Budget 2023 Reactions: What India Inc. Has To Say

On Wednesday, Finance Minister Nirmala Sitharaman tabled the Union Budget for the upcoming fiscal in Parliament. With announcements encompassing infrastructure development, personal finance, new-age sectors, and more, the document has received positive reactions from the corporate sector.

The first in 'Amrit Kaal', the budget for 2023–24 focuses on seven priorities: inclusive development, reaching the last mile, agriculture and investment, unleashing potential, green growth, youth power, and the financial sector, Sitharaman said in her budget speech.

Here's what top executives from India Inc. have to say about the financial roadmap for the next fiscal:

'Budget Balances Fiscal Consolidation, Economic Growth'

Budget with vision, structure, discipline, with immediate benefits to all individual earners, said Kotak Mahindra Bank chief Uday Kotak.

"True to its name: First Budget for Amrit Kaal," Kotak said.

'Capex, Fiscal Prudence Will Ensure Responsible Growth'

Capital expenditure will further increase the growth of the economy and even if the deficit rises, debt to GDP will fall, Godrej said.

'Focussed On Infrastructure, Capacity Building'

"When India is the lone shining star in the world facing threats of recession, Nirmala Sitharaman has delivered a perfectly focused growth-oriented budget with massive capital investment outlays at 4.5% of GDP while staying on track with the fiscal deficit reduction plan," Hinduja said.

'Capex Outlay In Line With Growth Goals'

"As the efficiency of capital expenditures is higher at the state level, the government once again earmarked Rs 1.3 lakh crore as a 50-year loan to states, which would incentivise capital expenditure," said Kumar.

'Budget Hits Multiple Targets' 

The Budget could have focused more on asset monetisation but that can be pursued otherwise also depending upon market conditions, Shah said.

'Budget Realises Its Role In Driving Investments'

The budget also pays heed to the need for fiscal consolidation, reducing the fiscal deficit target to 5.9% of GDP in 2023-24 from 6.4% in 2022-23, Barua said.

The resultant lower than expected market borrowing number is likely to bring some relief for the bond market. We see the 10-year bond yield moderating towards 7-7.1% in FY24.

'Boost To Digital Infra To Help Business Growth, Job Creation'

"Our belief is that such a mass scale enablement of digital transformation and innovation will unlock the full potential of the Indian engineering and technology sector. It 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," said Chadha.

'Push To Infra, Manufacturing'

"The scheme to support central and state governments and municipalities in replacing their old polluting vehicles is another master stroke. This will give a boost to the manufacturing sector which is largely driven by the auto industry," said Jindal.

'Capex Boost To Make India An Investment Destination'

A 33% increase in capital expenditure to Rs 10 lakh crore, the highest ever, will go a long way in building roads, ports, and airports—crucial for making India a reliable investment destination. The investment of Rs 2.4 lakh crore in railways is commendable, according to Anand Rathi.

The gross borrowing estimate of Rs 15.43 lakh crore for the next year is lower than the survey estimates of Rs 15.77 lakh crore. Hopefully, that will cheer the bond markets. However, net borrowing of Rs 12.3 lakh crore is higher than expected, Rathi said.

'Tax Reforms To Empower Middle Class'

"The government's continued support and commitment to the MSME sector are commendable, as it is crucial in driving the nation's economic growth. The improved credit guarantee scheme, along with reducing compliances will significantly help alleviate stress in the MSME sector," said Bhutada.

'Capex, Energy Transition Makes Way For Strong Anti-Cylical Momentum'

This should enable robust domestic economic growth and help counter the expected global headwinds, Shroff said.

"The focus on making India future-ready by way of AI labs, agri-tech, R&D in healthcare, further boosting Digital Public Infrastructure and holistically expanding physical infrastructure augur well for sustained long-term economic growth," he said.

'PM Awas Outlay To Bridge Demand-Supply Gap'

Nair said that the capital outlay for infrastructure at Rs 10 lakh crore, or 3.3% of GDP, is significant as it can lead to a multiplier effect across sectors and set a strong footing for resilient growth.

A dedicated investment of Rs 10,000 crore through the urban infrastructure development fund will result in the creation of quality urban infrastructure, thereby improving the quality of life. This will also translate into higher demand for housing and commercial real estate, Nair said.

'Capital Infusion To Boost Affordable Housing'

"It's a win-win situation fortifying our nation's rural infrastructure and adding power to lower and middle income groups. The wheels are set in motion towards an inclusive and sustainable economic growth and this 66% increased commitment will bolster higher rural participation," Kousgi said.

'Improved Infra To Provide Impetus To Tier-II, III Cities'

While there are no major direct announcements in the Budget that could be seen as immediate booster shots, "the unwavering focus on infrastructure will indirectly drive real estate growth over the next one year".

The tourism sector also has something to cheer for as the budget aims to boost domestic and international tourism, Puri said.

'Capex Boost India's Shield Against Turbulent World'

Equity markets reacted positively to the decision to not tweak LTCG, said Ahmad. Clear takeaway from this Budget is the focus on India. Consumption and capex sectors will see strong tailwind post the Budget, he said.

"Fiscal prudence continues to prove a strong tailwind for the banking sector that is only moving towards its long-term valuation bands," he said.

'Twin Boost To Infra And Consumption'

Union Budget 2023 builds on the foundation laid in the prior Budget—fiscal prudence without compromising growth, Mittal said.

"Fiscal deficit is expected to consolidate by 50 basis points to 5.9% in FY24 with a vision to consolidate to 4.5% by FY26. The quality of expenditure has improved with capex to GDP rising to 3.3% of GDP, against below 2% in the pre-Covid era, she said.

'Policy Support To Catalyse Growth Of GIFT City'

The far-reaching measures announced in the budget will go a long way in strengthening the ease of doing business in IFSC at GIFT City, Ray said.

"The establishment of an EXIM Bank subsidiary would encourage emerging sectors such as aircraft and ship financing activities in GIFT City. The setting up of data embassies at GIFT City would facilitate digital continuity solutions for countries seeking such solutions."

'Shot In The Arm For MSMEs, Agriculture'

George Alexander Muthoot of Muthoot Finance expects the revamped ECLGS scheme for MSMEs and the decision to return 95% of the forfeited amount relating to bid or performance security to the MSMEs by the government to bear positive results for the sector.

"We also believe that the reforms announced with respect to the growth and development of the agricultural sector, animal husbandry and fisheries will further boost these sectors and support the economy," he said.

'Capex, Consumption, Capital Gains Stand Out' 

Mindful of the fact that there is hardly any space for fiscal expansion, fiscal deficit target for FY24 is pegged at 5.9%, and expected to see progressive reduction by FY26, Iyer said.

'Welcome Impetus To Millets, Horticulture'

No announcement of roadmap for National Oilseed Mission is a bit of a dampener for the vegetable oil sector as our edible oil security continues to be heavily compromised, Chaturvedi said.

For sugar and edible oil sectors, this Budget is a non-event as the Finance Minister has not tinkered with duties, he said.

'Impetus To Incorporate Technology Promising For Farmers'

"The announcements made for the agriculture sector will augment production, promote science and tech-led agriculture, encourage cooperative societies for farmers and provide better-decentralised storage facilities," said Lal.

The hike in agriculture credit target to Rs 20 lakh crore will provide necessary financial aid to the farmers, he said.

'Customs Duty Cut For Mobile Phone Parts Beneficial'

"This Budget is pro manufacturing sector. The duty reduction on open cell parts will promote domestic value in televisions and incentivise domestic manufacturing," Gupta said.

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