Budget 2023: In recent years, the government has implemented a number of supply-side policies to boost manufacturing, and thus investment and Economic growth. The Indian government has enacted a variety of strategies to endorse India’s manufacturing industry. The pandemic had such a detrimental effect on manufacturing industrial growth; however, the industry recorded double-digit strong growth in the previous financial year 2021-2022.
The Indian government has initiated a variety of programs that aim to improve the nation’s manufacturing sector as well as luring more funding from both within and outside the nation. Which include, to mention a few, the implementation of the Goods and Services Tax, a reduction in corporate tax, advancements to the corporate environment, and modifications to the FDI policy.
Profit taxation on new manufacturing units is currently as minimal as 17%. Even so, in the shortage of adequate demand, supply-side policies are proving relatively ineffective. Clearly, measures to increase demand, particularly for discretionary products and services, are required.
Since the govt has confined financial capacity to just go completely off the rails with spending, it intends to give established production-linked incentive (PLI) schemes a significant allocation uplift. Such schemes were announced in order to preserve India’s vision of it becoming “Atmanirbhar” in mind. These schemes have the potential to generate substantial output, economic expansion, export earnings, and substantial employment opportunities in the coming 5 to 10 years and even beyond.
ALSO READ: Budget 2023: A look at India’s longest-serving finance ministers
According to the experts, the union budget for 2023-24 may benefit the sector significantly as the government intends to provide a significant boost to manufacturing while focusing on increasing private investment and exports.“The Indian manufacturing sector anticipates to promote R&D and provide incentives for the local manufacturers. Adding to that, companies in the manufacturing space should be rewarded for bringing up the new technologies and adopting sustainable business practices. With pandemic crises affecting the supply and demand both, the manufacturing industry seeks support from the government,” said Lokendra Singh Ranawat, CEO, WoodenStreet
According to Dr. Deepak Jain, Founder, The Fragrance People, “The Union Budget 2023-24 will be critical for the reemergence of India’s manufacturing industry, which is currently rehabbing from the pandemic’s impact. We believe the budget identifies some really vital austerity policies like reinstatement of ‘Investment Allowance’. While developing the Union Budget 2023-24, the Indian machine tool sector strives an amalgamation of policy proposals, concessions, and specific schemes to resuscitate growth.”
On budget expectations, Ashish Aggarwal, Director, Indo Innovation said, “Manufacturing financing should be urged within and between technology companies to bring self-reliant remedies to the nation, and the creation of cutting-edge production skill sets from across top and bottom of the hierarchy must be empowered. The advancement of cutting-edge mfg skills at the top and bottom of the hierarchy must be illustrated, as this could be a huge success for future skills training.”
Meanwhile, as per Raghunandan Saraf, founder, and CEO of Saraf Furniture, “The Indian government should emphasise policies that support infrastructure, the manufacturing industry, and clean energy, thereby enabling the nation to start realizing its global potential. It is critical that the government establishes the appropriate policy and fiscal framework. The forthcoming union budget is expected to keep and offer the best policies and government budget framework to guarantee the nation’s economic growth, as well as a budget layout that really can stick up to growth rate of GDP expectations.”