The industry which contributes 15 per cent to India’s GDP, seeks continued capacity expenditure support, GST reduction, the revival of domestic manufacturing and PLI schemes, and strengthening infrastructure among others from the upcoming Union Budget 2023-24.
The most awaited Union Budget 2023-24, to be presented by Finance Minister, Nirmala Sitharaman on 1st February 2023 will be the first post-COVID and the last full-fledged budget of the Modi-led government, ahead of the general elections scheduled in 2024.
The upcoming budget is expected to focus on long-term development, with a major focus on sectors such as manufacturing, technology, healthcare, defence, pharma, and energy, among others.
The manufacturing sector which contributes 15 per cent to India’s GDP, is optimistic to see a big boost in the upcoming budget, as it will further lay a roadmap to steer the industry’s economy towards 25 per cent GDP growth within the next decade – an ambitious target set by the finance minister, as well position itself as a major international manufacturing hub.
We spoke to the Festival of Manufacturing (FOM) Brand Ambassadors and here is what they are anticipating from the upcoming Union Budget 2023-24:
According to Kamal Bali, President & Managing Director, Volvo Group in India, who represents the auto sector given the challenging global macro-economic environment as well as the emerging opportunities for a resurgent new India, he looks forward to yet another budget that re-enforces India’s high growth journey by continuing capex support for the development of sustainable and robust national infrastructure, efficient logistics and persisting with reforms for ease of manufacturing, ease of doing business and ease of living.
For Mahesh Babu, Chief Executive Officer – SWITCH Mobility Ltd India is making an intense push for faster adoption of electric buses, and the segment has seen exponential growth over the years. “Given this scenario, one of the key expectations from the budget is a continuation of FAME subsidy, for at least a few years and a reasonable EV penetration in the commercial vehicle segment. To democratise sustainable mobility, priority, and access to funds, with payment guarantee by STU’s is a pragmatic solution for EV bus adoption.”
That said, Sanjay Koul, Managing Director, Timken India believes that the power of Indian manufacturing is growing and alongside new product development out of India for the world will make us unbeatable and the expectation is that something comes from this year’s budget that will push the cause. Also, the expectation is to have bearings as part of the PLI scheme to promote more localisation.
As far as renewable energy is concerned, PKC Bose, Vice Chairman and Managing Director, Enercon Windenergy Pvt Ltd is not a happy man as the Indian wind industry is ignored to a greater extent, especially the wind turbine manufacturers because the wind turbine industry is largely driven by international companies who brought very large FDI to India and exporting wind turbine components whereby bringing forex to the country.
“Unfortunately, there are no incentives to the industry at all, whereas solar and green hydrogen companies have benefits such as PLI (Production Linked Incentives). Hence it is very important for the government to closely look at this industry from its right perspective whereby further foreign investments can be attracted.”
Sandeep Singh, Managing Director, Tata Hitachi Construction Machinery Co. Pvt. Ltd is having a high expectation from the Union budget 2023. He hopes to see continued growth in investment and sustained execution of infrastructure projects, actions from PM Gati Shakti to debottleneck slow-moving projects, PLI scheme for the CE industry which has the potential to make India a global manufacturing and export hub of CE, and regulatory changes that would create easy line access to low-cost funds for equipment buyers from banks, NBFCs, and digital lending players. “We expect to see measures in place to reduce cheap imports to encourage domestic manufacturers and address the volatility issues of sudden increases in input costs such as steel, fuel, etc.” he added.
Anand Sundaresan, Managing Director India and Executive Vice President, Ammann Group expect continued high allocation for infra spending with many projects lined up for completion in the next fiscal year. “A step should be taken towards supporting R&D spending, by reinstating a weighted tax deduction of 200 per cent of R&D spend. They should also assign priority sector status for the Construction Equipment Industry. The GST should be reduced from 18 per cent to 12 per cent for construction equipment used in infra projects,” he suggests.
For Rajesh Nath, MD, VDMA India Services Private Limited maintaining the fiscal deficit is crucial for India’s growth trajectory. Given the PLI has borne good results, he suggests the scheme should be extended to other sectors also.
That said, going by the impetus given by the government on the AatmaNirbhar Bharat initiative, Puneet Kaura, Managing Director & CEO, Samtel Avionics expect the finance minister to increase the capital outlay for the procurement of new equipment from Indian defence manufacturers. This is also important given the current geopolitical situation concerning to the Russia-Ukraine conflict.
Furthermore, as inflation and the impact of global supply chain disruptions are the immediate issues confronting manufacturing in India and elsewhere, the cost of operations has increased several folds and the industry is looking to the budget to provide some remedy in the immediate instance. Here, Aravind Melligeri, Chairman & CEO, Aequs Aerospace feels that the Union Budget to focus on increased capital expenditure, boosting domestic manufacturing, and developing a collaborative and inclusive workforce.