The Union Budget presented by Finance Minister Nirmala Sitharaman Wednesday evoked mixed reactions from various sectors with some experts raising concerns about government making no efforts to control steel price, and less allocation in health sector, and some terming the Budget as growth-oriented and MSME-friendly and one meant to give a fillip to the economy.
Pankaj Sharma, president of the Association of Focal Point industries, Ludhiana, and general secretary of Chamber of Industrial and Commercial Undertakings (CICU), said that the revamped credit guarantee scheme for Micro, Small, and Medium Enterprises (MSMEs) will help reduce the cost of financing by 1 per cent.
Sharma said the increase of capital expenditure by 33 per cent amounting to a total of Rs 10 lakh crore will help boost the infrastructure of roads and railways that will subsequently give a direct fillip to steel and cement industry and increase employment opportunities. “This will boost the economy. MSME will get a hassle-free loan at 1 per cent lower rate with less compliance,” he said.
However, Sharma expressed concern that nothing has been done to present under invoicing. “There is no provision to control fluctuations in steel prices, while the import duty on products coming from China has been raised marginally only on a few products; whereas it should apply to products like fasteners, bicycle parts, etc. Provisions like reversal of GST input credit for the fault of the supplier should be removed. Focus should be given on faceless systems, compliance simplification to promote ease of doing business,” he pointed out.
‘Budget is MSME-friendly, growth oriented’
Chartered accountant M K Gupta said that as per the new guidelines, MSME will get help to recover the payment from creditors in time. “The budget is MSME friendly and will boost the sentiments of MSMEs to invest. Ludhiana being the hub of MSME units has more than one lakh registered MSME units, both from engineering as well as hosiery segments. It is a growth-oriented budget, and will pave the way for our country to achieve the target of a 5 trillion economy,” Gupta said. With less compliance, he said the budget would boost startups and the MSME sector. PAN-linked Aadhaar will help curb bogus billing which is ruining the smooth working of industry, he said.
‘New Income Tax regime a welcome move’
Sharing his observation, Gurmeet Singh Kular, president of the Federation of Industrial and Commercial Organisation (FICO), said that there was “absolutely nothing” for the MSME sector in the Budget. “The government has extended the ECLGS scheme. But to pay a loan, taking another loan is not the solution. There is no technology upgradation scheme, no incentive, no new scheme, and nothing at all for the MSME sector. A totally disappointing Budget for the MSME sector. We welcome the new Income Tax regime, as it will benefit the masses. We also welcome the increase of import duty from 30% to 35% on complete bicycles,” Kular said while adding that the government should have increased the import duty on bicycle parts to promote local manufacturers.
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‘No rationalisation of Income Tax’
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K. K Seth, FICO chairman said that the Income Tax for private limited and public limited companies is capped to a maximum of 25 per cent, whereas that for partnership and proprietorship firms are capped at 30 per cent, which does not provide a level playing field to the corporates and small industries. “We are utterly disappointed that the rationalization of Income Tax has not been done in this Budget too,” Seth pointed out.
‘Several supportive policies for startups’
According to Yulia Aslamova, Head of Asia, DRIM Global, said the Union Budget continues the trend towards more productive expenditure. “Like the rest of India, we welcome Budget 2023 with open arms. With the easing of capital gain taxation and carrying forward of loss on change of shareholding of startups from seven years of incorporation to 10 years, the country could become an innovation hub to many more startups this year. India is now the third largest ecosystem for startups globally, and ranks second in innovation quality among middle-income countries,” Aslamova said. The several supportive policies for startups in the Budget 2023 by the finance minister will help to scale up the operations to a greater extent and create a boom for the startup ecosystem across the country, Aslamova mentioned.
‘Despite inflation, allocation in health department dropped’
Dr Arun Mitra, senior vice-president of The Indian Doctors for Peace and Development (IDPD), has expressed dismay over the decrease in the total allocation to the health sector in the Budget. “In the last year’s budget of Rs 39.45 lakh crores, the health expenditure was Rs 86,606 crores, which was 2.20 per cent of the Budget. But this year the health sector has been allocated Rs 88,956 crore out of the total budget of Rs 45 lakh crore ie; 1.98 % of the budget. There is a decrease of 0.22% despite high inflation,” said Dr Mitra.
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He added that the budget for National AIDS (Acquired Immunodeficiency Syndrome) and STD (Sexually Transmitted Diseases) Control programme has seen an increment of 11.61 per cent – Rs 2,622.75 crore from Rs 2,349.73 crore which was the revised estimate for 2021-22. “However, if we compare the actual money spent in 2020-21 on the same programme, there has been a drop of 6.84 per cent. The whole exercise is to promote the digital agenda instead of the infrastructure and employment of doctors in the rural health centres,” he opined.
The statistics released by the health ministry earlier this month flagged an over 80 per cent shortfall in surgeons and paediatricians, and an over 70 per cent shortfall in physicians and gynaecologists. “There is no plan or direction to fill these vacancies despite the fact that the number of doctors coming out every year has increased but because of the lack of infrastructural facilities in the rural areas most of them opt for the private sector or migrate to other countries. There is an emphasis on the Public Private Partnership mode of healthcare through which money is shelved to the private sector,” Dr Mitra added.
‘Budget left out textile sectors ignored people of Punjab’
Aam Aadmi Party MP (Rajya Sabha) from Ludhiana Sanjeev Arora who is also an industrialist has expressed disappointment over the Budget. “I am really disappointed with the Union Budget. People were expecting much more. Tax benefits are almost nil if inflation is taken into account,” Arora said.
He said that the Budget had nothing much for the industrial sector. “The textile industry, one of the biggest employers, which is reeling under huge losses, has been left out,” he pointed out.
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The housing industry, he said, did not get any boost in the shape of incentives. Further, he said even markets, after understanding that the Budget has nothing to give, entered into a negative phase Wednesday. At the same time, he said that the only good thing in the Budget is a substantial increase in infrastructure expenses.
Arora pointed out that health expenditure has been reduced from 2.20 per cent to 1.98 per cent of GDP, which is not a good sign for the country. “Rather, it should have been at least 3 per cent of GDP,” he opined. He also regretted that the Budget has totally ignored Punjab as there is nothing specific for the people of the state.
‘Reform in taxation system was much needed’
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Ashok Juneja, the president Punjab Tax Bar Association, said that the new taxation system will increase the number of assesses as well as revenue. The taxation system has been simplified. This reform was much needed. Forty-four per cent of leading economists and tax experts have termed the budget as excellent. We hope that the economy will boost up in the years to come,” Juneja said.
‘No change in GST on bicycles and its parts’
D.S Chawla, president United Cycles Parts and Manufacturers Association (UCPMA) said that as the duty on imported bicycles has been increased from 30 per cent to 35 per cent, these brands will be costly in India. “However, the Indian industry will be on an edge. There has been no change in GST on bicycles and its parts. We welcome the new Income Tax Slabs and also earmarking of Rs 2 lakh crore loans to MSME,” said Chawla while calling upon the government to ensure that the lending ratio to MSME must be as per % population in industry.
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‘People can’t be encouraged to invest in tax saving schemes’
Saurabh Jain, a financial planner based in Ludhiana, said that the new taxation system is a default system in which benefits under 80D and 80C will not be applicable. Hence people cannot be encouraged to invest in tax-saving schemes, so it is detrimental to the insurance sector. If people want to opt for the old tax regime, they need to give their consent or by default, they will move into the new regime, Jain said.

This data comes from MediaIntel.Asia's Media Intelligence and Media Monitoring Platform.