A Clear Road Map To Growth
The government’s push for green energy and clean mobility systems opens up limitless possibilities for India. As an organisation committed to sustainability, we believe that the clean mobility initiatives and blended fuels will play a significant role in achieving decarbonisation goals and in reducing the dependence on fossil fuels.
One of the biggest challenges for the EV ecosystem has been battery charging stations. The proposed battery-swapping policy will help create standards of interoperability, thereby making EVs more accessible and affordable. The PM’s Gati Shakti Initiative of expanding the national highway network by 25,000 km augurs well for the auto sector. We hope the outlay for the rural economy will improve the sentiments of the people and prove a catalyst for increasing the demand for vehicles.
In this special issue we carry excerpts of my conversation with the Union Minister of State for Finance, Bhagwat Karad, who shares his perspective of what and who the budget kept in mind, and what it strives to achieve. We also bring in voices from industry who talk of how the budgetary measures will play out through the year and beyond.
The Union Budget has provided a clear roadmap to how the Modi government intends to put the India growth story on the fast lane. It has clearly signalled restoration of fiscal consolidation. From a peak of 9.2 per cent of GDP in 2020-21, the fiscal deficit has been reduced to 6.9 per cent in 2021-22. It is budgeted to be further reduced to 6.4 per cent in FY 2023. In its medium-term fiscal policy-cum-strategy statement, the budget projects a fiscal deficit target of 4.5 per cent by 2025-26. Once achieved, it would indeed send out a positive signal to potential global investors. The budget also provides a tangible shift in favour of expanding capital expenditure. While the total expenditure is budgeted to grow by 4.6 per cent in FY 2023, capital expenditure growth is pegged at 24.5 per cent. This is a welcome change. And within the capital expenditure outlay, a clear preference for non-defence outlay will most certainly have a higher multiplier effect going forward.
For the salaried class, there are no cheers. However, there are several significant positives that have attracted widespread appreciation from India Inc, such as the provision for a concessional corporate tax rate of 15 per cent applicable on newly incorporated domestic manufacturing companies. A taxation regime for digital assets along with the intention to introduce a digital rupee based on blockchain, are welcome initiatives too. On the downside, the much-talked about privatisation drive seems to have lost steam, indicative in the significantly reduced projections of receipts from disinvestment for not only FY 2021-22 but also for FY 2022-23. All in all though, this is a budget focussed on growth. Read on.
