In his opening remarks, Mr. Vivekanand, Director (Finance, taxation and Legal), FIPI, welcomed all the panelists during the budget analysis session organized by FIPI. He said that the Budget presented by the honorable Finance Minister is a growth-oriented budget with a long- term view of social and infrastructure development. He spoke about some of the key announcements highlighted in the Economic Survey and Union Budget 2023-24. He mentioned that India is on a growth trajectory as India’s GDP is projected to grow in real terms by 7% in 2022-23 and 6-6.8% in 2023-24. He highlighted that the growth of the economy will be supported by private consumption, higher capex on infrastructure expansion, credit growth to small businesses and easing of regulations. He said that the Budget focused on 7 pillars viz. Saptrishi – Inclusive Development, Reaching the Last Mile, Infrastructure and Investment, Unleashing the Potential, Green Growth and youth Power. 

He further added that FIPI through its Pre-Budget Memorandum has been continuously submitting its recommendations to Ministry on critical issues like, inclusion of five petroleum products under the ambit of GST, exemption of customs duty on import of LNG, etc. among many others issues.  He assured the industry members that it will continue to highlight these issues at relevant forums in the future as well.

Setting the context for the session, Ms. Neetu Vinayek, Partner, EY, presented the Pre-budget survey analysis and discussed about the industry expectations from the Budget. She then presented the key takeaways of the Economic Survey as well as mentioned the developments related to Direct tax amendments.  She welcomed Govt’s decision to increase capex to Rs. 10 lakh crore as it will attract more private investment, promote job opportunities and thus attract economic growth. She further said that with fiscal deficit targeted at 6.4% in FY 23, the increase in government investment will have a positive impact in terms of demand generation and employment opportunities in various sectors. She said that currently govt’s focus is primarily on clean energy transition and welcomed Govt’s initiatives on spending Rs. 35000 crore for priority capital investments towards energy transition which would help in attaining net zero initiatives.

Speaking about direct taxes, she talked about the tax incentives available to start ups and MSMEs who are important part of our ecosystem as service and technology providers. She further mentioned about section 28 and section 194 R which included benefits arising from business or exercise of profession in cash or in kind will be taxable from 1st April 2023. Further, she highlighted that budget included the cost of acquisition and improvement of capital assets, being any intangible asset shall now be considered as nil.

Ms. Uma Iyer, Partner, EY highlighted the provisions made under the indirect tax. She highlighted that the input tax credit would be denied in relation to CSR expenses. Further she mentioned developments such as - time limit prescribed for filing returns beyond due date – maximum three years from due date; Goods and Services Tax Network portal becomes authorized to share consent-based information to other notified systems; among other developments.

The main highlight of the session was the ‘Panel Discussion on Union Budget 2023-24, focusing on the outcome for oil and gas companies in the new budget. The panel comprised of Mr. Vivek Tongaonkar, Executive Director- ONGC, Mr. Sanjay Kaushal, Chief Financial Officer- IOCL, Mr. Hitesh Vaid, Chief Financial Officer- Cairn Oil & Gas, Vedanta Ltd and Mr. Kartikeya Dube, Chief Financial Officer- Reliance BP Mobility Ltd. The panel discussion was moderated by Ms. Neetu Vinayek, Partner, EY.

During the course of the discussion, the panelists highlighted the key positive outcomes of the budget in terms of allocation of capex towards energy transition which will ultimately help in attaining the net zero objectives. The panelists welcomed the incentives provided to new sources of energy in the Union Budget in order to lower carbon emissions and move towards green energy transition. The excise duty concession provided to CBG blended with natural gas, the launch of National Green Hydrogen Mission, Viability gas funding for Battery Energy Storage Systems with capacity of 4,000 MWH, and 500 new ‘waste to wealth’ plants to be established are all welcome moves to promote clean energy. Further, to ensure green mobility, the government has decided that custom duty would be exempted from capital goods and machinery required to manufacture lithium-ion cells for batteries used in EVs and also extend subsides on EV batteries for another year.  This will ensure further surge in the adoption of EVs in the country.

The panel had a consensus on government providing more fiscal incentives/capital subsidy towards oil and gas sector in order to attract private sector participation and thus help to meet the target of green energy initiatives as laid down by our honorable Prime Minister. Further the panel had a consensus on inclusion of all petroleum products under GST in order to avoid losing significantly in terms of input tax credits due to its non-inclusion under GST. The panelists believed that for meeting Govt’s vision of India becoming a gas-based economy, a call has to be made by GST council to bring gas under the purview of GST soon.  

Delivering the closing remarks at the session, Mr. Praveen Rai, Deputy Director, FIPI, said that with Govt spending on infrastructural development of Rs. 10 lakh crores, and focus towards green energy, Indian economy can achieve its targeted growth of 7% by 2023. In his concluding remarks, he thanked all the panelists and the subject matter experts for providing their insights on the Union Budget 2023-24 and its implications on the oil & gas industry and the economy as a whole.  

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