From agriculture to infrastructure, the Budget has laid down a clear roadmap for New India, says India Inc
Parag Satpute, Managing Director, Bridgestone India: This is a forward-looking budget that focuses on not only the economic health of the country but also takes into account physical and mental health. This is indeed a major milestone in India. The PM Gati Shakti plan and the corresponding announcement of additional 25, 000 km of roads will spur growth in the mobility sector. Government’s initiative on electric vehicles and the announcement on a battery swapping policy is a major boost to the nascent EV sector and will boost customer confidence in EVs”
Neeraj Bansal, COO - India Global and National Leader - Supply Chain Realignment, KPMG in India: Budget 2022’s emphasis on logistics, specifically for the Gati Shakti Plan, reiterates how the logistics sector is integral to the economic and trading activities of India. In India, road transportation dominates the logistics sector, with a majority share of 60 per cent, followed by Railways, which has a 30 per cent contribution. Given this context, the Budget’s announcements under the National Gati Shakti plan are a welcome move for the sector. The Gati Shakti Masterplan for Expressways will expand roadways by 25,000 milometres, connecting remote areas of the country with manufacturing hubs. The 100 cargo terminals to be developed under this programme will ensure a more efficient logistics connectivity. The concept of “one station, one project” will help in popularizing local businesses and supply chains, with the Railways to develop projects specifically for the MSME sector. The announcement of contracts to be awarded for multimodal logistics parks also puts into focus the government’s efforts in ensuring logistics efficiency.
The Finance Minister’s announcement of the launching of Ease of Doing Business (EoDB) 2.0—which will initiate the digitization of manual processes, further coordination with states, the removal of overlapping compliances, crowdsourcing of suggestions, etc.—is a step in the right direction to raise India’s current EoDB ranking of 63. This also is a positive messaging for potential investors, which will attract more investments and FDI in the manufacturing sector.
Climate action and sustainability was also a major focus of Budget 2022. The Budget announced an additional INR19,500 crore for PLI in solar PV module manufacturing. Electric vehicles are being specifically encouraged with mobility zones dedicated for this.
Budget 2022 has made some major announcements that can boost manufacturing and logistics in India. It needs to be seen now how soon these programmes can be implemented for a more efficient supply chain in India.”
Karan Shaha, CEO and Co-Founder, Vahak: 'It is very encouraging seeing the Finance Minister focus on the Gati Shakti masterplan. Infrastructure is one of the key components in the Indian logistics industry. By increasing infrastructural investments, the logistics and transport sector will see drastic growth, allowing for everything from intercity to intracity goods transport to become seamless. The mention of focus on productivity enhancement and investment suggests that there will be a greater allocation for technology integration in this sector, and that has been one of the main demands from the stakeholders of this industry. Another key area that has been mentioned is energy transition and climate action. This along with the plethora of upcoming development opportunities indicate a greater focus ahead on electric mobility in the logistics sector. Overall, the emphasis of the budget seems to be on the right areas. As expected by us prior to the budget reveal, the focus on infrastructure development, energy transition, EVs and technology-based logistics operations has been there in the Union Budget 2022, and that is quite encouraging for us. This emphasis on inclusive development will not only augur well for the logistics sector, but for the overall growth of the Indian startup economy''.
Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers: The Union Budget 2022-23 is forward looking and focuses on a long-term plan for the country with digitization, urban development, and sustainability at its core. For the real estate sector, the budget placed an outlay of INR48,000 crores under the Pradhan Mantri Awas Yojana, and the construction of 80 lakh homes will facilitate affordable housing. This, yet again, showcases the government’s commitment on building affordable housing stock. However, we would have liked if there was more push on the demand side, such as the extension and expansion of the credit-linked subsidy scheme.
The Budget made several announcements to spur growth of the logistics sector in the country. The government repealed about 1,490 union laws in recent years, paving the way for improving ease of doing business. The government also plans to launch ‘Ease of Doing Business 2.0.’ This should include more dynamic aspects and make India a more investment friendly destination.
The budget announced a few laudable incentives for startups. The time extension provided to claim tax benefits will provide a breather for start-ups and encourage more start-ups in India. We look forward to the announcement on the replacement of the Special Economic Zone Act with new legislation. This has the potential to make export-led parks attractive for investments. The new benefits will also trickle down to technology companies who export services and have a positive bearing on commercial office real estate.
Saransh Trehan, MD, Trehan Group: Finance Minister Nirmala Sitharaman's historic budget is an optimal blend of optimism and realism which will take the country to a higher growth trajectory. May it be agriculture, infrastructure or any other sector, the budget has laid down a clear roadmap for New India and a prosperous Bharat.
Suren Goyal, Partner, RPS Group: Finance Minister Nirmala Sitharaman deserves congratulations for pulling all the right strings in her budget. The emphasis on the infrastructure sector will boost growth in the medium to long term and will help the country in maintaining its position as the fastest growing major economy in the world. Revamping of SEZ Act will also assist in the growth of the economy
Shyam Arumugam, Managing Director, Industrial and Logistics Services, Colliers India: The budget speech places thrust on clean technology in public transport, with plans to develop special mobility zones for electric vehicles and the introduction of a new battery swapping policy. This is a welcome move to facilitate further growth of EVs, as India moves towards its sustainability goals. The EV space in India is likely to see investments of INR94,000 crore (USD12.6 billion) across the automotive value chain, over the next five years. A much- needed investment of additional allocation of Rs 19,500 crore for PLI for manufacturing of high-efficiency modules with priority to fully integrate manufacturing units to solar PV modules will be made to boost the domestic manufacturing of 280 gigawatts of installed solar capacity by 2030. A battery swapping policy would address the key concern for the charging infra. The policy aims to address the constraints of space in urban areas for setting up charging stations. Also, since battery contributes to approx. 40% of EV input cost the same would enable faster EV adoption. This is a "game-changer" for EV adoption”.
Vimal Nadar, Head of Research, Colliers India: The budget announced a few laudable incentives for startups. The period of incorporation has been extended by a year to March 2023 to avail of tax benefits. For corporates, extension granted for new companies to set up manufacturing facilities to 2024 from earlier 2023. These will provide a breather for start-ups and encourage more start-ups in India. India is becoming the hub for entrepreneurship, with India’s start-up story growing from strength to strength. Around 14,000 start-ups were recognized during the financial year 2022, with about 555 districts in India had at least one new startup. We are already seeing ample evidence of the start-up activity in the commercial office space. During 2021, in the top three cities of Delhi-NCR, Mumbai and Bengaluru, start-ups leased about 2.2 million sq feet of space during 2021, a 56% rise from 2020”.
Piyush Gupta, Managing Director, Capital Markets and Investment Services, Colliers India: Government is further strengthening public Investment Vehicles such as NIIF and SIDBI reflecting a proactive role in financing in strategic sectors. This is also reflected in providing emphasis on special status to investment in Digital Infrastructure. The concept of India @ 100 introduced in the Budget has set the foundation stone for India's growth story over long term. The Gati Shakti national master plan spruced by seven engines of Infrastructure shall go long way in developing multi-modal network to create world class infrastructure with full support on planning, financing, innovation and technology. The Government spending and private investment shall create jobs at one end and also provide opportunities to Investors. This will provide sunrise opportunities relating to energy transition, climate action, financing of Investments.
Ajay Sharma, Managing Director, Valuation Services, Colliers India: Given the push the budget has provided for digitalisation of various arms of fiscal management, investment and process implementation, digital infrastructure has become important. This in turn pushes the need for data centre and data charging systems that will push the sector demand across India.
Subhankar Mitra, Managing Director, Advisory Services, Colliers India: The total effective Capex spend by the government is about 10.7 lakh crore. There is an emphasis on PM Gati Shakti mission which is targeted towards improving connectivity and logistics infrastructures of the country. On the Reform side, the most significant shift is towards City Planning. The budget emphasizes on modernization of Building By laws, Digitization of land records and also enabling registration of properties of any location. The budget casts its attention towards training and development of urban planning practice by ways of setting up six centre of excellence with budgetary support. Since land is a state subject, hence a special interest-free loan for 50 years is offered to the state government who would participate in the reform process announced by the central government. It is expected to incentivise the state governments to collaborate with the centre to fast track the reforms.
The Budget also focuses on encouraging digital drive and fintech. The issuance of digital currency by the RBI and by brining Data centre in infrastructure category is expected to boast the fintech and digital drive of the nation. Setting up of International tribunal in GIFT city will help corporate sector to address any disputes in cost effective manner, it will also help in promoting India as an attractive investment destination.
The Budget is focused on the futuristic technological shifts, it also attempted to ease of doing business, encouraging private sector investments and job creation. However, there is not much of focus on the consumption side. Nothing significant in the proposal to boost discretionary spend at the household level, which could boost sectors like retail, hospitality, F&B, leisure and entertainment”.
R K Arora, Chairman, Supertech Ltd: Government has treaded a line of fine balance to lead the economy to high GDP growth rate by investing in infrastructure sector, yet keeping the fiscal deficit within manageable limits. In the backdrop of ambitious ‘housing for all’, PMAY has been given due importance, however largely through Government’s flagship programmes rather than the incentives real estate development companies were hoping for.
Dikshu Kureja, Infrastructure Expert and Urban Planner: The budget anchored on a vision for India @ 100 years has created a blueprint for sustainable development for India’s modernisation and transformation. The focus on urban planning as a medium to look at the development of our cities is a very welcome move. As India’s urban population continues to increase and is slated to be 50% of its total population by 2047, there is a huge shift required towards urbanisation to prevent our cities from crippling. The proposal to lay focus on Tier 2 & 3 cities shall lead to more balanced development. The allocation of 250 crores to 5 institutions for developing new urban planning ideas is going to foster innovation. This would lead to a reimagination of our cities on a sustainable development model.
As part of PM’s announcement of India moving towards a Net Zero economy, the enhanced allocation towards sustainable transport with fossil fuel-free technology, solar power, etc is all very purposeful proposals towards a circular economy.
The proposal to take the concept of TODs (Transit Oriented Development) to many other cities is a good urban design strategy and is a successful reaffirmation of India’s first TOD project for DDA called East Delhi Hub designed by CP Kukreja Architects.
The proposal of a Masterplan for expressways across our country and establishing 100 cargo terminals in 3 years shall strengthen the infrastructure spine of the country. The budget has demonstrated a balance between the immediate needs of the country and the blueprint for a long-term sustainable development towards achieving the vision for India at 100 in 2047.
Mohit Ralhan, Managing Partner -TIW Private Capital group: It’s a forward-thinking budget with focus on creating a blueprint for next 25 years. The government continues to push infrastructure building, Aatmanirbhar programme and digital India, while providing budgetary support to mitigate the challenges of COVID pandemic. The emphasis on urban planning, renewable energy, blending of fuel, electric vehicles, digital currency and local manufacturing points towards our future priorities. The massive increase of 35% in outlay for capex to INR 7.5 Lakh Crores exemplifies the positive intent of the government. The technology led modernization of post offices was also long pending. Another extremely important and far-reaching announcement is the introduction of digital currency, which is likely to be a game changer in pushing India at the forefront of digital revolution. As far as SMEs are concerned, the extension of ECLGS to Mar-2023 and increase in guarantee to INR 5 Lakh Crores is quite encouraging and will help them further in combating the impact of pandemic. Although we were looking forward to a rationalization in capital gains taxes, overall, the budget has hit all the right notes to provide necessary impetus for propelling India as a leading economic powerhouse".
Priyadarshi Mishra, CEO/Founder, Tradesmart: Infra spends in PPP mode seem to be the thrust of the Union Budget 2022. Start-ups in agriculture sector encouraged with commitment to provide support for FPOs, technology including IT based support. ECLGS extended up to March 2023 to aid MSME sector financing needs. The support for agriculture start up in the union budget will make FPO's stronger as well as strengthen the IT support
Dr. Sangita Dasgupta, Associate Professor, School of Management, BML Munjal University: A decline in the contribution of the agriculture sector to the GDP has been picked up by the service sector and not the manufacturing sector. It is an imbalance in the Indian economy. Infrastructure has been the Achilles heel for the manufacturing sector. The present government is trying to develop the infrastructure to give a much-needed boost to the manufacturing sector. Finance Minister Nirmala Sitharaman in her fourth budget talked about PM Gatishakti Master Plan which will be driven by seven engines of growth. Rs. 100 lakh crore project aims at developing holistic infrastructure resulting in inclusive development energy transmission, enhancement of productivity, and financing of investment. The master plan will provide the platform for National Infrastructure Pipeline. It will make Indian goods competitive due to an improved supply chain and reduction in logistic costs.