regions and economies across the globe. The Industry is further looking at the inclusion of petroleum products in GST to reduce costs and offer incentives to OEMs and tax benefits to ESG Bond issuances. Another expectation from the Union Budget 2023-24 is the inclusion of the Power sector, Railway or Airport redevelopment under Section 35AD as a specified business, wherein specific businesses can claim a tax deduction on their capital expenditure.”
Travel & Tourism Industry: “The Travel industry is looking forward to a well-thought-out and progressive Union Budget 2023-24, which would help pull the industry out of the morass that they find themselves in due to the unprecedented occurrences over the last few years. The industry expects the Government to recognise the sector with an ‘industry status’, which would help bring in some good measures to support and boost the growth of the industry. Travel and tourism creates 12% of new jobs in the country per year; keeping this in mind, a multiplier effect would positively impact the nation’s economy.”
India needs tourism, and the tourism sector needs the much-needed push to recover from its debilitating blow during the Covid-19 pandemic. Tourists find everything they need in India because of India’s geographical and ethnic diversity, richness, heritage and diverse cultures and traditions. Be it a well-heeled or a budget-oriented traveller, India has it all. India also holds an advantage as a medical tourism destination with its high-class but affordable medical and health services. However, the tourism infrastructure in India is a challenge to the growth of the sector. With a lack of adequate tourism infrastructure, be it quality and network of roads, rail or air connectivity and other basic facilities for tourists, we still have to go a long way. In the upcoming budget, we expect the government to simplify and streamline the regulatory policies to further encourage and boost the sector.”
Gem and Jewellery Industry: “India’s Gem and Jewellery market size is expected to touch US$ 85 billion by the end of the FY23, with the growth in exports successfully crossing 55% in the last two successive years. The Government is aiming at over US$ 75 billion per year in jewellery exports by 2025. For this, there is the need to undertake various measures to promote investment and upgrade technology and skills to promote India in the international market, which has already begun. The Government has already permitted 100% FDI in the sector under the automatic route, which does not require approvals for the foreign investor and has signed a Comprehensive Economic Partnership Agreement (CEPA) with the UAE to boost exports further. The Gold and Diamond trade will contribute more than 8% to the GDP, and the sector is likely to employ more than 9 million people by 2023. The industry expectations from the Union Budget 2023 are to announce measures like the abolition of import duties on raw materials. The Industry stakeholders are also expecting some relief in gold import duties to help create an equitable competitive environment for the regular and grey markets, with a reduction in custom duty on Gold and Silver by about 4%. There is also the need to reduce customs duty on Gold ore imports which should be at least 1.5% lower than refined gold bars, along with the abolishment of agriculture infrastructure development cess (AIDC) by about 2.5% on Gold customs duty. This will also help boost export demand in the Jewellery segment and rationalise prices, spawning an increase in ancillary industries and thereby increasing employment opportunities in the sector.”
