Budget falls short of NRIs’ expectation on TDS

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: 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: 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, 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: 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.

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: 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, 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 & 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.

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.