India Inc. is optimistic about the Union Budget FY21-22 as it is expected to give a strong push to the economy, business and industry.
According to a recent survey conducted by Deloitte Touche Tohmatsu India LLP (DTTILLP), a majority (68 per cent) of the 180 industry leaders are positive about India's economic revival.
The survey noted that Respondents believe that the mass vaccination drive, the government's stimulus packages and other policy changes, focused attention to infrastructure, and continuing efforts on digitisation are some key areas helping India revive and thrive.
About 60 per cent of the survey respondents feel Atmanirbhar Bharat, the government's flagship programme aimed at attaining "self-reliance", is well received. Respondents also expressed that extending R&D incentives, increasing FDI limit in different sectors and further simplifying its processes, along with supply chain reforms, would further enhance the programme's effectiveness.
Respondents felt that increasing the credit support to MSMEs would help the industry rebound sooner.
Respondents felt that focusing on the infrastructure sector with timely and adequate financing, as outlined under the National Infrastructure Pipeline (NIP), should be a priority area in this budget.
About 60% survey respondents cited that incentivising infrastructure investments will provide the desired impetus to the sector.
"The Financial year 2020-21 saw unprecedented disruptions to lives and livelihood all across the world. Recent data and business signals suggest that the economic recovery may be on the way. Schemes such as Aatmanirbhar Bharat and PLI have done especially well in supporting self-reliance and stabilising the country's economic growth. While these schemes have helped the manufacturing, life sciences, and consumer products sectors the most, the rest of the industry is also positive about stimulating their respective businesses through injection of R&D spend and income-linked incentives. For the economy at large, most industry leaders believe that boosting infrastructure spending would lend their sectors the needed impetus," said Sanjay Kumar, Partner and Leader Public Policy, Deloitte India.
The government has announced total special economic stimulus packages worth Rs 29.87 lakh crore (US$404 billion), 15 per cent of GDP (including RBI measures). The survey brought out that majority of the respondents believe that these packages will be effective in reviving the economy.
About 63 per cent of the industrial products and manufacturing industries highlighted PLI as the most impactful initiative.
The schemes announced under Atmanirbhar Bharat proved most helpful for the life sciences (73 per cent) and CPG (63per cent) industries.
The survey also brought out that a large part of India Inc. wants the budget to also focus on a simpler tax regime and regulations to improve compliance. Improving land and labour laws, and easier compliance for cross-border trade would be other enablers. Industry experts and survey respondents also suggested that privatising public-sector banks and granting licences to financial institutions could help infuse capital and increase competition.
The survey took a total of 180 responses across 9 industries. The survey had a set of key 10-12 questions pertaining to economic revival, ease of doing business, and self-reliance.