The Union Budget presented on Tuesday is a good sequel to last year’s pathbreaking Budget. The biggest point is the Capex spending, and it comes from a position of confidence; the other aspects are the focus on ESG, and promotion of domestic industry, said Cyril Shroff, Managing Partner, Cyril Amarchand Mangaldas.
Giving an overall perspective, Shroff said the growth aspiration of 9.2% is exciting, and the announcements around private equity investments are interesting and should help remove regulatory cholesterol. In addition, announcements on GIFT City should provide additional impetus to the existing initiatives.
On Aerospace & Defence, Anuj Prasad, Partner & Head Aerospace and Defence, said the allocation of 25% of the defence R&D budget for industry, startups and academia should be a gamechanger for the defence ecosystem. It will encourage the best and brightest, including the startup ecosystem, to concentrate on defence sector innovations and solutions.
In addition, the announcement of 68% of the capital procurement budget (up 10% from 58% in 2021-2022) being reserved for the domestic industry will provide further impetus to existing players and encourage others to enter the sector. 'That said, the government needs to ensure that access to state of the art defence equipment (meeting global standards) continues to be made available to our Armed Forces,” he added.
On voluntary winding up of companies, he said, the proposal to facilitate voluntary winding up of companies in less than six months is ambitious. It reinforces the path taken by the government that digital initiatives can usher better governance and simplify processes promptly without compromising on the necessary safeguards. It is expected that the process engineering will ensure that voluntary winding up is completed in a short time frame. This will be an important step towards giving confidence to entrepreneurs that exit would be a smooth process and would also improve in ease of doing business. Moreover, a lot of capital and energy can be unlocked by faster liquidation, which can be recycled for new and sustainable business, he added.
On infrastructure and project finance related proposals in Union Budget, Santosh Janakiram, Partner & Head - Projects, said the highway expansion and the hill connectivity framework are essential steps to increase connectivity and improve logistics. It is crucial to improve connectivity infrastructure and monetise existing operational roads drastically. The follow-on positive impact on the construction sector is also significant.
The new railway connectivity and logistics framework as part of Gatishatki will also go a long way in improving connectivity and the road proposals in the Budget.
PM Gati Shakti - National Master Plan for Multi-modal Connectivity is a digital platform to bring 16 Ministries, including Railways and Roadways, together for integrated planning and coordinated implementation of infrastructure connectivity projects.
The master plan for expressways could be the icing on the cake for this sector, as the very announcement on this account is cause for optimism.
The battery swapping policy was a much-awaited, welcome step in the right direction. However, to make it attractive for private players, the FAME incentives should now be extended to them; and the key is to ensure that government comes out with clear technical guidelines for smooth interoperability amongst various battery makers.