Union Budget is an annual exercise of Government of India to introduce new economic policies, announce new social and infrastructure projects and propose changes in direct and indirect taxation. World Trade Center Mumbai in association with All India Association of Industries organized an interactive webinar to explore the implication of the Union Budget 2022-23 on trade, industry and the general public   

The webinar was addressed by Ms. Anubhuti Sahay, Head, South Asia, Economics Research, Global Research, Standard Chartered Bank, Mr. Firoze B. Andhyarujina, Senior Counsel, Supreme Court of India and Mr. Neeladri Chakrabarti, Consultant, Shardul Amarchand Mangaldas & Co.

Ms. Sahay welcomed the Budget for its emphasis on capital investment, which will have a multiplier effect on the economy in the next 3-5 years. At the same time, she expects the government borrowing to increase bond yields and interest rates. “We expect interest rate in the economy to rise in the coming months because of higher than expected government market borrowing in 2022-23, and also because of likely policy rate hike by Reserve Bank of India (RBI). Normalization in policy rates and higher government market borrowing are likely to push 10-year government bond yield to 7% by March 2022 from around 6.8% now. This will also increase cost of borrowing for private sector.”

Ms. Sahay pointed out that the Indian economy is expected to grow at 8% in the financial year (2022-23) and the announcements in the Union Budget will not impact this forecast.

She expects the Indian rupee to depreciate to Rs. 77.5 per US Dollar by December 2022 from the current level of around Rs. 75 per US Dollar as foreign investors start withdrawing their investment into Indian market in response to the reversal of monetary policy in USA.

In his remarks, Mr. Andhyarujina shared his views on the various amendments carried out in the Income Tax Act through the Finance Bill 2022. He pointed out that there may not be many taxpayers who would opt to avail the provision for filing updated return as it comes with a hefty penalty of 25% in the first year and 50% in the following year. Also, the provision does not allow taxpayers to revise their returns for claiming fresh refunds, setting off unreported losses or exemptions as it is applicable only for declaring higher tax liability. Mr. Andhyarujina also touched upon several other amendments in Income Tax Act and their impact on trade, industry and common man.

Speaking on this occasion, Mr. Neeladri Chakrabarti, Consultant, Shardul Amarchand Mangaldas & Co. praised the budget for bringing the concept of trust-based tax compliance system. The budget has rightly promoted ease of doing business by automating procedures for import of capital goods on concessional import duty. He expects the provision to extend the various import duty exemptions under free trade agreements (FTAs) to promote local manufacturing in sectors which are dependent on imports of intermediate goods from FTA countries.

Earlier in his welcome remarks, Dr. Vijay Kalantri, Chairman, MVIRDC World Trade Center Mumbai and President – All India Association of Industries lauded the government for announcing a balanced budget. At the same time, Dr. Kalantri opined that the budget could have introduced schemes to promote women entrepreneurs, farmers, MSMEs and common man.

Ms. Rupa Naik, Executive Director, MVIRDC World Trade Center Mumbai, presented vote of thanks.