Budget falls short of NRI expectations for TDS (2023)

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Raising the income tax cap, with a focus on infrastructure and affordable housing, will help boost the economy, they say

Non-resident Indians in the UAE hailed India's Budget 2023-24 as a far-sighted and inclusive plan to move the US$3.4 trillion economy towards its medium-term target of reaching US$5 trillion Americans until 2025-26.

However, most expressed their dismay at the budget, which failed to heed their long-standing call to reduce TDS (withholding tax) across all asset classes for those who have a source of income in India and need to pay taxes in the country in which they live.

Finance Minister Nirmala Sitharaman did not even mention or acknowledge his contribution to India's success story in her budget speech. The Indian diaspora is the largest in the world and its remittances in 2022 totaled $100 billion. The United Arab Emirates was the second largest source of remittances after the United States.

Here are excerpts from some of the notable budget NRIs:

Yusuffali MA, Chairman of Lulu Group: I would describe it as an "inclusive" budget that tried to take into account all parts of society and different priority sectors. The construction of 50 new airports and the development of waterways are sure to have a major impact on India's socio-economic fabric and further strengthen our position as a dream destination for global businesses and investors. I am confident that this budget will further strengthen India-Gulf trade ties and bring more investment into the country to benefit our economic development and employment sector.

Dr. Azad Moopen, Founding President and CEO of Aster DM Healthcare: The budget has an excellent focus on skills development and addresses one of the key challenges facing the healthcare industry today: nursing staff shortages , announcing plans to launch 157 nursing schools. along with existing medical schools. However, the general momentum for the health sector is lacking. We expected an increase in the budget allocation for the industry, which is essential to fill the gaps in demand. The need for more hospitals and health facilities in rural and suburban areas to meet the growing needs has not abated.

GP Hinduja, Co-Chairman of Hinduja Group: This is a pro-growth budget with a big investment push, maintaining fiscal discipline and none of the populism that is often evident in pre-election budgets. It consolidates India's position as “the” investment destination with great political stability. The focus on capacity building, capital investment, increased infrastructure and a friendly tax regime will certainly attract global investors.

Joy Alukkas, Chairman of Joyalukka Group: The 3.3 percent of GDP investment spending proposed in the budget proposal will accelerate the country's economic growth and job creation. The allocation of Rs 2.20 trillion as direct remittances to farmers and the substantial funds allocated to various agricultural/MSME activities will give a boost to the agricultural/MSME sectors. The budget ensured a sound macroeconomic environment.

Faizal Kottikollon, Chairman of KEF Holdings: The budget is a blueprint for India's expected leap to a $5 trillion economy in a few years. Increased spending on infrastructure, railways, tourism, renewable energy and the energy transition will open up many opportunities for global investors.

Dr. Ram Buxani, Chairman of Cosmos-ITL Group: India's finance minister has said in no uncertain terms that NRIs mean nothing to his homeland. The text of the budget does not even mention the NRI in an empty way.

Otherwise, the inclusive budget is much appreciated. This year's budget is the voters' budget. And the NRIs have no voice in their country. It is a big decision to identify 50 destinations within the country to promote tourism. Scrapping old vehicles, including ambulances, will create a better environment.

Thomas KV, Chairman, Thomsun Group: The 2023-24 budget is a testament to India's lofty ambitions to remain the fastest growing major economy, driven by technology and skills. The move to provide a strong push towards digitization, skills development and job creation is critical for growth. The new income tax regime is a welcome relief for the broad middle class.

Shamlal Ahamed, Executive Director of International Operations, Malabar Gold & Diamonds: The budget has worked to stimulate further growth in the economy, addressing the global slowdown and inflation concerns. From the point of view of the jewelry industry, our main recommendation to reduce gold import tariffs to discourage illegal imports was not heeded and is very disappointing. We hope that this request will be considered and processed in the best possible way.

Adeeb Ahamed, Managing Director, LuLu Financial Holdings: A balanced budget that takes into account the aspirations of India's youth and MSMEs. The budget underlines the fact that the way forward is to build an economy based on technology and knowledge. The proposal for an integrated and innovative approach to tourism destination development bodes well for the tourism sector.

Kamal Vachani, Group Leader and Partner, Al Maya Group: The budget is humanitarian as the income tax exemption has been increased to 700,000 to benefit the middle class. This will cause households to spend more, leading to an increase in aggregate demand. A reduction in customs duties on open parts of cell phones (TV), cell phones, camera lenses, etc. would greatly enhance the Indian export of the product.

Thumbay Moideen, Founding Chairman of Thumbay Group: The overall budgetary outlook is positive and growth oriented with a focus on key sectors that are sure to be the main drivers of growth in the Indian economy and the $5 trillion target will be achieved by 2025. Key Highlights for us were the importance placed on green growth, youth empowerment, health research allocation and establishment of AI hubs making India a shining example of a global hub of excellence.

Mohan Valrani, President of Arcadia Education, Co-Founder and Mentor of Al Shirawi Group: This year's budget is a significant budget that continues the trend of more productive investment, which has grown to $10 trillion, up 33% year-over-year. before 2021 onwards than double. 50-year interest-free loans for state governments with a significant increase in spending of INR 1.3 trillion will create many jobs. Tax breaks for the middle class are a welcome step, but the budget isn't much for NRIs.

Dr. Dhananjay Datar, Chairman of Al Adil Group: There is a huge tax break for the middle class, which means more disposable income. This, in turn, will increase consumption and stimulate the economy. The creation of the Agriculture Accelerator Fund will encourage business creation in rural areas and will aim to provide farmers with innovative and affordable solutions to the challenges they face.

Dixit Jain, The Tax Experts, DMCC: I was hoping for more relief for NRIs, but not much for them. One of the factors I liked was the clarification on the DTAA (Double Taxation Agreement) benefit on income from mutual fund shares, where NRIs can now apply for a TRC (Tax Residency Agreement) and receive the benefit immediately. Overall, a good budget.

Neelesh Bhatnagar, Managing Director, NB Ventures: A focused budget that will propel the economy towards a GDP growth target of 7.0%. The government will mainly focus on strengthening the infrastructure with 50 new airports and a big push with an allocation of INR 2.4 trillion to railways. Seniors have benefited from a higher deposit limit of up to 30 lakhs. Startups are incentivized to carry losses for 10 years, with a particular focus on AgriTech startups.

James Mathew, CEO and Managing Partner, UHY James Chartered Accountants: The budget reinforces India's positive economic sentiment with inclusive reforms, business-friendly initiatives, sustainable growth opportunities and people-focused tax regimes. It is consolidating India's economic competitiveness through measures that will catalyze the business landscape.

Raju Menon, Chairman and Managing Partner of Kreston Menon: Budget focuses on broadening the scope of economic growth, boosting key areas like infrastructure and manufacturing, and strengthening India's march towards a technology and knowledge-based economy . Until capital spending reaches 10% of GDP, aggressive growth cannot be stimulated. This is a middle-class and youth-friendly budget with income tax audits, job creation initiatives, and support for start-ups and the education sector.

Naveen Sharma, Former President of ICAI Dubai: A growth-oriented budget that expands on previous initiatives, breaks new ground and will certainly help India become a top three economy. Increasing capital spending is a bold move to create jobs. A focus on tourism, technology and promoting innovation in agriculture will help India in the years to come.

Sajith Kumar P.K., CEO and Group MD, IBMC Financial Professionals Group: Budget is critical for global economies to see opportunities in India. The budget identified seven priorities to achieve economic growth of 7.0% in 2023-24. Indian equity markets responded positively to the budget. The Sensex index exceeded 60,500 points. The budget has a greater focus on inclusive economic growth through support for state governments.

Anish Mehta, Former President of ICAI Dubai: It seems that this budget is based on the principle of sharing and caring. It has good components for women, older adults and middle-class men and companies (SMEs and start-ups). This budget is an attempt to introduce more and more people to the new tax system. It will drive small savings into a big one. Stock markets are happy with this budget.

Bharat Bhatia, Founder and CEO of Conares: The government's commitment to invest in major transport infrastructure projects is exciting. Revitalizing 50 airports and investing Rs 750 crore in 100 transport projects and Rs 100 crore per year for the Urban Infrastructure Development Fund is a huge boost for the construction and steel industries and a significant step towards creating a one India stronger and more resistant. This is an investment in the future of India and will fuel economic growth for years to come.

John Varghese, Managing Partner at HLB HAMT: The Indian government's efforts to simplify the tax payment process is an excellent step in the 2023 annual budget. Just 16 days is a fantastic improvement that makes the process more efficient and save time. It also makes it easier for citizens to meet their tax obligations, as the government plans to introduce updated common IT reporting forms and improve the claims resolution process.

Adam Abdul Nazar, Deputy CEO of Life Healthcare Group: The strong focus on drug and medical device research is welcome as it is a step in the right direction for modernizing healthcare in India. We are pleased that the government understands the value of encouraging the manufacturing and retailing of pharmaceutical and medical products for the home. These developments could boost India's retail pharmaceutical sector and transform the country into a global pharmaceutical hub. This offers a promising vision for the future of Indian healthcare.

V Shamsudheen, Director Barjeel Geojit Financial Services: One of the highlights of the budget is the emphasis on the vulnerable population. The four items mentioned in the budget are women's empowerment, a tourism action plan, an initiative for artisans, and green growth. The importance given to the connectivity of villages to facilitate the transport of agricultural products will reduce the spoilage of agricultural products and provide farmers with a better price. Another support they receive is the incentive to use renewable energy, which helps increase spending on investments in education and health in the countryside.

Parveen Jain, President of NAREDCO: The budget is very progressive and comprehensive and has considered all aspects of the overall development and economic growth of the nation. A reduction in income taxes will indirectly lead to more saving and more investment and purchases in the housing and real estate sectors. All of the above factors should lead to more job creation, more investment and buying and progress for the real estate sector.”

Kaushal Agarwal, Chairman of The Guardians Real Estate Advisory: In the budget, allocations have been made to expand infrastructure, health, education, skills, rural wellbeing and digitization. The government is investing heavily in capital spending to stimulate the Indian economy and create new job opportunities.

Suresh Agarwal, MD and CEO, Kotak Mahindra General Insurance Company: The budget is slightly above middle-class expectations and has a particular focus on women and youth, making it really citizen-centric. To remain the world's fastest growing major economy, this demonstrates the government's intent to improve the purchasing power of taxpayers through income tax rebates, an improved grievance mechanism for direct taxpayers, and capital deductions. of capital gains from investments, while being fiscally cautious in dealing with inflation

Dr. Niranjan Hiranandani, Vice President, NAREDCO: India has judiciously maneuvered through economic and global storms. It adequately addressed India's economic growth by increasing spending on infrastructure investments. This will have a multiplier effect on real estate asset classes such as residential, commercial, industrial and logistics.

Anuj Puri, Chairman of ANAROCK Group: The new measures announced in the budget can certainly help unlock the potential of the Indian economy. However, from a real estate perspective, there were no big direct announcements that could be seen as immediate updates. The 66% increase in the lot for Prime Minister Awaas Yojana is undoubtedly a boost for popular housing, which has declined due to rising input costs and also because buyers in this segment, mainly from the unorganized sector They are still suffering from the impact of the pandemic. .

Shiwang Suraj, Founder and Director of Inframantra: “The Union budget for fiscal year 2023 is very strong and focuses on the progress of the nation, with a focus on increasing economic efficiency and growing infrastructure. The budget increase to Rs 790 crore for Pradhan Mantri Awas Yojana (PMAY) will further empower the real estate sector and end users. The 2023 budget also focused on sustainable development, with climate protection as one of the central themes. We welcome the Finance Minister's focus and drive on job creation and urban development. This will boost the growth of the Indian economy.”

Ankit Alok Bagaria, co-founder of Loopworm, called the Union budget for 2023-24 "short and sweet" and said that the budget would help farmers, established companies and start-ups in the agricultural sector and related agriculture. “INR 60 billion infusion to boost fisheries would greatly help shrimp farming. Reducing feed ingredient import tariffs will help feed manufacturers and contribute to the formalization of livestock, but would result in lower margins for domestic feed ingredient manufacturers. For young start-ups, the Agri Accelerator Fund is a good initiative, but less attention has been focused on supporting growing agri-startups. Funds to support biobased products to promote natural agriculture should boost the biostimulant and biofertilizer industry,” Bagaria said, welcoming the budget. “Significant support for farm credit and significant injections of funds into related agricultural sectors should encourage existing farmers and individuals seeking secondary income sources to establish livestock/poultry/fish/insect farms that would result in the growth of agriculture on non-arable land,” he said. aggregate.

CA Dhaval Jasani, Founder and CEO of ZTI Global, said that the budget did not bring negative news, only positive news, be it for people living below the poverty line, the white collar class and the Indian economy in general. “Capex, which exceeds Rs 10 trillion, or more than US$122 billion, is a major driver for infrastructure development, directly contributing to lower logistics costs and boosting export growth. he added.

Jai Prakash Agarwal, Treasurer, ICAI Dubai Chapter agreed that increasing capex to INR 10 trillion shows the long-term vision of the government in building India's future. “The middle class will be relieved by increasing the base allowance from INR 500,000 to INR 700,000. This is the current investment of the government in India's middle class to shape the future of the country. A bit of disappointment is natural as there is no relief or exemption for NRIs, but he is pleased with India's long-term growth vision,” he added.

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