Budget falls short of NRIs’ expectation on TDS

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


Muzaffar Rizvi


Issac John

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Indian Finance Minister Nirmala Sitharaman, in red, leaves her office for President's house before presenting the federal budget for the financial year 2023-24 in the Parliament in New Delhi on Wednesday. - AP
Indian Finance Minister Nirmala Sitharaman, in red, leaves her office for President's house before presenting the federal budget for the financial year 2023-24 in the Parliament in New Delhi on Wednesday. - AP

Published: Wed 1 Feb 2023, 2:08 PM

Last updated: Thu 2 Feb 2023, 8:46 PM

Non-resident Indians in the UAE welcomed the Indian Budget 2023-24 as an inclusive and future-oriented blueprint to drive the $3.4 trillion economy to its medium-term goal of hitting $5 trillion by 2025-26.

However, most of them voiced their dismay over the budget that failed to address their long-standing demand for a reduction on TDS (tax deduction at source) across asset classes for those who have a source of income in India and are required to pay taxes in the country they reside in.

Finance Minister Nirmala Sitharaman has not even mentioned or acknowledged their contribution to the Indian success story in her budget speech. Indian Diaspora is the largest one in the world, and the remittance from them in 2022 was $100 billion. The UAE was the second largest remittance source market after the US.

Following are excerpts from some of the prominent NRIs on the budget:

Yusuffali MA, chairman of Lulu Group
Yusuffali MA, chairman of Lulu Group

Yusuffali MA, chairman of Lulu Group: I would term it as an “inclusive” budget that has tried to take into consideration all segments of society and different priority sectors. The construction of 50 new airports and the development of water routes are sure to have a major impact on the socio-economic fabric of India and will further boost our position as a dream destination for global businesses and investors. I am sure this budget will further strengthen the Indo-Gulf business relationship and bring in more investments into the country to benefit our economic development and employment sector.

Dr. Azad Moopen, founder chairman & managing director, Aster DM Healthcare.
Dr. Azad Moopen, founder chairman & managing director, Aster DM Healthcare.

Dr. Azad Moopen, founder chairman & managing director, Aster DM Healthcare: The budget has excellent focus on skill development and addresses one of the core challenges that healthcare industry is facing today – shortage of nursing staff, through the announcement to start 157 nursing colleges alongside existing medical colleges. However, the overall impetus for the healthcare delivery sector is missing. We were hoping for an increase in budget allocation for the industry which is essential to fulfil the need gaps. The need to have more hospitals and healthcare facilities in rural and suburban areas to meet the rising demand remains untouched.

G P Hinduja, co-chairman, Hinduja Group: This is a growth-oriented budget with a massive investment push while maintaining fiscal discipline and devoid of any populism that is usually evident in pre-election year budgets. It cements India’s position as “the” investment destination with great policy stability. Focus on capacity building, capital investments, infrastructure push, friendly tax regime will certainly attract global investors.

Joy Alukkas
Joy Alukkas

Joy Alukkas, chairman Joyalukka Group: The proposed capex of 3.3 per cent of GDP in the budget proposal will accelerate the country’s economic growth and job creation. Allocation of Rs 2.20 trillion by way of direct transfer to the farmers and sizable fund allotted to various agricultural/MSME activities will be an impetus to agricultural/MSME sectors. Budget has provided for a strong and macroeconomic environment.

Faizal Kottikollon, Chairman, KEF Holdings
Faizal Kottikollon, Chairman, KEF Holdings

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

Dr. Ram Buxani, chairman of Cosmos-ITL Group: India’s Finance Minister has in no unclear terms said that NRIs don’t mean anything to their motherland. There is not even hollow mention of NRIs in the budget text.

Ram Buxani
Ram Buxani

There will be a lot of appreciation for the inclusive budget otherwise. This year’s budget is the voter’s budget. And NRIs don’t have a vote in their country. Identifying 50 destinations within the country to promote tourism is a great decision. Scrapping old vehicles including ambulances will create a better environment.

Thomas KV, chairman of Thomsun Group: The budget for 2023-24 is a testament to India’s high aspirations to remain the fastest-growing major economy, driven by technology and skill. The move to provide a strong impetus for digitization, skill development, and job creation is critical to driving growth. The new income tax regime is a welcome relief for the vast middle class.

Shamlal Ahamed, managing director, International Operations of Malabar Gold & Diamonds.
Shamlal Ahamed, managing director, International Operations of Malabar Gold & Diamonds.

Shamlal Ahamed, managing director, International Operations of Malabar Gold & Diamonds: The budget has made efforts to drive further growth in the economy while addressing global slowdown and inflation-related concerns. From a jewellery industry aspect, our key recommendation to reduce import duty for gold to cure illegal import has not been addressed and is quite disappointing. We hope that this request will be taken into consideration and addressed in the best possible manner.

Adeeb Ahamed, CEO, LuLu International Exchange
Adeeb Ahamed, CEO, LuLu International Exchange

Adeeb Ahamed, managing director of LuLu Financial Holdings: A balanced budget that takes into account the aspirations of India’s youth and MSMEs. The budget underscores the fact that the way forward is to build a technology and knowledge-based economy. The proposal to adopt an integrated and innovative approach to developing destinations augurs well for the tourism sector.

Kamal Vachani, group director, Al Maya Group, welcomed the UAE Cabinet decision.
Kamal Vachani, group director, Al Maya Group, welcomed the UAE Cabinet decision.

Kamal Vachani, group director & partner, Al Maya Group: The budget is people-friendly as tax exemption has been increased for the income up to 700,000 to benefit the middle-class. This will ensure higher spending by the households, leading to a boost in aggregate demand. Reduction of custom duty on parts of open cell (TV), mobile phones, camera lens, etc. would go long way in enhancing India’s export of the product.

Thumbay Moideen, founder president, Thumbay Group: The overall outlook of the budget is positive and growth-driven, focusing on important sectors that will surely be the key driving force in the growth of India’s economy, and achieving the aim of the $5 trillion mark by 2025. The key highlights for us have been the importance given to green growth, youth empowerment, allocation to health research, and setting up of AI centers, thus making India a shining example of a global hub of excellence.

Mohan Valrani, chairman, Arcadia Education, co-founder & mentor at Al Shirawi Group: This year’s budget is a significant one continuing the trend towards more productive capital expenditure which has increased to 10 trillion, 33 per cent up from last year which is more than double from the year 2021. 50-year interest-free loans to state governments with a significantly enhanced outlay of Rs1.3 trillion will create lots of jobs. Tax benefit to middle-class is a welcome move, however, the budget has not much for the NRIs.

Dr. Dhananjay Datar, chairman Al Adil Group: There is a massive tax benefit for the middle class which means more disposable income. This in turn will boost consumption and will revitalise the economy. The setting up of the Agriculture Accelerator Fund will encourage start-ups in rural areas and is aimed at bringing innovative as well as affordable solutions to farmers, on the challenges they face.

Dixit Jain, The Tax Experts, DMCC: For NRIs, I was expecting more relief but nothing much for them. One of the factors I liked was the clarification on DTAA (double taxation avoidance agreement) benefit on income from units of Mutual funds where now NRIs can apply for TRC (tax residency certificate) and get the benefit straight away. Overall a good budget.

Dr Lal Bhatia, chairman, Hilshaw Group, said India's budget for 2023-24 offers some relief to the middle class, but it fails to address pressing issues such as unemployment and inflation.

"It does cover key areas of agriculture, manufacturing, and services, emphasizing long-term investments and tech advancement. It also promotes energy transition and electric mobility. Still, it fails to support the struggling renewable energy sector by excluding it from the Project Import Scheme," he said.

"The budget reflects a progressive tone with plans to set up AI and 5G centres to increase disposable income through tax reforms. However, it does not address the industry's hope for an extension of the reduced corporate tax rate for new manufacturing," he said.

Neelesh Bhatnagar, managing director, NB Ventures: A focused budget that will drive the economy to a 7.0 per cent GDP growth target. The government will primarily focus to boost infrastructure with 50 new airports and a massive boost with an allocation of Rs 2.4 trillion for railways. Senior citizens have benefitted from an increased limit up to 30 Lakhs for deposits. Startups have been encouraged to carry forward losses for 10 years with a special focus on AgriTech startups.

James Mathew, CEO & managing partner, UHY James Chartered Accountants: The budget reinforces India’s positive economic sentiment with inclusive reforms, pro-business initiatives, sustainable growth opportunities and people centric tax regimes have been brought into play. It cements India’s economic competitiveness through measures that will catalyse the business landscape.

Raju Menon, chairman and managing Partner, Kreston Menon: The budget focuses on widening the scope of economic growth by boosting key areas like infrastructure and manufacturing and strengthening India’s march toward a technology-driven and knowledge-based economy. Unless Capex reaches 10 per cent of the GDP, an aggressive growth cannot be driven. This is a middle-class and youth friendly budget with the income tax revisions, job generation initiatives and support for start-ups and education sector.

Naveen Sharma, former chairman of ICAI Dubai: A growth-oriented budget which extends earlier initiatives, breaks newer grounds and it will certainly help India to become one of the three largest economies. Increase of capex is a bold move to create jobs. Emphasis on tourism, technology and pushing innovation in agriculture will help India in the years to come.

Sajith Kumar P K, Group CEO & MD, IBMC Financial Professionals Group: The budget is key to global economies to identify opportunities in India. The budget has given seven priorities for reaching 7.0 per cent economic growth during 2023-24. Indian Stock Markets accepted the budget positively. Sensex Index crossed 60500 points. The budget is more focused on inclusive economic growth by supporting state governments.

Anish Mehta, former chairman of ICAI Dubai: It seems that this budget is on the principle of “sharing and caring.” It has good components for women, senior citizens and common middle class man and corporates (SME’s and start ups). This budget is an attempt to bring more and more people to the new tax regime. This will boost small savings in a big way. Stock markets are rejoicing this budget.

Bharat Bhatia, founder & CEO, Conares: The government’s commitment to investing in critical transport infrastructure projects is exciting. The revitalization of 50 airports and investment of Rs750 billion in 100 transportation projects, as well as Rs100 billion per year for urban infrastructure development fund is a massive boost to the construction and steel industry and is a significant step towards creating a stronger and more resilient India. This is an investment in India’s future and will drive economic growth for years to come.

John Varghese, managing partner of HLB HAMT: The Indian government's efforts to simplify the tax payment process is an excellent step in the 2023 annual budget. Reducing the time, it takes to process income tax returns from 93 days to just 16 days is a fantastic improvement that will make the process more efficient and save time. This also makes it easier for citizens to fulfil their tax obligations, as the government plans to introduce updated common IT return forms and enhance the grievance resolution process.

Adam Abdul Nazar, deputy CEO, Life Healthcare Group: The strong focus on research for pharmaceuticals and medical devices is welcome as it is a step in the right direction for modernizing healthcare in India. We are glad that the government understands the value of promoting the manufacturing and retail of domestic pharmaceutical and medical products. These developments can propel India's retail pharmacy sector, transforming the country into a global hub for pharmaceutical products. This provides a promising vision for India’s healthcare future.

V Shamsudheen, director Barjeel Geojit Financial Services: Highlights of the budget include the emphasis given to the weaker segment of the population. The four points given in the budget are empowering women, an action plan for tourism, an initiative for artisans, and green growth. The importance given to village connectivity to facilitate the movement of agro products will reduce the perish of agro products and get a better price to the farmers. Another support given to them is encouraging the usage of renewable energy, adding to the increased capex for rural education and health care.

Parveen Jain, chairman, NAREDCO: The Budget is quite progressive and comprehensive which has taken into consideration all aspects for an overall development and economic growth of the nation. Reduction in income taxes will indirectly lead to more savings and more investments and buying in Housing and Real estate sector. All the above factors shall lead to more job creation, more investment & buying, progression for the real estate sector.’

Kaushal Agarwal, chairman, The Guardians Real Estate Advisory: The budget has made allocations to expand infrastructure, healthcare, education, skilling, rural welfare, and digitalization. The government is investing heavily in capital expenditure to invigorate the Indian economy and create new job opportunities.

Suresh Agarwal, MD & CEO, Kotak Mahindra General Insurance Company: Taking it a notch above the expectations of the middle class, the budget has a special thrust on women and youth which makes it truly citizen-centric. To remain the fastest growing major economy in the world, it demonstrates the government’s intent to improve a taxpayer’s purchasing power through income tax rebates, enhanced grievance redressal mechanism for direct taxpayers, and capital deductions from capital gains on investments, while being overall fiscally prudent to address inflation.

Dr. Niranjan Hiranandani, vice chairman, NAREDCO: India has prudently maneuvered global and economical storms. It has aptly addressed the economic growth of India by augmenting the capital expenditure outlays in infrastructure. This will have a multiplier effect on real estate asset classes like the residential, commercial, Industrial, and Logistics sector.

Anuj Puri, chairman – ANAROCK Group: The new measures announced in the budget may certainly help unleash Indian economy’s potential. However, from a real estate point of view, there were no major direct announcements that could be seen as immediate booster shots. The enhanced allocation for PM Awaas Yojana by 66 per cent is certainly a boost for affordable housing, which was flagging due to increased input costs and also because the buyers in this segment, mostly from the unorganized sector, were still reeling under the impact of the pandemic.

Shiwang Suraj, Founder & Director of Inframantra: “The Union Budget for the fiscal year 2023 is quite robust and centered around the nation’s progress, with a focus on increasing economic efficiency and infrastructure growth. Increasing the budget to Rs790 billion for the Pradhan Mantri Awas Yojana (PMAY), will further strengthen the real estate sector and end users. In the budget 2023, there was also an emphasis on sustainable development with climate action being one of the central themes. We welcome the Finance Minister’s focus and impetus on job creation and urban development. It will spur the growth of the Indian economy.”

Ankit Alok Bagaria, Co-Founder, Loopworm, termed the Union Budget 2023-24 “short and crisp” saying that the budget would help farmers, established businesses, and startups in the agri & allied agriculture space. “The Rs60 billion infusion to promote fisheries would help shrimp farming the most. Decreasing import duties on feed ngredients are going to help the feed manufacturers and help formalise animal agriculture but would lead to reduced margins for domestic feed ingredient manufacturers. For young startups, the agri accelerator fund is a good initiative but there was less focus to promote agri-startups at the growth stage. Funds to support bio-based products to promote natural farming should boost the plant Bio-stimulant & Bio-fertiliser industry,” stated Bagaria, while welcoming the budget. “Significant agricultural credit support and significant fund infusion in allied agri sectors should promote existing farmers and people looking for secondary income streams to set up livestock/ poultry/ fish/ insect farms which would lead to a growth in non-arable land agriculture,” he added.

CA Dhaval Jasani, founder and CEO, ZTI Global said the budget has no negative news, all positive, be it for the people below the poverty line, the salaried class and the Indian economy at large. “Capex, exceeding Rs10 trillion, that is more than $122 billion, is a major boost for infrastructure development, directly contributing to reduction in logistics costs, propelling further export growth,” he added.

Jai Prakash Agarwal, treasurer, ICAI Dubai Chapter agreed that the increase of capital expenditure to Rs10 trillion shows the long-term vision of the government in building the future of India. “Relief is provided to the middle class by increasing the basic exemption from Rs500,000 to Rs700,000. This is the investment of government today in the middle class of India to shape the country’s future. A little disappointment is natural as no relief or exemption to NRIs but happy with the long term growth vision of India,” he added.

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