Budget 2023-24: 10 Takeaways to Grow Business in India

After the dust has settled on the Budget presented by the Honourable Minister of Finance, Mrs. Nirmala Sitharaman, it is time now to chart our way forward in the Indian economy as well as positions we can take viewing the world economies wearing India tinted glasses.
 
Presentation of the Union Budget on 1^st February of each year is an annual exercise in India to make fiscal plan on a federal level covering our financial year that runs from 1^stApril to 31^st March. The Budget of 2023-24 has come at a time when we have many important milestones and events during the next 18 months, spanning across 2023 and 2024. Notably the Budget has been presented keeping in mind:
 

1. The G20 Leadership of India during 2023.
2. Russia-Ukraine conflict and the huge inflationary headwinds worldwide.
3. Upcoming general elections in May 2024.
4. India’s unique position to keep its growth intact at nearly 7% in a world that is going through severe challenges.

The Union Budget has been presented with these circumstances in mind and offers many opportunities in multiple sectors. Out of a list of about 35 areas that offer new opportunities and growth, our team has put together the following TOP 10 areas that we recommend for Indian companies to pursue growth over the next 12 months:

Engineering

Electric Vehicle Business has been given a push with machinery to manufacture Lithium-Ion battery cells been made 100% duty-free till 31^st March 2024.

Automotive

Vehicles, auto-components sub-systems and tyres can be imported for 100% duty-free for testing and certification purposes making product development in automobiles easier and more open.

Agriculture / Horticulture 

Could be a focus area well adopted by the Government and the eco-system could become further attuned to its growth. We should focus on growth in this sector as the Government plans to spend INR 2200 Crores (about USD 275 Million) for disease free and quality planting materials. 

Food

American Pecan nuts have been given an exception with a duty cut from 100% to 30%. Imports could bring in gains.

Energy

Energy Storage Systems are a very good area to be in and to make investments. Energy storage system with a capacity of 4,000 MWH would be promoted with viability gap funding. GOBARdhan – 500 new projects for biogas and waste to energy would be promoted with investments of INR 10,000 Crores (USD 1.25 Billion).

Technology

Artificial Intelligence is an area that the Indian Government wants to adopt and lead. Three centres of excellence are planned in association with top education institutions. Investment and collaborations in these areas are recommended. 

Railways

Investments in any product or service targeted at the Indian Railways should make the most amount of sense with the Government planning on spending INR 2,40,000 Crores (about USD 30 Billion). 

Logistics

Last Mile connectivity is getting a great push and so infrastructure building for ports, coal, steel, fertilizers and food will bring in investments of about INR 75,000 Crores (about USD 9.5 Billion).

Innovations

Lab Grown Diamonds – the Budget has pushed for manufacturing lab grown diamonds in India and a duty cut has been effected making this a zero duty item.

G20

Although this is not a sector or an industry, I will vote for all of us to keep an eye on opportunities flowing from these countries into India. With multiple engagements planned and visits of many delegations from the G20 to India, the G20 countries list should be high on our expansion plans.
 
 

Other Notable Developments

1. Regional Connectivity: 50 additional airports, heliports, water aerodromes and advanced landing facilities are investable areas in India presently.
2. Legal Relief for MSME: Tax disputes with the Government are likely to be resolved with an amnesty scheme that is widely expected.
3. Vehicle Replacement: Funds for scrapping old vehicles not eligible to ply on the roads have been allocated.
4. Cooperatives: This is a great time to set up cooperatives for manufacturing as the lower tax rate of 15% would apply to the new cooperatives.
5. The Government’s millets program is missing in the recommendation since the cycle of benefits could be long and unreliable.