Budget Watch
The Union Budget has delivered on all fronts such as substantially higher allocation for capital expenditure, measures to provide impetus to the manufacturing sector, especially MSMEs, and focus on boosting high employment-generating sectors such as tourism, startups, and renewable energy, among others.
Divam Sharma, Founder of Green Portfolio, has compiled a list where the sector-wise impact of Budget 2023 can be seen:
Open-source digital public infra for the agri sector, farm inputs, credit, insurance, crop protection, agri accelerator fund, and agri start-up focus will create huge opportunities for the sector. We have over 65% of the population living in rural areas and almost 45% of the population is dependent on agriculture. Food security, and opportunities to expand exports for the agricultural sector will support the current account deficit.
Storage capacity creation and the formation of cooperative societies to help dairy and fisheries were announced. The announcement favoured shrimp exporters specifically. The coastal corporation would be an ideal exposure at this point.
There is a clear focus on long-term GDP growth by investing in areas of high GDP multipliers.
The budget is increased by 30% to almost Rs 10 lakh crors. This will clearly benefit the incumbent infra players and capital goods sector players. We like PSP projects, J Kumar Infra, and CESC, including cement and steel companies. Rs 2.4 lakh crore outlay for railways is the highest ever and 9 times made in 2013. This will benefit players like Titagarh Wagons.
National data governance policy to enable access to anonymized data. A simplified KYC process is a welcome step as we see a huge difference in this aspect from the west. There was a huge redundant KYC requirement for most financial transactions. This should make transactions fast and efficient.
Expansion of Digilocker integration for Fintechs and MSMEs will give thrust to the India stack and JAM. This when coupled with 5G, will elevate India as a Digi-first nation.
Tourism enhances GDP and we have seen a huge uptick in tourism posts Covid. The government’s announcement will help promote domestic tourism over international tourism.
Automobile sector
Scrapping old government vehicles is a positive for the automobile sector and companies like M&M, Tata Motors and Maruti will benefit from this higher demand.
There is a clear focus on creating intellectual capital with a focus on teachers’ training, a national library, a decentralized education program, infrastructure creation, and Eklavya residential schools for targeting the last mile students.
This is clearly a direction for long-term inclusive growth for the economy, leveraging the young population and creating efficient labour for the country. With Covid, we have seen the employable labour levels coming down, especially in developed economies.
PLI scheme has given a prime focus to mobile manufacturing and other electronics. The ambition of the government has come into reality. From 5.8 crore units in 2014 to 15.43 crore units, this is a rise of nearly 434% within nine years and this is not surprising. We have seen Apple’s three largest suppliers disentangling their supply chain and moving to India. Apple has already exported goods worth 2.5 billion USD, and we are seeing traction among local domestic firms which is reflected in the figures.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)