Budget 2022: India Inc.'s Take

India's Finance Minister Nirmala Sitharaman presented her fourth union budget in parliament with a focus to boost the capital expenditure.

Her 90-minute Budget 2022 speech also included other announcements such as a 35% increase in the capital expenditure, battery-swapping for electric cars rather than charging stations, and introduction of the 'Digital Rupee'.

Here's what India Inc. made of the budget...

Budget 2023 appears to be growth-oriented by an increase in capital outlay, fiscal deficit capped at 6.4% and efforts being made to reduce compliance burdens and improve ease of doing business, Ronojoy Dutta, whole-time director and chief executive officer at InterGlobe Aviation Ltd., the parent of India's largest airline IndiGo, said in a statement.

The budget, he said, would enable India to achieve the growth estimate of 9.2%.

Dutta, however, said he was expecting a tax concession to the aviation industry in the forms of a cut in ATF excise duty and allocation of concessional finance to airlines to help come out of the pandemic.

The Budget 2022 has been growth-oriented with the government focusing on infrastructure creation, clean energy, providing impetus to education, healthcare and promoting Make in India in various ways with a firm eye on sustainability, according to Tapan Singhel, managing director and chief executive officer at Bajaj Allianz General Insurance.

To aid infrastructure development, insurers will be able to provide surety bonds to reduce indirect cost for suppliers and work-contractors, thereby diversifying their options and acting as a substitute for bank guarantee, he said.

The intent to bring in all post offices within the core banking system, and the rollout of an open platform for the National Digital Health Ecosystem consisting of digital registries of health providers and health facilities, are the other two positives in the budget.

The standards for battery interoperability and recognition of business models such as battery-as-a-service are much needed reforms, Amit Gupta, CEO at Yulu Bike, said. The creation of special mobility zones for non-fossil fuel vehicles will also help drive adoption of EVs in cities.

"Increased outlay for FAME (Faster Adoption and Manufacturing of Hybrid and Electric vehicle) will incentivise shift to EVs and we are hopeful that the Ministry of Heavy Industries will expand the scheme to include low-speed EVs which account for 90% of EV sales."

Venkatraman Narayanan, MD and CFO at Happiest Minds Technologies, termed the budget as "demand-generating".

"I expect the private sector to more than match the capital spend of the government, thus supporting GDP growth of 9% plus, leaving enough headroom for expenditure on farms, health, education and other social sectors."

Aakash Minda, executive director at Minda Corp., said some of the measures such as capex spent of around Rs 7.5 lakh crore, PM Gati Shakti projects and focus on making India more 'Atmanirbhar' will certainly "offer a shot in the arm" for the manufacturing industry.

"Announcements such as the battery-swapping policy and the push for clean tech and electric vehicles will further spur the growth of the EV industry while also acting as a catalyst for jobs among the youth.”

The big boost to capital expenditure, according to Venu Srinivasan, chairman at TVS Motor Co., would give a fillip to the Indian economy. For the automobile sector, he said the ‘PM Gati Shakti Master Plan’ is focused on building infrastructure and improved connectivity for commuters.

In electric mobility, he said the measures undertaken by the government to promote clean and green mobility like introducing the battery-swapping policy is going to be "instrumental in supporting an efficient EV ecosystem".

The increased outlay for PM Gati Shakti projects for multi-modal connectivity, coupled with steps like enhancing local oilseed production, extending the last date for starting production for new manufacturing units, encouraging alternate cropping will aid growth of the FMCG sector, Ahmed ElSheikh, president of PepsiCo India, said.

According to Umang Vohra, MD and Global CEO of Cipla, the budget was ‘digital-first and wellness focused'.

The announcement on enabling a National Mental Health programme, Vohra said, will help provide access to quality counselling and necessary care across rural and urban settings within the country.

"The sector will also see significant benefit from the National Digital Health Ecosystem which will help streamline processes and enable companies to deliver transformative business and patient outcomes in the new normal.”

The Union Budget 2022-23 displays the government's continued commitment to clean energy and transportation, said Vikramadithya Gourineni, executive director of Amara Raja Batteries.

The policy, he said, provides several drivers to the ecosystem of mobility startups engaged in battery or energy as a service business models.

"It will be interesting to see what sort of interoperability standards are introduced with the thrust on battery swapping," he said. "While battery swapping can play a pragmatic solution for India’s electric mobility needs, there is also merit in introducing higher safety-rated battery packs compatible with faster charging."

On the consumption front, there is a bit of disappointment as there is no direct stimulus to spur growth and no major announcement on privatisation and the overall divestment targets are underwhelming, said Ashish Gumashta, CEO of Julius Baer India.