There is no denying that investment in infrastructure has a multiplier impact on growth and employment. The capital investment outlay being increased by 33% to ₹10 lakh crore, which would be 3.3% of GDP, not only supports the growth agenda but also serves as an incentive to the private sector for increased participation. The 100 critical transport infrastructure projects, for the last- and first-mile connectivity for ports, coal, steel, fertiliser and food grains sectors will build the momentum for medium-to-long-term growth by boosting production efficiency and cost effectiveness.
A country’s business regulatory environment plays a key determinant in its growth trajectory. The budget clearly builds upon the progress made on the legislative and business fronts, by presenting a slew of measures to enhance ease of doing business in the country. The proposition to reduce 39,000 compliances and decriminalise 3,400 legal provisions is an essential step towards this and in line with the Jan Vishwas Bill, which was introduced in Lok Sabha in December 2022. Additionally, decriminalising and rationalising minor offenses to further trust-based governance for ease of living and doing business is one of the top three actions requested by global MNCs for promoting FDI.
The budget has also provided a fillip to the Prime Minister’s vision of encouraging foreign capital in India’s growth story. The initiatives announced for Gift City, from setting up data embassies for countries looking for digital continuity solutions, to setting up a single window IT system for registration and approval from IFSCA, SEZ authorities, GSTN, RBI, SEBI and IRDAI, to allowing acquisition financing by IBU’s of foreign banks, will not only further augment ease of business but serve to facilitate capital flows. Additionally, the amendments to recognise offshore derivate contracts as valid contracts, will help movement of such instruments from other offshore jurisdictions into Gift City. As one of India’s leading foreign banks with an IFSC Banking unit, we look forward to supporting enterprises that are looking for opportunities in this space.
Reduction in effective tax rates for the middle class as well as reduced surcharge for the higher income bracket will ensure higher disposable income, consequently spurring consumption. This bodes well for overall growth and domestic demand at a time when global risks remain high.
The green growth agenda of the government, especially on energy transition seeks to countermand the environmental impact of industrialisation. The decisive impetus to the green agenda including increased outlay for energy transition and various impetus to energy storage, will help reduce carbon intensity and create green jobs.
The revamped credit guarantee scheme for MSMEs, a major economic growth driver, is a morale booster for MSMEs battling the impact of pandemic. The scheme will also provide comfort to lenders in the absence of proper collateral. Supplemental collateral-free credit will aid MSME expansion.FY24 Budget intends to fortify India as a key investment destination. It is a budget with an eye on long-term growth with stability, with a roadmap for sound fiscal management and good governance. A budget that purposes to leverage a young demography, by adopting significant measures that will help in advancement of the youth, by upskilling and helping them become competitive and secure positions on the world map. All this will help lay the foundation towards India being a $7-trillion economy by 2030.