Budget strengthens the fundamental pillars and ensures resilience, inclusivity and sustainability: FICCI

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NEW DELHI, 01 February 2023: Commenting on the Union Budget 2022-23, Mr Subhrakant Panda, President, FICCI said, “FICCI congratulates the Hon’ble Finance Minister for delivering a balanced and progressive Union Budget which gives primacy to inclusive growth. The announcements made today capture the pulse of the economy while retaining credibility both in terms of projections as well as committing to the fiscal consolidation glide path. Most importantly, a historic outlay for public capex is a continuation of the heaving lifting since the time of the pandemic and will have a multiplier effect across myriad sectors of the economy besides crowding in private investment.”

“A push to investment and consumption was required to keep the growth cycle in motion. We are happy to note that the government has continued the thrust on capital expenditure with a 33% increase in the capital outlay to Rs 10 lakh crore representing 3.3% of GDP. This is a step in the right direction amidst a global economic situation which is still not at ease. Moreover, the revision in tax rates under the new regime will augur well on the consumption side,” added Mr Panda.

“We also compliment the government on meeting the fiscal deficit target for the current financial year despite persisting uncertainty; this lends credibility to the budget. Moreover, by projecting a 5.9% fiscal deficit for 2023-24 and reiterating the commitment to bring it below 4.5% by 2025-26, the Finance Minister has imparted confidence that growth remains a priority without compromising on fiscal consolidation,” said Mr Panda.

“The announcements made today further strengthen the fundamental pillars and ensure resilience, inclusivity and sustainability. The government is committed to ensuring manufacturing competitiveness, ease of doing business, reducing compliance touch points, and supporting livelihoods across sections. This indicates a continuation of the good work the government has done, and puts in motion an action plan for Amrit Kaal,” added Mr Panda.

Mr Panda stated, “Even as India offers a ray of hope in the current global context, we are not decoupled from the rest of the world. We laud the Government’s promise to make India exports competitive given that a slowdown in growth globally could have an impact. In this context, some incentive to support exports would have been timely.”

“The support contained in the budget for the MSME sector is welcome. The revamped credit guarantee scheme for MSMEs will benefit from an infusion of Rs 9000 crores enabling credit flow of Rs 2 lakh crores with a 1% lower cost. In addition, the move from an accrual based payment system to a cash based one has been a long standing demand from FICCI and will ensure MSME don’t suffer as a result of delayed payments,” according to Mr Panda.

“The emphasis on green growth in today’s Union Budget – across sectors such green energy, green farming, green building, green equipment – is aligned with India’s commitment towards NDC targets. The priority capital investments allocation towards energy transition, the target of 5MMT annual production of green hydrogen by 2030, and notification of green credit program are important moves to forge ahead on the path of sustainable growth,” said Mr Panda.

“The Government’s commitment to ensuring excellence in skill development of our youth through a focus on industry-ready training is noteworthy. Similarly, a focus on digitization, building centres of excellence for Artificial Intelligence with a participative role of the private industry, further enablement of public digital infrastructure especially for agriculture, Entity Digi Locker for MSMEs, Unified Skill India digital platform, and National Data governance policy will all serve to take the reform blueprint of the country a notch higher. This is expected to give a significant push to the innovation ecosystem in the country and also help start-ups to proliferate in line with the Hon’ble Prime Minister’s vision of a New India,” added Mr Panda.

“Lastly, agriculture remains an important part of India’s economy and has been given due attention. The announcement of Agriculture Accelerator Fund to encourage agri startups by young entrepreneurs in rural areas is welcome, while promoting cooperative-based economic development model for farmers is a practical move. The plan to set up a decentralized storage capacity is encouraging for farmers as it is likely to lead to better price realizations,” said Mr Panda.

The Union Budget reflects a nimble footed and agile approach to keep India on the growth path. Consistency and commitment are two critical levers for success, and FICCI lauds the government for staying earnest on both thereby positioning India as a growth engine for the world.

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