Industry captains welcome hike in public spending
NEW DELHI: India Inc gave a thumbs up to the budget presented on Monday, lauding finance minister Nirmala Sitharaman’s move to go big on public expenditure, while making a potentially difficult decision to set aside concerns around widening the fiscal deficit.
“The government, through the budget, has clearly indicated that it is willing to spend to stimulate growth even if it means higher fiscal deficit,” said Uday Kotak, executive vice chairman and managing director of Kotak Mahindra Bank Ltd.
“The government seems to be steadfast in its resolve to go for growth in key strategic sectors for India. Higher infrastructure spending, setting up a development financial institution to fund fresh projects, monetization of assets and putting significant money into road, power, and railway were “a big positive”, Kotak said.
“The divestment targets are aggressive but the renewed focus on monetization of government assets is an important decision. I think there is a lot of money if they can do a good job of raising that value,” said T.V. Narendran, managing director and chief executive officer (CEO), Tata Steel Ltd.
“Globally, spending on healthcare infrastructure and vaccines have given countries and their economies the best bang for their buck. Investments in these areas have prevented hospitalizations and resulted in a healthier and more productive workforce, thereby leading to an efficient economy,” said Adar Poonawalla, CEO, Serum Institute of India.
The SII has been in the forefront of vaccine development in India to combat the coronavirus disease (Covid-19) pandemic.
“Through this budget, the government has clearly indicated its focus on sustainable growth through an expansionary budget. A strong push to capital expenditure and infrastructure and utilizing the space provided by low rates and global consensus for higher fiscal deficits will give a strong push to multi-year growth. Steps such as the creation of an infra focused development finance institution and asset reconstruction company to take over stressed assets and the focus to push for growth without any major increase in taxes but through asset monetisation is very welcome. Strong growth with some inflation is going to be back soon,” Ajay Srinivasan, CEO, Aditya Birla Capital Ltd, said.
Though there was no immediate takeaway for the telecom sector, Bharti Airtel chairman Sunil Mittal said, “The efforts of the finance minister to restore economic growth while elucidating a clear roadmap in the healthcare, infrastructure, and insurance sector are bound to bring confidence to the industry and global investors.”
“The enhanced spending on public infrastructure projects such as ports, railways, airports, warehousing, gas pipelines, metros, and economic corridors is laudable and welcomed by industry as that will give impetus to employment generation and attract the investment essential to lift up the economic revival,” said Niranjan Hiranandani, president, National Real Estate Development
Council.
The measures announced in the budget will improve productivity in infrastructure, result in housing for the poor, reduce the cost of electricity, stimulate growth for micro, small, and medium enterprises, and startups, Anil Agarwal of Vedanta Resources Ltd said.
The much-awaited voluntary vehicle scrappage policy to phase out unfit, pollution-causing vehicles was also welcomed.
“I am glad that the scrappage policy has been acknowledged in the budget and am expecting the policy to be announced very soon. Though details are not yet out, when the policy comes out, it should have full incentive for scrapping and not just disincentivize for not scrapping,” said Pawan Goenka, MD and CEO, Mahindra & Mahindra Ltd.