Industry Lauds FM As Infra Gets A Push In Union Budget 23’

With a capital outlay of Rs 2.40 lakh crore for the Railways, urban infrastructure and manufacturing of 100 critical transport infrastructure projects, the Infra sector surely has been a key priority sector for the finance minister Nirmala Sitharaman’s Budget 2023-24.

The last full budget before elections mentioned that a capital outlay of 2.40 lakh crore has been provided for the Indian Railways marking this as the highest ever outlay -- about 9 times as compared to the outlay allocated in 2013-14.

For the Logistics Sector, FM stated that 100 critical transport infrastructure projects, for the connectivity of ports, coal, steel, fertiliser and food grains sectors have been identified. "They will be taken up on priority with an investment of Rs 75,000 crore, including Rs 15,000 crore from private sources," she added.

She further acknowledged the significance of regional connectivity saying that 50 additional airports, heliports, water aerodromes and advance landing grounds will be revived for the enhancement of regional air connectivity.

Citing the keynote of 'Sustainable Cities of Tomorrow', the FM spoke about the Urban Infrastructure Development Fund (UIDF). It will be managed by the National Housing Bank and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities.

Further, all cities and towns will be enabled for 100 per cent mechanical desludging of septic tanks and sewers to transition from manhole to machine-hole mode. The enhanced focus will be provided for scientific management of dry and wet waste to facilitate urban sanitation, Sitharaman said.

The industry was quick to share their views on the Budget with BusinessWorld. Here is what they said :

TV Narendran CEO and MD Tata Steel - "The finance minister has presented a high-quality budget that focusses on increasing capital expenditure to build infrastructure while at the same time not compromising on the fiscal discipline that is so essential in an era of rising interest rates.  There is also a more holistic focus on logistics with significant investments in the Railways as well as proposed work on coastal shipping. The budget also assigns resources for the long-term and important transition to a greener future." Rampraveen Swaminathan, MD and CEO, Mahindra Logistics - “We welcome this budget as it focuses on sustainable growth and infrastructure development. The announcement of setting up Urban Investment development fund (UIDF) for Tier 2 and Tier 3 cities will provide a much needed boost for smoother and faster logistics transportation and will further ensure greater connectivity in tier -2 and tier-3 cities. Identifying 100 critical transport infrastructure projects will have a positive impact on nation’s last and first mile connectivity.  Additionally, the announcement of 50 new airports, helipads, and aerodromes will enhance the regional air connectivity across the country whereas the highest ever allocated capital outlay to Indian Railways will add to the smooth connectivity between different points of country and easy and faster freight movement.”

Virendra D. Mhaiskar, Chairman & Managing Director, IRB Infrastructure Developers - “The Budget seems to be a promising step towards making India a 5 Trillion economy through continued focus on infrastructure sector. The confirmed impetus on containing fiscal deficit while committing enhanced capex to spur overall economic growth and a noteworthy budget allocation of Rs 10 Lakhs Crores for entire Infrastructure Sector – an increase of 33 per cent, of which Roads & Highways Sector has been earmarked a pie of Rs.2.7 Lakhs Crores, definitely deserves big applauses.”

Anil G Verma, Executive Director and CEO, Godrej & Boyce - “This is a balanced and inclusive budget which will provide further impetus to growth. The renewed thrust on investment in infrastructure will drive the productivity of our economy and generate employment. Our competitiveness in the global economy will also be improved through the thrust on research in fields like 5G services, AI and agriculture. Together with the initiatives to reduce the compliance burden and de-criminalise several regulatory provisions, it will improve the ease of doing business in India and attract fresh investments.

Murli Iyer, Country CFO, IKEA India : “The budget is growth-oriented, consumer-friendly, and investment-focused. We welcome the Indian government’s call to identify ‘green growth’ as a priority sector which is aligned with IKEA’s sustainability vision.  The 66 % increase in outlay to the PM- Awas Yojana will make housing affordable for the many people and give a boost to the home furnishings sector. The decision to invest Rs 75,000 crores on critical infrastructure, the revival of 50 airports and heliports, and the promotion of coastal shipping will improve the ease of doing business tremendously. We believe that the changes in income tax slabs will revitalize consumption and encourage retail spending.” 

Prayasvin Patel, CMD, Elecon Engineering – “Despite the volatile international economic environment, the Indian economy has grown at 7 per cent and stands to be the 5th largest in the world. This is a testimony of India being on the fast track to growth. Rs 35,000 crore priority capital for energy transition and Rs 19,700 crore to the National Hydrogen Mission will further be instrumental in green manufacturing and production processes.”

Brij Bhushan Agarwal, VCMD, Shyam Metalics – “This is consistent with the Prime Minister's vision of creating an 'Atmanirbhar Bharat'. The metal Industry will be benefited from the increased investment in infrastructure development, urban and transportation. The MSME is also receiving additional attention. These initiatives are almost certain to benefit the country and our sector putting the Indian economy on a higher trajectory of growth.”

Satish Kumar Agarwal, CMD, Kamdhenu – “The development of 100 critical transport infra is a welcome step. The manufacturing of additional airports, heliports, water aerodromes and advanced landing zones will be revitalised to provide a push for the infrastructure sector which in turn will create demand for steel.”

Nisha Harchekar, Head, Equity Research at Fintoo : “Similar to industry expectations, the Railway outlay has come at a whopping amount. Stocks related to Railway namely Titagarh, IRCTC, RVNL and IRCON will gain.”

Kunal Seth, Director, Shalimar Corp: "The 2023 budget has a focus on developing transportation, urban infrastructure, and housing, which is expected to benefit the real estate sector. The exemption of income up to Rs 7 lakh and the new tax slabs will increase the purchasing power of the middle class and drive demand for housing. The allocation of Rs 10,000 crore for the Urban Infrastructure Development Fund (UIDF) will improve urban infrastructure, making cities more attractive to potential home buyers. The infrastructure finance secretariat will drive private investment in infrastructure, including the real estate sector, leading to the development of new housing projects and improvement of existing ones. Overall, the budget provisions are expected to have a positive impact on the real estate industry and support its growth."

Deepak Shrivastava, MD, Indian Subcontinent, UPS said: "The Union Budget for 2023 recognises the strides taken by the Indian economy to be the fifth largest in the world and reinforces a sustainable economic development agenda for the future. Action on strengthening infrastructure and supporting MSMEs will help speed up supply chain growth and boost cross-border trade. Plan to set up more airports and heliports, proposed urban infrastructure investment for tier two and three cities will strengthen regional connectivity, which is important to facilitate trade. Exports are key for global trade and for the logistics sector to be globally competitive in order to support India’s target of a USD 5 trillion economy. Reduction in customs duties for certain sectors will support the government's target of an exponential jump in goods and services exports."

"MSMEs are crucial not just for the logistics industry but also for the overall economic growth of India. Therefore, it’s good news that the government has focussed on their finance requirements with a revamped credit guarantee scheme and access to collateral free loans. It’s also extremely encouraging to see the push towards green growth. It signals a clear shift and focus on sustainability and the environment. Overall, integrated planning, co-ordinated implementation of projects and a supportive policy framework will be extremely important and will likely have a positive long-term impact for the logistics sector," Shrivastava added. 

Puneet Dalmia, Managing Director, Dalmia Bharat said: “Aspiration to Action- Budget 2023 primes India to the top of the world. The Union Budget 2023 is the providential threshold for creating the India of the Amrit kaal. As eloquently portrayed by the Finance Minister as the “Saptrishi” or 7 priorities, the Budget has created a very purposeful direction and vehicles to capture India’s rightful place amongst the 'Top 3' major economies of the world.”

Anil Chaudhry, Zone President, India and CEO & MD, Schneider Electric India said, “The FY24 budget lays a strong foundation for sustainable development of India in the Amrit Kaal. With the goal of achieving net-zero emissions by 2070, it focuses on energy transition and decarbonization of the economy with a sizeable allocation of Rs 35,000 crore. The vision for ‘LiFE - Lifestyle for Environment’, is deeply ingrained in the budget and reaffirms the government's commitment to tackle the climate crisis. Globally, India ranks fourth in installed renewable energy capacity and the budget will give a further fillip to the addition of capacities in areas like wind and solar. Key measures are being taken to support green growth, including viability gap funding for battery storage, renewable energy evacuation, National Green Hydrogen Mission, and green credit policy. With an investment of Rs. 10,000 crore, the budget also underlines the need for embracing a circular economy through the GOBARdhan scheme. Furthermore, setting up three centers of excellence for Artificial Intelligence is a welcome step from the government as it bridges the skill gap in the AI space and nurtures talent to develop tech of the future."

RPV Prasad, CEO, Envision Wind Power Technologies India said, “The FY24 budget has reaffirmed India’s focus on Green Growth by delineating it as one of the seven major priorities. The budgetary commitment of Rs. 35,000 crore to support energy transition and net zero objectives would strengthen the nation's journey towards energy security as India seeks to decarbonise its economy. The budget specifically spells out measures to usher in stability in renewable energy supplies by introducing viability gap funding for battery energy storage systems. The budget also plans to introduce a detailed framework on pumped storage projects. Both these measures are expected to boost setting up of hybrid renewable projects and will certainly raise the share of renewable power in the overall energy mix.”

Pratik Agarwal, Managing Director, Sterlite Power, and Director of Serentica said, "The budget has laid down a promising path for the nation’s green growth, clearly identified as one of the seven pillars, with sizable outlay of Rs 35,000 crore. India is among the few developing countries focusing on green growth in addition to meeting the basic needs of power for the masses. The finance minister has taken proactive steps to promote battery storage and pumped storage projects to ensure stable and round the clock supplies from renewable resources like solar and wind power. Focus on discoms is key to achieve any real progress in the power sector, commend the measure of tying 0.5 per cent of the state deficit to power sector reforms. This is an added incentive for the states to reform the DISCOMs. However, along with this a major incentive and disincentive package for the discoms would prove beneficial. Overall, the budget has pushed all the right buttons and is well in line with the macroeconomic goals of the country.”