The virtual interactive session on the Union Budget 2022-23 with Nirmala Sitharaman, Hon’ble Union Finance Minister saw many areas of unspoken needs addressed hoping that this journey of growth would be a real learning experience for all of us
The session commenced with Deepak Sood, Secretary General, ASSOCHAM appreciating the way the country was handled when the pandemic hit. “With timely reforms and policy interventions the ship was held steady.” He recalled that last year’s budget was a paradigm shift that had got us to a very strong position today. Congratulating the Honourable Prime Minister Shri Narendra Modiji and the Honourable Finance Minister Nirmala Sitharaman for leading the budget this year to be path breaking and consistent, giving a policy consistency to all investors and people, and leading us to a path of growth, he quoted “The efforts toward Make In India, PLI schemes, digital India and Atma Nirbhar Bharat are path breaking ideas, which for decades would take the country forward.”
Vineet Agarwal, President, ASSOCHAM & Managing Director, Transport Corporation of India Ltd also congratulated the finance minister for presenting the fourth budget in her tenure. He added that the union budgets for the last few years have been game changers for our country which have laid out a path by being consistent in its intent and providing continuity in policies and direction. He appreciates the transparency shown in drafting the budgets. “Never before has our country’s union budget talked so much about logistics, digital, sustainability and growth.” He feels the planned expenditure of 2.9% of India’s GDP is a game changer and the government has embraced technology and digitisation in all sectors of the economy and initiatives; like creating the unified logistics platform, digitisation of land records to support farmers and e-skilling are very contemporary governance processes to improve the ease of doing business and make us globally competitive. With support for MSME segments to the extension of ECLG scheme for Atma Nirbhar Bharat to increasing domestic defence procurement, digital support to states and for pushing a new ecosystem, agriculture and sustainability; this budget has been visionary. As we look forward to the next several years of growth, we find our country well positioned to take advantage towards a 5 trillion dollar economy.
Sustainability and allocation of resources
Sumant Sinha, Sr. Vice President, ASSOCHAM & Chairman, ReNew Power Private Limited, in regard to the context, appreciated the allocation of Rs 19,500Cr for the solar PLI scheme which may take India along the path of Atma Nirbhar Bharat, to eventually being an alternative manufacturing destination to China. He presented a few suggestions that could create an all-round manufacturing ecosystem in the green industry for India. Apart from renewable energy; batteries and green hydrogen are areas that are coming up. Like in the case of the solar industry, he feels lower import duties and GST at the beginning, can create demand. With this demand and manufacturing capacities in place, there was an increase on GST. He recommends if the same can be followed for both batteries and green hydrogen.
Grandfathering bids that have happened for imports of solar modules was the second recommendation by him especially with the custom duty being 40% for solar panel imports starting from 1st April 2022.
The third recommendation was about the distribution utilities. He suggested if a central scheme like the one in April 2020 could be created such that the rest of the genetic sector is not affected with deferred payments from states. The last suggestion was creating a domestic carbon market by regulating a price for carbon if corporations are to be penalised. Generation of carbon credits could also be created and sold globally.
In response, the finance minister said that there is a need for more coordination between the states and the centre, solving entrenched problems at every layer. Hopefully the difficulties that the sector faces due to legacy problems would be addressed by considering the criticality of the sector and complying to the commitments given in Glasgow by the Prime Minister. “We are definitely very serious at multiple levels working on getting the energy sector problems sorted out.”
Infrastructure
Sajjan Jindal, Managing Director of JSW group of companies feels that the whole economy of the country would change, taking us to be the third largest economy in the world, specially with a 40 per cent increase in the spend of infrastructure. Specific to the steel sector, with a global demand for non-ferrous metal prices, the manufacturing costs have gone over the roof. He quoted, “India is not open for dumping of ferrous or non-ferrous products”. The industry, on the other hand exports 20% of steel to the global market however the taxes paid while importing raw materials to re-export are quite high. He requested the government to consider these points.
In response, the minister expressed her wish that earning from exports for industries should continue. However, for downstream industries, the pressure or constant requests for raw material at affordable costs still exists. Understanding the impact of dumping and rising prices, she terms it as a dharma-sankat especially when the global market is unable to give a differential price for the domestic demand. She quotes “Whilst we don’t want dumping, we also want the prices to be at affordable levels for MSMEs,” assuring that it is being looked into.
Textile and infrastructure
Balkrishnan Goenka, co-founder of the Welspun Group with regards to textile and infrastructure, appreciated the highest GST and income tax collection that went up by 40 per cent. The budget completely spells out the present concern of our country focusing on areas like infrastructure, education, health and green environment. The government’s readiness to spend on infrastructure has a multiplayer positive effect towards sustainable GDP growth and employment. He quoted “The future of the textile industry looks promising,” and went on to explain the involvement of the government in three broad areas; firstly the large industrial park “Mitra”, second the PLI scheme, third, the national mission on textiles. However, with the prices of cotton increasing rapidly and intermediaries making more money today because of the duty percent(10 per cent), there is a psychological impact. In terms of infrastructure the concessionaires are pressured for immediate payment of 60 per cent of GST(which is usually paid post construction). The reimbursement from NHAI is being delayed.
Knowing this area of technical textiles can do a lot more to capture global markets, the finance minister said, “India has the potential to meet the existing global demand and we need to somehow use this moment to capture that market. However, there is a mismatch about the sell off to traders, in a more disproportionate quantity at the cost of mills.” She further explains the redeemable tax while exporting cotton and assures that it is being taken care of.
Civil aviation and tourism
Ajay Singh, Vice President, ASSOCHAM & Chairman & Managing Director, SpiceJet Ltd in terms of civil aviation and tourism emphasised on the lack of support from banks. He requested if a message from the government to the banks can be sent that for a period of 2-3 years these sectors could be placed under priority and if the excise duty could be taken down as huge imports are being needed.
In response the minister empathised about the serious problems being faced especially with severe restrictions coming in. “The global price of fuel is now a concern for all of us, especially the airlines, which has not seen a complete heads up post the pandemic.” She promised she would have a word with the banks and would place the request of GST in the council.
Digital context
Mr. Dilip Modi concluded and requested focus on two opportunities in terms of digitalisation which is emerging in rural India. First, there is an increase in the number of people (34 Crore customers) who use the Aadhar enabled payment systems to withdraw cash from their bank accounts. With a lot of focus on UPI and Rupay this is a unique opportunity for small merchants in rural India, to accept payments using Aadhar. He requested if this can also be promoted as a way to grow the digital payment ecosystem in rural India.The second is the on-boarding of rural merchants onto digital fintech platforms. He requested if digital and financial literacy could be promoted along with a lot of programs.
With this overview of the problems being addressed the minister was very supportive in every area and not only did she assure a better result, but said “We welcome any written communication,” requesting the association to put forth the needs. As much as the country looks up solutions from the budget, it is up to time(and the pandemic) to see how many can come into existence.
Transcribed by Sharon Abhignya Katta
