Budget 2023 will be the last full budget before India heads into a crucial general election in 2024. Deloitte India’s Gaurav Gupta shared his expectations on what is being largely described as a populist budget.
Speaking to ET Now, Gupta said, “There is some level of saturation in existing cities, there is a need to look at physical, digital and talent infrastructure in existing and new cities. This will help attract more organisations into India and it will also help expedite the set up time which currently ranges from anywhere between 6 to 9 to 12 months. There is a need to bring down that time.”
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“Related to that is the input tax credit that is available on construction of immovable property. If that is made available, hopefully that will drive further investment into expansion of current capacities or bringing in more Global Capability Centres (GCC) capacity into India,” he said.
Gupta said that the second thing that the government can potentially look at is around safe harbor and APA rulings. “Since the time safe harbor came to existence in 2017, there have been few GCCs that have opted for it. The reasons are two-fold – one, it is considered that the rates are higher than benchmark and second, from a coverage perspective it is not available to all the GCCs. So the government can actually look at expanding the coverage and relook at the safe harbour rates to see how much closer to the benchmarks it can be with some premiums which can be there for the government. At the same time, the government can also look at fast-tracking the APA process so that there is a defind timeline in which some of this gets done,” he said.
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Gupta noted that currently GST refund is not available on capital goods that actually go into exporter services. This is the third thing that can be done from the government budget perspective, Gupta said as that creates some working capital issues for the GCCs.
“Overall, GCCs are poised for good growth in the future, and clearly from the government perspective there are things it can do to accelerate that growth essentially around infrastructure, safe harbour and APA policies as well as looking at some input tax and GST refunds being made available to GCCs that will help drive further growth,” he concluded.
