Industry reacts positively to a growth-oriented budget

Finance minister Nirmala Sitharaman presented the Union Budget 2023 on 1 February. The Budget focuses on two key aspects, growth — through a large outlay for capital spending — and fiscal consolidation — by slashing subsidies and spending on the job guarantee scheme.

02 Feb 2023 | By Dibyajyoti Sarma

Finance minister Nirmala Sitharaman presented the Union Budget 2023 on 1 February

The Budget also appeared to have kept as its target its support base in the forthcoming state elections, with key announcements for tribals, youth, women and the middle class. For the last group, income tax slabs have been rejigged under the new tax regime with a rebate on an income of up to Rs 7 lakh a year, up from Rs 5 lakh.

The industry, meanwhile, has reacted positively to the welcome changes. 

According to Rajeev Sharma, chief strategy officer, Mitsubishi Electric India, the Budget 2023 is oriented to the economic growth of the country, and the 33% growth in capital expenditure will result in balanced development. 

“This is a smart move since it will help the country achieve its goal of becoming a USD 5-trillion economy and a global powerhouse. I believe the announcement of setting up 100 labs to effectively develop 5G services and the vision to promote Artificial Intelligence in overall industries is a strong step by the government. This will further lead to automation in the industries which will help in propelling India’s growth and promoting smart cities. The Union Budget 2023 has come up with positive announcements for different sectors to support the make in India initiative and can result in balanced growth in the near future,” Sharma said.

Rajesh Khosla, CEO, and president, AGI Glaspac, added, “We are happy with the government’s new initiative for promoting R&D in the pharma sector, to further help position India as a leading hub for R&D on the global stage. We eagerly await to see how the relevant schemes and initiatives will strengthen the industry in the new fiscal year quarters.”

He added that the 2023-24 Budget sets a positive trajectory for a greener and more sustainable future for India’s economy and that the emphasis on inclusive development and green growth aligns with global sustainable development goals. 

“To stay competitive in the global market, it is crucial for manufacturing companies to meet ESG standards. The Green Hydrogen Mission, Green Credit Programme, PM-PRANAM, and GOBARdhan scheme emphasised in this budget will play a crucial role in meeting these standards, reducing carbon intensity, and creating numerous green job opportunities in this sector in India. This budget marks a significant step towards a more sustainable future for India,” he said.

For Pankaj Poddar, Group CEO, Cosmo First, the budget is in line with the vision of the government where the main focus is on infrastructure development and making India atmanirbhar by strengthening the MSME sector and boosting startups in India not only in the fintech side but now also on agritech as well. 

“The decision of introducing Vivad se Vishwas to return 95% of the bid to the MSMEs in case of failures to execute contracts during the Covid period and bring another dispute resolution scheme under Vivad Se Vishwas-2 to settle commercial disputes is indeed a great relief for businesses. The infusion of Rs 9,000-crore through the revamped credit guarantee scheme and additional collateral-free credit of Rs 2-lakh crore to MSMEs and reducing the cost of the credit by about 1%. Through these initiatives, India will emerge to become a USD 5-trillion economy,” he said.

He added that with this, where the other economies of the world are showing signs of recession,     Indian economy will grow by 6.4-6.8% in the next year. The fiscal deficit will also reduce to 5.9% next year from the present 6.4%. 

“The industry was expecting a major boost in the manufacturing sector by extending the last date for setting up a new manufacturing facility with a lower tax rate benefit. However, the overall Union Budget 2023-24 is positive and will drive the growth of the MSME as well as the start-up sector and give a boost to the infra sector,” he said.

Sejal Purohit, founder, Seven Spring- Premium Tea Startup, which recently launched India’s first 100% compostable tea sachet packaging, said the government has presented a growth-oriented budget with a special focus on boosting the manufacturing sector to create massive employment opportunities and maintain India’s status as the world’s fastest-growing economy even after the global crisis due to the pandemic.

“The concessional corporate tax for newly incorporated manufacturing companies is a positive move towards promoting the make in India initiative, as this will encourage new manufacturing industries as well as increase private investment in this industry,” he said, adding, “Apart from that, the funds allocated to the green industry are also positive for the startups who are trying to bring new technology and products to this industry to bring about a revolution as well as contribute to the whole economy.”

Anand Srinivasan, managing director, Covestro, a manufacturer of high-tech polymer materials, said the Union Budget 2023 has taken a significant step towards green growth with its focus on green hydrogen, clean energy storage and transmission. 

“This is a welcome move that will help India transition to a low-carbon economy and reduce its carbon footprint. We, at Covestro India, are committed to supporting the government in its efforts to promote green growth and are looking forward to working collaboratively with all stakeholders to develop innovative solutions for a sustainable future,” he said.

According to Mohit Malhotra, chief executive officer, Dabur India, finance minister Nirmala Sitharaman’s last full-fledged Union Budget before the 2024 Lok Sabha elections is a progressive, growth-oriented budget that promises to put more disposal income in the pockets of the consuming class, particularly the middle class, while focusing on building a new India with its heavy focus on capital expenditure.

The biggest positive, according to me, is the 33% increase in overall capital expenditure outlay on infrastructure development, which will take India towards become a true global powerhouse and help urbanise the hinterland. The government’s decision to set up a Rs 10,000-crore per year Urban Infrastructure Development Fund to be used for creating infrastructure in tier-II and tier-III cities will go a long way in boosting overall consumer confidence, and also help generate employment,” he said.

He added, “Overall, the Budget is all about maintaining continuity and accelerating economic growth. I would call it a progressive Budget that balances growth with fiscal prudence while laying down the blueprint for creating an enabling framework that would promote an Atmanirbhar Bharat.”

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