India Inc on Tuesday lauded the Union Budget 2022-23 on Tuesday.

The annual Budget was presented at the Parliament by Finance Minister Nirmala Sitharam on Tuesday, February 1. A majority of India Inc called the Budget a “balanced budget” with no major negatives in sight. 

The focus areas included PM Gati Shakti, Inclusive Development and Energy Transition. There are eight engines of PM Gati Shakti, a key infra development initiative of the Modi-led government, the Finance Minister had said. The PM Gati Shakti National Master Plan will also include infra development by States. The Budget also focused on transparency of financial statements and fiscal position, and this reflects the government’s intent.

The Budget announcements were made in light of the impact of the third wave of the Covid-19 pandemic, rising inflation and increased unemployment, ahead of Assembly elections in five States including Uttar Pradesh and Punjab.

Key numbers

As for key numbers, the revised fiscal deficit for FY22 stood at 6.9 per cent (against 6.8 per cent). The estimated fiscal deficit stood at 6.4 per cent of GDP for FY23. The Centre’s budgetary capital expenditure increased from ₹5.5 lakh crore in FY22 to ₹7.5 lakh crore for FY23 in a bid to build as well as sustain the economic recovery in the post-pandemic era.

The effective capital expenditure in 2022-23 is estimated to come in at ₹10.5 lakh crore.

For 2022-23, the disinvestment receipts has been pegged at ₹65,000 crore. The nominal economic growth for 2022-23 has been pegged at 11 per cent at 258 lakh crore, the Budget documents showed.What India Inc said

What India Inc said

“Brevity has always been a virtue. @nsitharaman ‘s shortest budget address may prove to be the most impactful,” said Mahindra Group Chairman Anand Mahindra in a tweet, reacting to the Budget. 

Sunil Duggal, Group CEO, Vedanta said, “The FY23 Union Budget is a growth-oriented and pro-development budget with sizeable capital investment for sustained and speedy economic revival. The government’s thrust has been to allow public investment to take centre stage so that private investment can follow suit.”

“The sizeable capital expenditure will also have a multiplier impact on the economy as it will create not only assets but also large-scale employment opportunities and lead to higher demand for manufactured goods by both large industries and MSMEs. Beyond the immediate task of ensuring that growth momentum is sustained, the budget has laid the roadmap for the nation’s development in the next 25 years with building blocks for future growth areas like artificial intelligence, geospatial systems and drones, semiconductors, space economy, genomics, green energy, and clean mobility systems,” Duggal added. 

“The plan to launch sovereign green bonds for green infrastructure to reduce carbon intensity and thematic funds to provide blended finance to sectors like climate action and the digital economy shows that government is now following up its commitment at COP 26 with credible action,” Duggal further added.

Rajiv Agarwal, Operating Partner (Infrastructure) - Essar and Managing Director - Essar Ports said, “The budget, guided by the hon’ble PM’s Gati Shakti master plan, will facilitate economic recovery, especially amidst the persistent pandemic. Public investment to modernise overall infrastructure in the Nation is expected to enable efficient logistics and boost manufacturing.”

Lauding the government’s plans to develop 100 PM Gati Shakti cargo terminals in the next three years, Agarwal said, “the government has formulated an exceptional vision to boost EXIM competitiveness, which will help accelerate the economy and create more jobs and opportunities for the youth. Overall it lays foundation for a progressive and a prosperous Bharat.”

Ashishkumar Chauhan, MD & CEO, BSE, said, “The Budget of 2022 is a very balanced and continues the incremental growth-oriented approach of the last budget. In this budget the finance minister provided a springboard for an investment cycle with the highest ever share of capex, focus on development of national manufacturing capabilities and clean energy, tax rationalization with no new taxes while maintaining its continuous growth focus on “Aatmanirbhar Bharat”.”

“The Budget boosts spending towards policies that are growth-oriented, create jobs, boost manufacturing, helping agri-economy and infrastructure creation. In short, a mix of short-term boost and long-term structural emphasis has been the hallmark of this Budget,” added Chauhan.

“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. I am proud to be Indian,” tweeted Uday Kotak, bank’s MD & CEO

Pawan Kumar Goenka, the chairman of SsangYong Motor Company and retired MD of Mahindra and Mahindra Limited said in a tweet, “FM has stayed clear of populist measures and delivered a purely growth budget. Capex increase of 35% is the biggest move in this budget.”

According to Goenka, the move to cap the surcharge on long term capital gains arising on transfer of any type of assets at 15 per cent is a fair move.

“Increase in PLI for solar panel. Earlier allocation was not sufficient. All successful schemes have been carried forward and in many cases enhanced,” he added. 

Gopichand P. Hinduja, Co-Chairman, the Hinduja Group, said, “‘Great roadmap for Infrastructure development backed by clear policy direction of the steep increase in Capex to ₹7.5 trillion yet targeting fiscal deficit at 6.4 per cent.”

“It’s a great attempt by the Finance Minister to lay the economic blueprint for India’s growth in the next 25 years. However, the devil is always in the detail, and the success of the measures taken would depend on the government’s ability to focus on implementation,” said Hinduja.

According to Hinduja, the allocation of 68 per cent of the defense procurement budget to the domestic industry might only have a positive cascading effect across multiple sectors. 

“There could have been more work on treating OCI/NRI investments at par with investments made by resident investors, which has been a long-standing demand of the global diaspora. Perhaps Healthcare also could have been given higher priority,” Hinduja added.

“The grit that brought Nadal the historic win in Australia, was shown today by FM as she looks to keep India steady on the path to growth amidst global geo-political turbulence. With the Covid wave looking to recede, this futuristic #Budget2022 truly powers our engines of growth,” wrote Harsh Goenka, Chairman, RPG Group on Twitter. 

“Fiscal prudence and business ease has been the theme. 35% increase in capital expenditure will drive infra n jobs - Positive rhetoric with no negative surprises = balanced budget,” tweeted Kiran Mazumdar-Shaw, Executive Chairperson, Biocon.

The FM also announced that as a part of the government’s overall market borrowings in 2022-23, sovereign Green Bonds will be issued for “mobilising resources for green infrastructure. The proceeds will be deployed in public sector projects which help in reducing the carbon intensity of the economy.”

According to Mahesh Palashikar, President, GE South Asia, “The suggested framework around Gati Shakti (infrastructure development) and inclusive development will lay a good foundation for long-term infrastructure with an eye on short term economic and job growth. We also welcome the actions on the national Digital Health mission.”

“The launch of the sovereign green bonds is evidence of the Government’s active support to ‘Green’ which will significantly help reduce the carbon intensity in the years to come,” said Palashikar. 

“For India to achieve its climate goals, financing is the need of the hour. This will require deep public-private partnerships. We at GE, have been investing in sustainable technologies for decades. We welcome the encouragement to private industry for taking up the design and development of military platforms and equipment in collaboration with DRDO. We are committed to bringing those technologies in the areas of sustainable aviation, green hydrogen, emission controls and decarbonization to India to support the country’s goals,” added Palashikar.

Ahmed ElSheikh, President, PepsiCo India said, “Reviving economic growth, increasing consumption, and fostering investment to fuel post-pandemic growth have been key objectives for the government, and the Union Budget 2022 reflects this very intent. The Government is leading from the front by raising public sector spending to keep the economic recovery on track.”

“Digitisation combined with infrastructural creation will accelerate economic development, stimulate innovation and entrepreneurship enhance living standards while keeping sustainability at its core. The increased outlay for PM Gati Shakti projects for multi-modal connectivity including 100 new railways logistics hubs coupled with steps like enhancing local oilseed production, extending the last date for starting production for new manufacturing units, encouraging alternate cropping will aid growth of the FMCG sector and further strengthen Govt’s vision of an Atmanirbhar Bharat”,” said ElSheik.

To help micro, small and medium enterprises (MSMEs), the emergency credit line guarantee scheme (ECLGS) has been extended by by one year to March 31, 2023 and the guarantee cover has been expanded by ₹50,000 crore to take the overall cover under the scheme to ₹5 lakh crore, with the additional amount being earmarked exclusively for the hospitality and related enterprises.

Sitharaman also said that government will undertake ‘Ease of Doing Biz 2.0’ and take steps to accelerate the pace of exits for businesses.

Further, the insolvency and bankruptcy code ( IBC) will be amended to enhance the efficiency of resolutions and also introduce a comprehensive framework for cross border insolvency.

Vidit Aatrey, Founder and CEO of Meesho said, “The 2022 Union Budget is forward looking and inclusive and lays down the roadmap for an aspirational India. Overall the government’s growth capex announcement will prime the wheels for the entire economy and will have a multiplier impact. Investment led growth which has been adopted by the government of India will result in higher quality growth versus a merely consumption led growth.”

“We are happy about the government’s intent to continue supporting the new age tech ecosystem by forward looking initiatives such as introduction of digital rupee, extending the existing tax benefits of startups by one more year and reduction of overlapping compliances which will improve the ease of doing business in India,” said Aatrey.

According to Aatrey, the ECLGS extension will be helpful for the MSMEs to regain their business above the pre-pandemic levels. 

“Further the revamp of CGTMSE will also help the banks extend lending to the credit-starved MSMEs. Finally, duty concessions to promote electronics manufacturing, wearables and hearables devices and mobile phones will boost Indian manufacturing and thereby reduce imports in these critical sectors,” added Aatrey.

On digital currency and digital assets, the Finance Minister also announced that the Reserve Bank of India (RBI) will in 2022 issue a “digital rupee” as central bank digital currency (CBDC). She also announced a specific taxation regime for the transfer of any virtual digital asset at 30 per cent.

Further, the Finance Minister announced the proposal to set up 75 Digital Banking Units (DBUs) in 75 districts of the country by Scheduled Commercial Banks, taking forward this agenda, and marking 75 years of India’s independence.

Vijay Shekhar Sharma, Chairman, Managing Director and Chief Executive Officer, Paytm, said, “The Union Budget today made way for digital rupee, which is a monumental step in driving the next phase of growth in the digitization of financial services and payments in India and will bring efficiency of transactions..”

“Clearly, the success of digital payments is prompting the next milestone of this journey. Through the massive adoption of Paytm, QR code, and digital banking, we have seen that customers are ready for mainstream digital money. I’m excited that India will be at the forefront of new financial services that can act as a big gamechanger in lowering the cost of banking, which in turn will drive financial inclusion,” said Sharma.

“We welcome the government’s decision to introduce central bank digital currency (CBDC) to accelerate digitization. We also believe that various budget measures to improve digital payments adoption will induct more digital-savvy Indians into the financial ecosystem willing to explore newer forms of investing and wealth creation,” said Ashish Singhal, Founder and CEO, CoinSwitch and Co-chair Blockchain and Crypto Assets Council (BACC).

“The regulatory guidance on tax from the government furthers the mainstreaming excitement of this emerging asset class with over $6bn worth of investments in India. It is also the gateway to the future decentralized world, aka Web3.0. We hope to work with the government to help bring crypto-asset taxation at par with other asset classes and participate in the central government’s vision to promote economic growth,” said Singhal.

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