Sectors That are Buzzing Ahead of Budget 2023

Will Budget hike threshold for tax deduction at source on income from online games?
The online gaming sector is one of India’s fastest growing sectors. The penetration of 5G technology in 2023 will further accelerate innovation in next-gen gaming tech such as augmented and virtual realities, 360-degree video, Web3. With 15 billion downloads in 2022, India is the largest consumer base of mobile games in the world.

As per Lumikai report, the industry clocked a revenue of $2.6 billion in financial year 2021-22 and is likely to cross $8.6 billion by financial year 2026-27. The Animation, Visual Effects, Gaming and Comic (AVGC) Promotion Task Force was announced in Budget 2022 to boost the domestic capacities and develop the opportunity landscape for the world.

What can the sector expect?
Formalisation of self-regulatory regime along with National AVGC-Extended Reality Mission.
Allocation of funds for implementation of the recommendations of the AVGC Task Force
Setting up of the ‘Game Development Fund’

Budget 2023 Expectations LIVE: FICCI wants Centre to scrap windfall tax
The government should scrap the windfall profit tax on domestically produced crude oil as the levy is adversely impacting the capex-intensive exploration of oil and gas, the industry said in its recommendation for the forthcoming annual budget.

India first imposed windfall profit taxes on July 1, joining a growing number of nations that tax super normal profits of energy companies. At that time, a Rs 23,250 per tonne (USD 40 per barrel) windfall profit tax on domestic crude production was levied.

The new tax, which was also slapped on the export of petrol, diesel and ATF, is calibrated every fortnight in step with international oil prices.

Industry chamber FICCI in its recommendations for the Budget, said such levy is in addition to all other existing levies.

“It is recommended that the Special Additional Excise Duty (SAED) on petroleum crude should be removed or if there is a need to continue the levy for some time as an extraordinary measure then the rate be changed to an ad-valorem levy of 20 per cent of incremental crude price over USD 100,” it said.

The windfall tax, it said, was over and above the heavy burden of royalty (20 per cent of oil price for onshore fields and 10 per cent for offshore areas) and oil industry development (OID) cess (20 per cent of oil price).

Logistics sector: Budget Expectations from Shipsy CEO
“National Logistics Policy has been a landmark development in mobilizing the power of digitization to improve the state of logistics in the country. The budget will most likely be aligned to augment it through concerted efforts. This entails more investments in connectivity projects and building logistics infrastructure in various economic zones, especially under the PPP model, to expedite the execution of these,” says Soham Chokshi, CEO and co-founder of Shipsy.

“In addition, India’s last-mile emissions per delivery being higher than the global average is an area that needs immediate attention. Reducing miles travelled per package and ensuring that the distance is covered through eco-friendly modes can help lower carbon emissions. So generous incentives for the deployment of EVs in deliveries backed with stringent policies can prove critical to addressing climate change concerns,” he adds

Budget 2023 Expectations LIVE: Budget 2023 expected to focus on job creation
Analysts expect the forthcoming Union Budget to focus on job creation.

B. Gopkumar, MD & CEO, Axis Securities said as this is the last full-year Budget before the Union Election in 2024, it is expected to be growth-oriented.

The primary focus of the Budget is likely to be on job creation and investment-driven growth. The real estate sector may get a boost with some announcements to expand the current income tax benefit for housing, Gopkumar said.

Measures to stimulate rural spending and infrastructure development would be the highlight in the Budget. Any roadmap to build and bolster the entrepreneurship culture can promote self-reliance and go a long way in employment generation.

FMCG, Manufacturing, MSME, and Banking are a few sectors that may see action, Gopkumar said.
With multiple government schemes assisting in the growth of MSME ecosystem, there is an increasing demand for various financial and non-financial services that will help MSMEs in their growth journey. Incentivizing these service providers and improving reach to the MSME segment will significantly increase the supply. This will help MSMEs build systems, talent, capacity, infrastructure, access to capital and other ingredients to meet the growth demand
– Vipul Verma, Executive Vice President, Wadhwani Advantage

The edtech segment foresees the upcoming Union Budget 2023 as remote and hybrid learning emerges in the Indian education landscape. The industry also oversees significant announcements from this budget to drive investment in this space along with favourable regulatory measures to build a conducive environment for digital learning. Toprankers believes that the government should envisage such a framework that promotes the collaboration of startups with government agencies to build capacity, share knowledge and ensure the nation’s holistic development
– Gaurav Goel, CEO, Toprankers

The modern workplace itself has transformed over the years and the concept of co-working is one such example. I feel that government should recognize the industry under special programs like REITs and provide some tax benefits to promote the growth of this sector. The second important thing is the TDS rate that is applicable to the co-working sector. Presently, the TDS rate for the co-working segment is 10% because we provide renting of both movables and immovables. As the shared space industry grows, a lower TDS rate will give this sector a major boost helping companies to provide real estate solutions to clients at economical rates, which will further help in a better flow of working capital
– Arjun Gulati, Co-Founder of Easydesq

Union Budget 2023 shall aim at policies and reforms which can significantly boost domestic demand and consumption. There are many ways to achieve this objective but considering constantly increasing urban salaried jobs, one of the important steps which the current Government shall pursue is revisions to the tax slabs for individual taxpayers. I believe that the current Government will consider implementing the Direct Tax Codes and significantly enhance the tax slabs for Individuals (10% up to INR 10 Lakhs, 20% up to INR 20 Lakhs and 30% in excess of INR 20 Lakhs). These slabs will significantly reduce the tax liabilities for Individuals and will lead to increase in in-hand surplus and spending power of consumers which in turn will result in increased demand and higher economic growth
– Sandeep Agrawal, Director & Co-founder Teamlease Regtech

Budget 2023 Expectations LIVE: Tamil Nadu textile industry seeks export incentives in Union budget
The textile industry of Tamil Nadu has sought export incentives and additional credit support in the budget for 2023-24 of the Union government to be presented in Parliament on February 1.

The Tiruppur textile industry which is the pioneer for exporting of textiles from Tamil Nadu and for that matter from South India has sought for credit support to the micro, medium and small scale units (MSME). The industry has sought credit support under the Emergency Credit Line Guarantee Scheme (ECLGS).

The exporters said that the economic slowdown and the uncertainty in the European market following the Ukraine war have led to a predicament for the industry which has been controlling the European market in the knitwear section.

K.M. Subramanian, President of Tiruppur Exporter’s Association (TEA) in a statement said, “A 5 per cent interest subsidy on export credit is required for MSME and non-MSME manufacturers. It is to be noted that the buyers are delaying payment globally citing several issues.”

We expect the government to reconsider the current putative tax structure [for crypto] and bring it at par with other normal business activities. This will bring more transparency by enabling Indian crypto traders to trade on Indian exchanges rather than going to Peer to Peer and foreign exchanges. This will also encourage innovators and entrepreneurs to build this most innovative technology of our times, from India rather than from outside India
– Avinash Shekhar, Founder and CEO of TaxNodes

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