The Budget proposals will have a multiplier effect on growth by crowding in private investment, give relief to middle-income taxpayers, and promote rural development and job creation, opined experts and industry players.
Finance Minister Nirmala Sitharaman on Wednesday proposed a Rs 45 lakh crore Union Budget for 2023-24 with an aim to "promote exports, boost domestic manufacturing, enhance domestic value addition and encourage green energy and mobility".
Commenting on the Budget, SBI Chairman Dinesh Khara said it is growth accretive, fiscally prudent and consumption supportive.
"The huge emphasis on capital expenditure could be the perfect recipe for a private investment cycle that is already visible. Support for MSME and Agriculture will broad base credit growth. Reasonable government borrowing numbers will support lower interest rates and the move towards a clutter-free new tax regime will significantly spur consumption," he said.
Sitharaman announced hiking the capital expenditure for infrastructure development by 33 per cent to Rs 10 lakh crore for 2023-24 and will be at 3.3 per cent of the GDP.
"Focus has been on tuning spending towards capital expenditure to create a multiplier effect on growth by crowding in private investment. From inflation standpoint as well, the budget has given relief by raising rebate limit under personal income tax from existing Rs 5 lakh to Rs 7 lakh (new regime)," said Dipanwita Mazumdar, Economist, Bank of Baroda.
The government also proposed that an individual will have to pay tax on the maturity amount of life insurance policies where the aggregate annual premium exceeds Rs 5 lakh.
On this, Kapil Mehta, Co-founder of SecureNow Insurance Broker said this will dampen the interest of individuals to buy high-value traditional insurance, it will increase the focus on term plans and pure risk covers which is good.
Manick Wadhwa, Director of Strategy at SKI Capital Services said the merger of SEZ authorities' powers with IFSCA will provide relief and ease of doing business in the Gift City, making it a more attractive investment destination.
Sumita Pillai, Chief Executive Officer of Torus Private Wealth was of the opinion that the budget strikes a great balance between inclusivity through aid and skill development to major lower income groups, growth through record high capex outlay at 10 lakh crore and still maintaining fiscal prudence by staying on course at 5.9 per cent deficit to GDP.
Vivek Jalan, Partner, Tax Connect Advisory said the finance minister has done a fine balancing act keeping the fiscal deficit under control to 5.9 per cent in the fiscal 2023-24 whereas pushing the peddle on growth through the twin policy of vigorous credit disbursal and estimated capital expenditure of 10 Lakh crore.
The finance minister has also proposed simplification of Know Your Customer (KYC) process.
V Swaminathan, Executive Chairman, Andromeda Sales and Apnapaisa.Com said streamlining the KYC process, making PAN a common business identifier and improving the usage of Digi locker should ease investment, taxation and enhance the financial inclusion of customers and lenders.
Akhil Saraf, Founder and CEO, Reloy, a proptech startup, said the government doubling down on building digital infrastructure including streamlining digital KYC will boost the startup ecosystem.
The budget feels balanced as India moves from a low-income to a middle-income country, he said.
The finance minister has also announced that the revamped credit guarantee scheme for MSMEs will come into effect from April 1.