Business leaders in India are confident that Budget 2023-24 will help fuel economic growth across sectors and industries, amidst a potential global slowdown and geopolitical instability.
According to a pre-budget survey by Deloitte, about 60 per cent of India Inc. surveyed is optimistic about India posting above 6.5 percent growth during this period.
Amongst industry sectors, chemicals (72%), capital goods (70%), and energy (67%) expressed confidence in growth being high, and felt that government initiatives, such as Atmanirbhar Bharat, PLI, and favourable monetary policies by RBI (to moderate retail inflation and maintain significant forex), increased spending on infrastructure, and research and innovation, will further this momentum.
The survey also found that 73% respondents hope the budget will fuel growth across industries by building strong domestic demand and focusing on capital expenditure.
Additionally, 90% of respondents commend the Atmanirbhar Bharat Scheme, with an overwhelming response from the electronics manufacturing, energy, and food processing sectors, expecting it to develop stronger supply-chain channels.
More than 70% of respondents also agree that various Production Linked Incentives (PLI) schemes have been beneficial for the growth of their sector, with close to 60% respondents expecting an extension of the incentive in the coming years.
Critical to this growth will be the pace of capital expenditure, infrastructure development, and the need to boost infrastructure financing through private partnership.
Sixty per cent of respondents suggested raising funds through Indian Government Bonds, an increase of 12% from the previous year’s survey.
Tax-related changes are also expected to boost industry growth and are the most sought-after measures from the upcoming Union Budget.
An overwhelming majority of respondents see trade treaties as vehicles for increasing investment flows and providing exchange of emerging technologies to strengthen their role in global value chains.
Inclusion of MSMEs in the GVC will bring in sustainability to industrial growth and improve trade flows, and strengthen their role in GVCs.
Besides easing tax compliance, 45% of respondents anticipate the government to reduce tax litigation, while 44% expect to gain clarification of tax laws and provisions such as TDS under section 194-O.
Additionally, the industry is expecting the simplification of the capital gains tax structure and removal of ambiguities in the interpretation of tax, thereby making compliance easier. These measures will not only spur investment and economic growth, but also provide long-term relief to taxpayers and the tax administration.
Sanjay Kumar, Partner, Deloitte Touche Tohmatsu India LLP, said, “Despite global uncertainties, the Indian economy has been resilient and is well on its way to a growth rate of 7%. With the vision of attaining a US$5 trillion economy, the government has adopted a focused approach towards ease of doing business and enhancing industrial growth, generating employment, and increasing investments."