As a “Forward Looking Bold Budget”
FM announces Massive CAPEX infusion to boost Infrastructure Development
Welcoming the Union Budget for 2022-23, Laghu Udyog Bharati-Karnataka (LUB-K) today termed it as a “Forward Looking Bold Budget” that boosts macroeconomics of the country, with specific emphasis on the development of core sectors especially the infrastructure, Healthcare, Agriculture, Rural sectors with its huge capex announcement.
Finance Minister Smt. Nirmala Sitaraman presenting her fourth Budget in a row today, sought to address infrastructure development, agriculture distress, creation of jobs, increase disposable income for masses and boost economic growth while at the same time stick to fiscal prudence at the financially constricting times with no extra tax announcement which would have budget the corporates and the common man on the street.
The hallmark of the Finance Minister’s presentation today was a promise of containing Fiscal Deficit to 6.4 percent by FY23 of the GDP without compromising on the spending on development schemes despite more allotment of massive Capex and increasing oil bill which is putting severe burden on the Fiscal Deficit.
Welcoming the Union Budget 2022-23 Mr. Sachin B Sabnis, President LUB-K said: “The Budget has a slew of policy-oriented announcements targeting at boosting infrastructure, increasing consumption, create jobs, promote MSME sector, further integrate digital India, improve social sectors, agriculture sector and investments on core sectors, which we believe will spur overall economic growth as it clearly sets the right tone and tonality for overall economic growth for the next few years”.
Further Mr. Sabnis said: “It is great to see that the Finance Minister has enhanced capex spend on Healthcare, Infrastructure and also bringing a lot of tax stability year or year”. Similarly, the focus on rail and road infrastructure especially, economic and logistic corridors will enhance competitiveness of Indian agriculture by lowering the cost of transportation and better connectivity between production and consumption markets, mainly domestic but also global.”
On the road and railway infrastructure trusts he said: “The sharp increase in budgetary allocation for roads, highways and railways will have a multiplier effect on economic growth over the medium term. This will radically improve seamless transportation of goods and services and mobility in the country. The infusion of massive Capex into the public transport system in the country and government’s dedication to investments into construction of metro lines and in improving public bus service, specifically in the Tier 2 cities has the potential to give a boost to the much-needed employment generation”.
Mr. Sabnis welcomed the extension of ECLGS which will provide a boon to lending to the MSME sector. Simultaneously, the revamp of CGTSME will be an added incentive for banks to extend lending. ECLGS scheme increased and expanded beyond March FY20 to March 2023. He said that this move was along expected lines and will help banks mitigate their risk and also help the MSME sector. Similarly, the PLI schemes in 14 sectors have the potential to create 60 lakh new jobs and additional new production of Rs 30 lakh crore.
Mr. Sabnis said that in a bid to move towards cleaner energy and environment-friendly transportation, the government continues to put efforts in the right direction. “The FM’s new Battery swapping policy to address the charging issue with EVs is a very welcome measure by the Government." He said: “To further promote electrification, the government has come out with a Battery Swapping Policy which also includes the concept of energy/battery as a service. This will help in developing the requisite charging station ecosystem and is positive for the domestic EV space. Government plans to promote private sector to incur required capex in this domain”
On the taxation front Shri Sabnis welcomed the announcements with regard to Import duty cut on certain chemicals, Customs duty exemption on steel scrap extended for another year for small- and medium-sized businesses and revocation of Customs duty on stainless steel, flat products and high steel bars.
Another significant announcement proposed by FM is related to the announcement of Digital Rupee to be issued by RBI starting 2022-23. Sabnis said: “We need to see how it will be implemented on ground and what shape it will take once it comes into force.”
Commenting on completion of 5 years of GST Mr. Sabnis said: “With the implementation of the seamless integration of GST, there is growing confidence in the Government’s ability to take on difficult reforms in India. The improvement in investor confidence is evident from capital flows as foreign investors continue to bet on India as one of the best destinations for investment across the emerging markets.”
Mr. Sabnis also commended the FM for upscaling the Digital ecosystem for skilling and livelihood promotion which will be launched this fiscal.
Touching on the announcements for small enterprises Mr. Sabnis commended the Government for upgrading the Udyam, e-shram, NCS and Aseem portals by inter-linking their scope. They will now perform as portals with live organic databases providing services such as credit facilitation, enhancing entrepreneurial opportunities. He also welcomed the announcement of a fund with blended capital raised under co-investment model facilitated through NABARD to finance startups in agriculture and rural enterprises for farm produce value chain
In conclusion, LUB-K feels that the Budget tries to provide a stable, predictable and consistent policy framework to facilitate long-term investment decisions. The finance minister has done a balancing act by focusing her attention on all sectors without overtly hurting or appeasing any individual section of the society and all the policy initiatives seamlessly integrate with the Aatmanirbhar Mission. Further the budget has all essential ingredients to achieve the desired growth rate of 9.2 percent as projected by several overseas consulting firms.
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