The upcoming Union Budget will be the last full-year Budget from the current government ahead of the Lok Sabha elections due in early 2024. The key expectation at a macro level from the finance minister is to maintain the growth path while keeping fiscal deficit and inflation in check.
Those from Gen-Z are hoping that the government has some good things in store for them. They are looking at Budget 2023 with greater expectations than ever before so that they can put the year gone by behind them.
Here are some of the expectations that the Gen-Z has from the upcoming Budget to be presented on February 1, 2023:
A. Clarity on tax on Virtual Digital Assets (VDA):
Gen-Z is more inclined to engage in evolving technologies and complex financial instruments, like crypto assets, which may be disapproved by existing policymakers due to a lack of interest or understanding. It, thus, becomes important for the lawmakers to come out with a proper regulatory and tax framework for such VDAs. The method of computing the fair market value, costs, taxable income, reporting requirements, etc., need to be defined clearly by bringing a proper legal framework for the cryptocurrencies.
B. Incentive to EV Buyers:
The EV industry in India is picking up pace, given the need for renewable energy and green vehicles in the personal mobility department. Millennials and Gen Z are more conscious about sustainability, and the need and demand for EVs are more than they have ever been in India, only growing by the day.
Incentives introduced by the government through previous Budgets must be continued, like the deduction under section 80EEB is available only for loans sanctioned by financial institutions between 1st April, 2019 to 31st March, 2023. The government should consider extending this timeline till 31st March, 2025. Further, to boost the use of EVs, the government may also consider allowing this deduction to individuals who purchase EVs with their own funds.
C. Encouragement to New Home Buyers:
The Budget 2019 had introduced an additional deduction of INR 1.50 lakh u/s 80EEA for the first-time home buyers for the home loans taken between 1st April, 2019 and 31st March, 2022. To promote more investment habits among the Gen-Z, the government must extend the benefit u/s 80EEA till 31st March, 2025.
D. Increase in Basic Exemption Limit:
At present the basic exemption limit is capped at INR 2.50 lakh and such limit has not been increased since 2015 where the limit was increased from INR 2 lakh to INR 2.50 lakh. Keeping in view the increasing cost of living, rising inflation and the lingering effect of the global slowdown, the Budget 2023 must increase the basic exemption limit to 5 lakh.
E. Greater Push for Startups:
Many from the Gen-Z have an entrepreneurial mindset and are keen on starting their own business. While several incentives and measures have been taken in recent times to encourage startups, there is hope that the government would strengthen the sector further. Among other things in the wish list, the Gen-Z expects that there will be more focus on encouraging investors, simplifying compliance norms for startups, further tax breaks and relaxations to ease their worry over losing their 'startup' status.
F. Increased Deduction Limits
A higher deduction under section 80C, 80D or a higher standard deduction would encourage the Gen-Z to make more investments, take life & health insurances and ultimately have more savings in hand.
G. Cheaper Travels
Millennials & Gen-Z, who love to travel, have had to keep their wanderlust under check in the couple of years gone by. They are now keeping their fingers crossed for cheaper travel in the post-pandemic world so that they can make up for the lost time. The hospitality and aviation sectors are among the most badly hit by the pandemic. Avid travelers are hoping that the government may announce some relief measures to give these sectors the much-needed boost.
H. Protection against Layoffs
Gen-Z and millennials are afraid of mass layoff. A significant number of Gen-Z works in start-ups or in sectors which are hit by the global slowdown like the IT sector. There is news of mass layoffs by companies including global giants, every other day. To give assurance to the Gen-Z and people affected by such layoffs, the government must consider to provide some kind of protection by allocation of funds to employment generating schemes of the government or introducing insurance / social schemes to protect in a period of unemployment. The provisions in the Code of Social Security to bring the gig and platform workers, people in the unorganised sector under the social security umbrella, is a good move and it is hoped that the same can be implemented.
The Gen-Z is keenly looking forward on what the finance minister has in store for them and whether the Budget 2023 will meet their expectations or not.
Akhil Chandna, Partner, Rajashree Sarna, Director and Pooja Lara, Manager – Grant Thornton Bharat.