Union Budget 2022: India Inc Hails FM Nirmala Sitharaman's 'Growth-Oriented' Announcements

In her presentation of the Union Budget 2022, Finance Minister Nirmala Sitharama said that the budget will lay the foundation for economic growth and expansion of the country for the next 25 years.

PTI Photo

New Delhi: Leaders of India Inc. on Tuesday welcomed the Union Budget 2022 presented by Union Finance Minister Nirmala Sitharaman in the Lok Sabha.

The entrepreneurs hailed the announcements as "growth-oriented" and "forward-looking" while India aims to continue on the path of sustained economic revival.

Anil Agarwal, Chairman Vedanta Resources, said: "I congratulate FM Nirmala Sitharaman Ji for a growth-oriented and forward looking Budget for the masses. It sets the stage for rapid progress post pandemic. Compliments to Hon. Prime Minister for his long term vision, thinking ahead to India at 100 in the year in which India turns 75. I have no doubt that India will be a prosperous country in the near future. Delighted to see that the next phase of Ease of Doing Business reforms will be centered on trust-based governance. I believe the time for moving to self-certification across the board has come. We stand with the government in its exhortation for Sabka Prayas. The private sector is committed to nation building, job creation and will work with the government and the people of India to fulfill our goals."

Anand Mahindra, chairman, Mahindra Group wrote on Twitter: "Brevity has always been a virtue. @nsitharaman‘s shortest budget address may prove to be the most impactful".

Gopichand P. Hinduja, Co-Chairman, the Hinduja Group said: "We compliment the PM and the FM for presenting a forward-looking budget to make India future-ready. Great roadmap for Infrastructure development backed by clear policy direction of the steep increase in Capex to Rs. 7.5 trillion yet targeting fiscal deficit at 6.4%. 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. Allocating 68% of the defense procurement budget to the domestic industry only will 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."

Harsh Goenka, RPG Group chairman, tweeted: "Industry asked FM "Growth-oriented budget Caro’na" FM Sitharaman responded with - Dolo for infrastructure, Booster for housing, Sanitisers for MSMEs, and social distancing from raising taxes! Plus, clearing PCR (PMGatiShakti - Capex - Reforms) test! #Budget2022."

Prashant Ruia, Director, Essar Capital said: "A blueprint budget with a nice touch of green! A bold one with a massive hike in public investment will be the booster dose to restart corporate investments. The infrastructure allocation with a focus on technology will generate employment & help transform tomorrow!

Uday Kotak, CEO, Kotak Mahindra Bank wrote: "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."

Sunil Duggal, Vedanta Group CEO, said: "The FY23 Union Budget is a growth-oriented and pro-development budget with sizeable capital investment for sustained and speedy economic revival. The budget has sharply hiked the capital expenditure for FY23 by 35% to Rs 7.5 lakh crore. The government's thrust has been to allow public investment to take center 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. 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."

Sunil Mathur, Managing Director and Chief Executive Officer, Siemens Limited, opined: "We welcome the growth-oriented budget with a focus on the four pillars – productivity, climate action, financing investments, and PM Gati Shakti plan. These are concrete steps in the right direction, and overtime should positively impact the economy. The increased Capex outlay of Rs.7.50 lakh crore further demonstrates the intent of the government to create the necessary impetus for the economy. Stability in tax policy is also a welcome step".

Vimal Kejriwal, MD & CEO, KEC International Ltd: "I welcome the forward-looking, capex-led Budget 2022, with a sharp 35% increase in outlay. A strong focus on improving the safety of Indian Railways, faster implementation of metro rail systems, infrastructure status for data centres, along with emphasis on PM GatiShakti with significant allocation towards Jal Jeevan Mission, Affordable Housing, BharatNet and building 100 Cargo Terminals for multimodal logistics facilities augur well for KEC International Ltd. and our well-diversified businesses.

Further, initiatives such as the use of Surety Bonds as a substitute for bank guarantee, a cap on Surcharge of AOPs/ consortiums at 15% as against 37% earlier and an end-to-end online e-Bill System to enhance transparency are steps in the right direction for EPC contractors such as KEC".

Amit Chadha, CEO and MD, L&T Technology Services: "Digital Engineering is the future and steps taken today will shape the country’s journey ahead on this. And the announcements under Union Budget appear to precisely embrace this proactive approach as the fundamental impetus has been on leveraging digital technologies to further the nation’s growth and march ahead. As a pure-play ER&D services provider, our belief is that such a mass scale enablement of the digital ecosystem will also result in complementing uptake of digital engineering capabilities resulting in the country maintaining its strong hold as a global preferred destination for engineering services".

Alain SPOHR, Managing Director, Alstom India & South Asia: "We welcome the progressive and growth-oriented Union Budget presented by the Finance Minister for 2022-23. India is poised to regain its title of the fastest-growing large economy with a 9.2% GDP growth estimated for the coming year. With an enhanced capital expenditure outlay of 35% as compared to last year, core infrastructure segments including Railways and Urban Transport stand to benefit and will have a huge multiplier effect on the economy.

Highlight of the budget was the announcement to introduce 400 new Vande Bharat trains over the next three years, introduction of the state-of-the-art KAVACH TCAS signalling systems over 2000 kms of railway network, larger investments to provide for sustainable and integrated urban transport systems. The total budget estimates of Rs 23,875 crore for MRTS & Metro Projects will incentivise faster implementation of projects and the standardisation of metro design systems will provide the much-needed stability for manufacturers".

Prabhat Awasthi - Managing Director & Country Head, India at Nomura: Growth orientation intact, watch out for macro risks: "India’s budget continued to stick to prioritising growth with an emphasis on investment cycle, much in the same vein as in the previous year. The budget, with a 35% Y/Y increase in the central government’s capex while allowing higher borrowings for states for similar capex initiatives is pushing the growth envelop hard. With no major populist sops, the budget seems to be again putting economic growth over any political expediency – especially in light of the pending state elections. Even in the matter of higher spends for public schemes, much higher allocation for affordable housing pushes asset creation over direct income enhancements. With economic growth showing signs of picking up, the budget should solidify the process and hopefully incentivise even greater private investment via stronger growth outlook.

Key area of concern could come from macro sources. First of all, the fiscal deficit is higher than expected. Secondly, there were expectation of capital gains related changes which would have allowed Indian bonds to be included in global bond indices. This has not happened and consequently there has been a selloff in the bond market.

Given India’s heightened trade deficit and a strong push in borrowing, the macro risks from a global tightening cycle would be a key concern and needs to be watched carefully".

Shishir Baijal, Chairman and Managing Director, Knight Frank India: Growth Oriented Budget with focus on Infrastructure and Digital Development

"The Finance Ministry has presented a growth-oriented budget with focus on infrastructure and development. Creation of unified logistics platform and developments of 100 new cargo terminals in the next three years are significant steps in improving the supply chain eco system in the country. Many measures have been around digital adoption and ease of doing business initiatives which will improve business efficiency and go a long way in driving economic growth. The Government has reiterated its commitment towards Housing for All by allocating Rs 48000 crore towards this scheme, around the same as last year. Interventions to improve credit to the pandemic afflicted MSME sector including hospitality industry is also a step in the right direction. Infrastructure status given to Data Centers will provide a huge boost to the fast evolving digital environment of the country. The FM has said that the SEZ Act will be replaced with a new law and we will be waiting for further details given the significant impact of this on the commercial real estate sector.

 

However, the government could have given further boost to the housing sector given the strong multiplier effect the sector has on the economy. The sector would have benefitted immensely by demand boosting tax benefit measures. The housing sector has made a substantial recovery from the pandemic lows and due attention here would have gone a long way in sustaining the growth momentum."

B Gopkumar, MD & CEO, Axis Securities: "Capital Markets love a budget big on spending, and the budget 2022-23 has delivered on this front! Capital expenditure of INR 7.50 lakh crore, a 35% increase from last year, is a significant long-term positive. Coupled with the fiscal deficit target of 6.4% of the GDP, this budget showcases the government's commitment to growth. We see an increase in expenditure on housing to the tune of Rs 48,000 crore, which will boost affordable housing. No major tinkering of taxation is also good for the markets. The markets will welcome this budget as this helps the GDP growth rate, which will remain high. Overall, a simple, futuristic, growth-oriented budget from the government.

We believe infrastructure will perform well, clearly because of the great impetus. Cement and Metals should also start picking up. Banking should see improvement in the forthcoming quarters, with GDP growth aiding credit growth."

Mahendra Nahata, MD, HFCL: "We believe the budget 2022-23 aims to prioritise growth with its thrust on capital spending and generating employment opportunities for wider section of the economy. The budget also had positive announcements for the telecom industry, Defence and housing sector. As announced by the FM, the PLI scheme in 14 sectors has already received excellent response and has the potential to create 60 lakh new jobs, and an additional production of Rs. 30 lakh crore during the next 5 years. Required spectrum auctions will be conducted in 2022 to facilitate rollout of 5G mobile services within FY23 by private telecom providers. We believe that the expected spectrum rollout for 5G in 2022, combined with a scheme for design led manufacturing for 5G equipment under the PLI scheme will not only lead to advancement in the sector, but will also help to create employment opportunities. Being a leader in the production of optical fibre cables, we are delighted to hear that contracts for laying optical fibre in villages will be awarded under BharatNet project under PPP model in 2022-23. This will help the telecom industry in providing affordable broadband and mobile communication in rural and remote areas".  

Prem Kishan Gupta, Chairman & Managing Director, Gateway Distriparks Ltd: "The Government plans to boost swifter movement of goods across the country and to support the same one of the main initiatives mentioned in the budget was "Gati Shakti" plan, which envisages, amongst other thing, improvising better rail connectivity. It’s encouraging for the sector to see government’s increasing focus on planning, financing through innovative ways, use of technology, and speedier implementations.

The alignment of projects in National Infrastructure Pipeline, Gati Shakti Masterplan for expressways, 100 new cargo terminals for multi-nodal logistics will boost connectivity and will be a transformative approach for economic growth and sustainable development in India. We hope that the Unified Logistics Interface Platform will assist in efficient movement of goods, reduction of logistics costs and time, and assist Just-In-Time inventory management. As India gears up and prepares for a stronger and resilient economy with considerable investments in the infrastructure and increased manufacturing, the logistics sector as a service provider will be the critical enabler."

Balram Yadav, Managing Director of Godrej Agrovet: "It is a balanced budget that is focused on infrastructure boost, supporting agriculture sector with incentives and technological fillip. River interlinking projects, Ken-Betwa link will definitely improve farming and livelihood facilities to farmers and local population. The decision to revise syllabi of agricultural universities, and use of Kisan drones for crop assessment, digitization of land records, spraying of insect pesticides is a step in the right direction to modernize the agriculture sector. Introduction of post offices into the core banking sector will provide an impetus to financial inclusion in the rural parts of the country. Yes, there were expectations which have not found space in the budget, but as the FM stated, it’s a budget that looks at overcoming the pangs of pandemic and focus on the next 25 years of growth."