Budget: Budget 2023 News Highlights: Centre to tap brakes on capex growth, key subsidies on February 1, according to new poll

• HR industry expects roll out of labour codes, focus on formal job creation in Budget 2023
• Centre set to borrow record Rs 16 lakh crore in fiscal 2023/24
• New Delhi to tap brakes on capex growth, key subsidies
• Kerala Opposition leader hopes Centre will allocate more funds for MGNREGA in Union Budget

The Society of Manufacturers of Electric Vehicle (SMEV) has said the momentum in the electric vehicle industry has been building positively with an increase in demand for EVs and requested levying a uniform 5 per cent GST for all EV spare parts.

SMEV has said the government had shown its commitment to promoting and prioritising electric mobility with its initiatives, such as the FAME scheme, which emphasizes demand creation.

However, it said other initiatives like research and development for localisation, supply-side support, charging infrastructure, and consumer awareness programmes could not take off due to the nascent stage of the industry — the non-availability of resources to attract investment and Covid-19.

SMEV said it’s important at this juncture that the country focuses on building a strong EV ecosystem that could make this industry self-sustainable.

Leader of Opposition in the Kerala Assembly V D Satheesan on Monday expressed hope that the Central government would increase the allocation for the rural job scheme, MGNREGA, in the upcoming Union Budget as it is key to stimulating the country’s economy.

Accusing the BJP-led government of not taking steps to address the issue of price rise, Satheesan said the common people were struggling to make ends meet.

“The price hike is too much…especially in the oil and gas sector. The common people are struggling to meet their two ends. So, we expect some announcement including some Direct Benefit Transfer (DBT) schemes (to ease their burden)”, he told PTI here.

He said MGNREGA is an indirect DBT scheme, which is being neglected by the BJP government.

The Aluminium Association of India (AAI) said that high duty on certain inputs for aluminium production should be rationalised or removed to boost the domestic industry’s cost competitiveness.

Representatives from the aluminium industry are seeking the government’s intervention for supportive measures amid challenges posed by rising foreign imports and surging costs.

According to the association, calcined pet coke, which is a key input for the aluminium production, attracts high duty and that should be either rationalised or removed completely.

At present, nearly 20 per cent of the cost of producing aluminium arises from government taxes and this is stifling the development of the aluminium sector, AAI, which represents the country’s top aluminium producers, said in a statement.

The organized gold jewellery retailers are urging the finance minister to cut gold import duty in the Union Budget 2023-24 as any reduction in duty will help curb gold smuggling, boost exports of gems and jewellery, and empower organised jewellery retailers to cash in on the surging domestic demand. Emphasizing the industry’s views, Malabar Gold & Diamonds founder and chairman M.P. Ahammed says India needs a robust gold policy that rationalises import duty and the gold retailers are expecting a favourable decision from the Centre in this regard.

“Liberalizing imports will boost the organised domestic jewellery business,” says Ahammed. He believes that the domestic gold demand, especially in rural India, is robust and rationalising import duty and standardising domestic gold prices across the country will further increase consumption.

Indian government bond yields were expected to open marginally higher on Monday ahead of a heavy state debt supply this week, while sentiment remained cautious ahead of the Union budget announcement due on Feb. 1.

The benchmark 10-year yield could move in the 7.32%-7.37% range, a trader with a private bank said. The yield ended higher at 7.3478% on Friday and rose five basis points last week.

“While the market was expecting states to borrow less than half of their planned quantum, they have come out with a very heavy borrowing plan for the week which will weigh on the sentiment,” the trader added.

Indian states aim to raise 256.50 billion rupees ($3.17 billion) through the sale of bonds on Tuesday. Although the quantum stays below the planned 302 billion rupees, it is the highest in three months.

Rajya Sabha MP from Punjab Sanjeev Arora has drawn the attention of the Union Finance Minister Nirmala Sitharaman towards a matter which has affected the working and survival of spinning mills in India, especially Punjab.

He has written to Finance Minister regarding imposing of Anti-Dumping Duty (ADD) on Polyester Spun Yarn (PSY) originating in or imported into the country from ASEAN (Association of Southeast Asian Nations) under the Free Trade Agreement (FTA) countries Indonesia and Vietnam.

In a letter addressed to the Sitharaman, Arora said, “Through various forums and platforms, I have been receiving appeals to impose anti-dumping duty on import of polyester spun yarn (PSY) under ASEAN Free Trade Agreement (FTA) as this will provide a level playing field for Indian manufacturers.”

He further said that it is concerning because PSY import by India has increased by 943 per cent during the past five years, and imports from Vietnam alone have increased by 88 times.

The Indian government is set to tap the brakes on a torrid pace of capital investment growth in the coming fiscal year as a slowing economy limits spending power by weakening tax revenue, according to a Reuters poll of economists.

Food and fertiliser subsidies that help two-thirds of India’s 1.4 billion people will also be scaled back, according to the survey.

Prime Minister Narendra Modi’s government has more than doubled capital spending since fiscal 2019/20 in a bid to make India a more attractive destination for global manufacturing. But private investment has lagged New Delhi’s lead for about a decade.

Now, that robust pace of government investment is set to slow to barely half its previous rate in the fiscal year to March 2024, according to the Jan. 13-20 Reuters poll of 39 economists.

The Indian government will borrow a record Rs 16 lakh crore ($198 billion) in the fiscal year to March 2024, according to a Reuters poll of economists, who said infrastructure spending and fiscal discipline ought to be its highest budget priorities.

The federal government’s gross indebtedness has more than doubled in the past four years as Prime Minister Narendra Modi’s government has spent heavily to cushion the economy from the effects of the COVID-19 pandemic and to provide relief to the poor.

Lok Sabha Speaker Om Birla on Friday refuted media reports on President Droupadi Murmu’s address in the new Parliament building, and said that the address of the President will be held in the existing building of the Parliament as the new building is still under construction.

“The New Parliament Building is still under construction. During Budget Session, the Hon’ble President will address Members of two Houses in the existing Parliament House Building,” the Lok Sabha Speaker said in a tweet.

The Budget Session of Parliament is likely to begin on January 31 and is expected to conclude on April 6 with a recess in between.

The session will start with an address by the President to the joint sitting of the Lok Sabha and Rajya Sabha in the Central Hall of Parliament.

This will be the first address to the two Houses of Parliament by President Murmu since her elevation to the top post in July last year.

The Travel and Tourism industry has sought assistance from the government in the upcoming budget in enhancing the structural transformation that is needed to build a stronger, more sustainable and resilient tourism industry.

Rajesh Magow, Co-Founder and Group CEO of MakeMyTrip said that the Indian travel and tourism industry has shown great resilience, domestic leisure travel has recovered well past pre-pandemic levels, though the long-haul international travel still lags.

At this crucial juncture, the industry needs support from the government to ensure that it continues to be the one of the foremost employers in the country.

“With India’s focus on becoming a digital economy, the disparity between offline and online bookings should be done away with to motivate all travellers to embrace digital India at the grass-root level. Currently, the customer pays a 5 per cent GST charge when booking a non-AC bus through an online platform. This charge is zero for an offline booking. The disparity is similar in the case of an online booking of unregistered hotels and homestay,” he said.

The Human Resource industry anticipates various measures from the upcoming Budget 2023, that will be beneficial for employees, the employment process, for job development and will address the skill-gap challenge in the country.

The Indian economy is on the road to recovery after the Covid-19 pandemic significantly affected the country’s economic growth. Industry players are hoping that the ensuing budget will provide a much-needed boost to the HR sector that will help the industry to get back on track.

According to leading HR services provider Randstad India, the broad industry asks for the HR sector is the roll out of labour codes, focus on formal job creation, industry Status for Staffing Industry and enhancing skilling initiatives for the youth.

From April 1, all vehicles owned by central and state governments, including buses owned by transport corporations and public sector undertakings, that are older than 15 years will be de-registered and scrapped, according to a notification by the Road Transport and Highways Ministry.

The rule shall not apply to the special purpose vehicles (armoured and other specialised vehicles) used for operational purposes for the defence of the country and for the maintenance of law and order and internal security, the notification said.

“Disposal of such vehicles shall, after the expiry of the fifteen years from the date of initial registration of the vehicle, (should) be ensured through the Registered Vehicle Scrapping Facility set up in accordance with the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021,” it said.

The upcoming Union Budget should not only create a roadmap for sustainable growth in the logistics sector but also incentivise the industry to adopt sustainable practices, operators said on Thursday.

Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget 2023-24 in the Lok Sabha on February 1.

FedEx Express Senior Vice-President Middle East Indian Subcontinent and Africa (MEISA) Operations Kami Viswanathan in a statement said, “We recommend the implementation of zero rating of Goods and Services Tax for all international transportation services.

“Most of the international GST/VAT legislations ‘zero-rate’ international freight transportation services. This would facilitate trade and align India with international tax practices as well as reduce logistics costs.”

Industry body Ficci has sought an increase in the import duty on aluminium and aluminium products to at least 12.5 per cent in the upcoming budget 2023-24, stating that the move will help curb dumping of aluminium products and encourage growth of the domestic manufacturing and recycling.

The present import duty on aluminium and aluminium products is 10 per cent. Aluminium, a resilient metal that retains its fundamental properties even when recycled, is widely utilised.

However, in recent years, there has been a visible surge in subpar aluminium imports, especially from China which constitutes over 85 per cent of downstream aluminium imports at present, Ficci said in a statement.

Moreover, India is also seeing aluminium imports from the US, the UK, Malaysia and the Middle East. Several of these nations support their domestic industries with concessions and benefits, including low interest loans and cheaper power tariffs.

International Road Federation (IRF), a global body advocating for safer roads, on Thursday said that it has made a plea to the government to do away with the GST imposed on helmets.

At present a GST of 18 per cent is levied on helmets.

“IRF…in a letter written to the Union finance minister Nirmala Sitharaman has demanded reduction of GST on life saving device helmets for safety of the two-wheeler riders from present 18 per cent to 0 per cent in the forthcoming Union Budget 2023-24,” the global road safety body said.

India accounts for about 11 per cent of the road accident deaths worldwide and the two-wheeler riders, being most vulnerable, constitute almost 31.4 per cent of road accidental deaths primarily due to head injuries.

While domestic steel prices have remained subdued, raw material costs have surged approximately by Rs 6,000 per metric tonnes.

Amid this scenario, Indian steel makers have sought suo moto safeguard in terms of import duty of up to 25 per cent on ad-valorem basis, in the forthcoming union budget.

In a representation to the finance ministry, the domestic steel makers have also sought reinstatement of anti-dumping measures on HR coil, sheets and plates as well as colour coated and wire rods.