Union Budget 2023: Industry expectations

As Union Finance Minister Nirmala Sitharaman is set to present the Union Budget, also comprising the Railway Budget, on 1 February 2023, India Inc awaits announcements that can boost the economy and investor confidence.

30 Jan 2023 | By Rahul Kumar

Union Finance Minister Nirmala Sitharaman will present the Union Budget on 1 February 2023

Meanwhile, industry leaders tell PrintWeek about their specific expectations from the Budget. 

The Indian packaging industry is one of the fastest growing sectors, increasing at a CAGR of ~25% and anticipated to reach USD 200-million by 2025. Such fast growth is made possible due to the rising population, increasing income levels, and changing lifestyles. 

Pankaj Poddar, Group CEO, Cosmo First, said, to position India as the global sourcing hub for plastic and increase industrialisation; government should lower the imports of polymer (especially since polymer production is short domestically), increase the custom duty on various finished plastic products, including polymer films made from polypropylene or polyester, increase benefits under the RoDTEP from 1.4% to 3%, grant 3% interest equalisation for exporters and interest subvention should be reassessed for a high growth path. 

“Simultaneously, the government should encourage the industry players by granting incentives for innovation and R&D to make the domestic plastic industry more dynamic and globally competitive,” he added. “Overall, we are expecting the Union budget 2023 to be industry-friendly with a focus on industrialisation and technological innovation to support domestic businesses with enormous potential and become internationally competitive.”

Monica Malhotra Kandhari, MD, MBD Group, expects the Budget to reduce GST on eBooks to 5%. 

“The idea of promotion of eBooks is welcome along with a concern, the input credit availed for input, capital goods, and input services are charged at the higher rate, resulting into excess credit lying in the books which will remain un-adjustable all the times. It is suggested to create a mechanism to make corresponding input chargeable at the same rate,” Kandhari said.

She added, “The GST on education books is exempt with an idea to promote and make education economical, but on the other hand GST paid for input, capital goods, and input services are increasing the cost of manufacturing. It is suggested to create a mechanism to make corresponding input/ input services/capital goods, etc either exempt from GST or start levy the GST on the sale of education books to enable the manufacturer to claim input credit.”

Mihir V Shah, executive director, Vipul Organics, said the Budget will be a growth-oriented budget since the focus of the government has been on it for some time now. We hope that the industry benefits from the policies laid out in the budget.”

He said the chemicals industry in India which contributes around 10% to the GDP needs to be given prominence in the budget. The Indian manufacturers have been asking for stringent anti-dumping duty protocols to ensure that the industry continues to be a growth driver in the India story.

“Production-linked incentives that are available to several industries should also be made available to the chemical industry in this Budget. This should be applicable to existing as well as greenfield projects,” he said. “To achieve economies of scale in chemical production to compete with the global manufacturers, the government should, in this budget, earmark grants for providing infrastructure such as land banks, common effluent treatment plants, etc. Only then can the industry focus on innovation and technology and not worry about cutting corners to meet global demand and global prices.”

Rahul Tikoo, managing director, India subcontinent and Polyurethanes, South Asia Business, Huntsman, said, “The government’s proposal to reduce customs duties on certain key chemicals in last year’s union budget was a huge relief and will aid in expanding the chemical industry’s scope and integrating it into the circular economy. Consumer spending patterns influenced by Covid and global supply chain disruptions have created significant opportunities, compelling specialty chemical companies to re-evaluate their manufacturing footprints to participate in this growth.

He added, “We are observing substantial investments in the feedstock ecosystem, and India is being considered as an alternative location for sourcing chemicals. A new PLI is currently being developed for the chemical industry, which will be of great benefit to the entire chemical value chain and help reduce reliance on imports.”

If you want to share your expectations, please email rahul@haymarketsac.com.