India Inc welcomes focus on growth, capex, sustainability
Emphasis on green and sustainable development, coupled with efforts on ‘ease of doing business’ draws praise
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MUMBAI :The Union budget for FY23 was warmly welcomed by leaders of India Inc., who appreciated its push for strong economic growth through a substantial increase in government spending.
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The focus on green and sustainable development, coupled with efforts on ‘ease of doing business’, was also welcomed by corporate India.
“The budget presented by FM Nirmala Sitharaman builds on the excellent budget last year, continuing the trend towards more productive expenditure. The budget is consistent with our honourable PM Narendra Modi’s vision of making India Atmanirbhar: a digital superpower, a sustainability leader and a healthy nation. This statement of intent is clearly supported by a plan for the future, and backed by allocations—specifically in the areas of infrastructure, digital transition, planet resilience, education and health—to support Indian ambitions," said N. Chandrasekaran, chairman, Tata Sons.
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The outlay for capex has been raised by 35.4% from ₹5.54 trillion in current fiscal year to ₹7.50 trillion in FY23. The FM also announced a slew of infrastructure projects under the PM GatiShakti programme across roads, multimodal logistics parks and railways.
“One of the strongest parts of this budget is the government’s renewed commitment with its continued investment in strengthening the country’s infrastructure. The proposal to fund infrastructure through PM Gati Shakti, Public Private Partnerships, etc. will mark the escalation of economic prosperity. Overall, the budget seems to have given a booster dose to facilitate faster economic growth of the nation," said Virendra D. Mhaiskar, chairman and managing director, IRB Infrastructure Developers Ltd.
Kaku Nakhate, president and India country head, Bank of America, added that by announcing a whopping ₹10.7 trillion capex across central, state governments and private sector, the budget makes a definitive statement—a higher fiscal deficit is needed to drive growth and create jobs. “The budget builds on last year’s themes to ensure secular and sustainable growth," she said.
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The budget also introduced ‘Ease of Doing Business 2.0’, which will see further measures to reduce the compliance burden on India Inc. The FM said the government has reduced over 25,000 compliances and repealed over 1,486 laws in the last few years.
She said the government will follow the idea of ‘trust-based governance’.
“Delighted to see that the next phase of Ease of Doing Business reforms will be centered on trust-based governance. I believe the time for moving to self-certification across the board has come," said Anil Agarwal, chairman, Vedanta group.
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“Budget: trust based governance to build atmanirbhar bharat. Reposes faith in taxpayers, entrepreneurs, investors. Build an open, digital and inclusive India with a 25 year vision," Uday Kotak, chairman of Kotak Mahindra Bank Ltd, wrote on Twitter.
The Budget gave a strong push to green and sustainable development and a boost to related technologies.
Increased allocation for PLI for solar modules, plans for a policy on battery swapping, plans to develop circular economies for 10 sectors and plans for transition to a carbon neutral economy figured in the budget speech.
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“Budget 2022 lays the groundwork for India’s ambition to be a net zero country by 2070. It is great to see that the government has very firmly put energy transition and clean energy at the heart of India’s economic growth and looks to address some of the most challenging aspects of this transition," said Sumant Sinha, chairman and chief executive officer (CEO) of ReNew Power.
“The additional outlay of ₹19,500 crore for solar manufacturing will help the renewable industry expand rapidly. We expect Ireda, which has been capitalized recently, to move fast and issue letters of award to companies that have bid under the PLI scheme. The revocation of anti-dumping duty on steel will reduce the cost of modules hugely and ties in well with incentives for locally incorporated manufacturing entities, which can now commence manufacturing by 31 March 2024," he added.
According to Neeraj Akhoury, CEO India, Holcim and CEO and managing director Ambuja Cements, the budget can be termed as progressive in enabling India to transition to a green and digital economy.
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“Along with the focus on clean mobility and green energy, the proposed measures and reforms for boosting hydro and solar power capabilities of India will help the nation to achieve the targets of 500-gigawatt renewable energy by 2030. The introduction of Sovereign Green Bonds in public sector projects is the right direction in financing the decarbonizing initiatives," he said.
Many industry leaders also pointed out various gaps in specific proposals and the lack of substantive announcements in certain areas.
“The budget lacks the specifics of rebooting private sector investments in the sector. The budget could have laid out time-bound disinvestment and asset monetization targets, a PPP structuring facility to reignite private sector interest, and a long-standing demand for creating an ‘independent institutional structure’ to resolve commercial issues around PPPs. However, the budget shied away from such measures. Focus largely has been around much increased government spending," said Manish Aggarwal, Partner and Head-Infrastructure and Special Situations Group, KPMG in India.
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Others felt the budget missed out on doing more to give a boost to real estate, given its important role in the economy. “The government could have given further boost to the housing sector given the strong multiplier effect the sector has on the economy. The housing sector has made a substantial recovery from the pandemic lows and due attention here would have gone a long way in sustaining the growth momentum," said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
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