Jamshedpur, Feb 1: State’s largest industrial hub at Adityapur has hailed budget. According to the industries, the Union Budget presented by the Finance Minister will not only boost the income but will also enhance the purchasing power of the citizens which in turn will bring much awaited cash liquidity in the market.
Bharat Vasani, hony secretary, Singhbhum Chamber of Commerce said that this is a bold and a welcome Budget. Bold because, inspite of a huge deficit, spending has not been curtailed, rather it has been qualitative spending. Welcome because unexpectedly the deficit has not been tried to fill up by way of tax. Biggest announcement for Jamshedpur in this Budget, has been the Voluntary Vehicle Scrappage Policy. This was in discussion for a long time. Auto sector was relying heavily on this to fight the cyclical nature of their industry. This will help Tata Motors, and this will enable the demand of more steel too. This will give a fillip to the entire economy of this region, as ancillaries too will benefit.
7 Textile parks are envisaged. Hope they are put up where there is abundance of labour. In a state like Jharkhand where cheap labour is available this would mean lesser migration of labour, and cost effective production.
The Union Budget 2021-22 was truly a transformative one as it pulled out all levers within its ambit to mark yet another successful attempt by the government to rejuvenate a pandemic ravaged economy. The bold measures which encompassed almost all critical sectors of the economy are expected to galvanize the recovery process which has been set into motion, according to Chandrajit Banerjee, Director General, CII.
It is encouraging to note that the Finance Minister favored a major expansion in government spending with a focus on capital expenditure to give a fillip to demand generation and strengthening the recovery momentum. This was much warranted and is in line with what CII has been strongly advocating with the Government. The 34.5% rise budgeted in the capex spending for FY22 mainly targeted towards major infrastructure expansion initiatives are laudable. This is likely to have multiplier impact on the different sectors of the economy and develop confidence on growth beyond the current recovery.
We are heartened to note that many of the CII recommendations such as setting up of Mega Investment Textile Parks, Development Financial Institution (DFI), National Asset Monetisation Pipeline, Asset Reconstruction & Management Company on the lines of a Bad Bank found a place in the budget. In addition, we also welcome the announcement of a large 137% increase in spending on health & wellbeing for FY22, which was much warranted in the current circumstances.
CII is happy to note that the Budget ticked all the right boxes of lives, livelihood and growth which would propel the economy to an inclusive growth trajectory. We expect the reform process to continue beyond the budget announcements as well, Banerjee added.
T. V. Narendran, CEO & MD, Tata Steel, said, “Finance Minister presented a very progressive and growth oriented budget while retaining the government’s focussed approach on infrastructure-led economic revival. We welcome all the proposed reforms. However, the implementation of these reforms will be critical for the benefits to percolate across the economy.
The increased Capex in the infrastructure sector, including the healthcare infrastructure, will have a multiplier effect as it will create demand across product categories, including steel. Announcements like the National Rail Plan, Jal Jeevan Mission, and City Gas Distribution Network will generate new employment opportunities and spur demand in multiple sectors.”
He added, “The government has done a balancing act of infrastructure development between the rural and urban areas which will again have a positive impact on the economy and the society at large. The Budget has also tried to address myriad concerns of the informal sector, including the migrant workers, by announcing the social security scheme for the gig economy workers, which is again a welcome step.
Exemption of duty on steel scrap and reduction of customs duty on steel products would benefit the MSME sector. However, the reduction of customs duty on steel products will have no significant impact on the steel industry as most of the steel imported into the country today comes from countries with whom we have an FTA (Free Trade Agreement) and hence they enjoy zero import duty.”
Narendran further said, “The government’s consistent effort to address the issues related to ease of doing business is a welcome approach as the Budget has further widened the scope of faceless taxation that will eventually reduce litigation.
Reforms and measures including Production Linked Incentive (PLI) scheme, setting up of Development Finance Institution (DFI), Asset Reconstruction and Asset Management Company, Voluntary Vehicle Scrappage Policy, simplification of regulatory complexities, extension of tax holiday for startups will provide much needed fillip to the economy and enable growth.
The government is aggressive on its divestment plans and has also reiterated its focus on the monetisation of government assets.
Overall, we can call it a reformist Budget as it recognises and emphasises the participation of private players in all key areas, including the financial sector.”
Dr HK Pradhan, Professor of Finance & Economics, XLRI Xavier School of Management Jamshedpur said: The Union Budget is both pragmatic and prospective, considering the backdrop of the negative GDP growth and pessimism surrounding its revival. The Finance Minister keeps growth at the centre stage of fiscal policy, with a strong counter cyclical twist. The FM utilises the fiscal space to a greater extent, raising the deficit target for 2020-21 at 9.5 % of GDP, up from the Budget Estimate of 3.5% in February 2020, and at 6.8% for the fiscal 2021-22. The nominal GDP is forecasted to grow at 14.4% during 2021-22. The growth focus is derived from higher allocation for capital expenditures, at Rs 5.54 lakh crore out of the total expenditure of Rs 34.83 lakh crore during 2021-22, majorly in the form of infrastructure development. Thus, the aggregate demand is mostly expected to be generated from the public investments in infrastructure, across a wide variety of sectors, including much higher agriculture and fishery, including health, environment and energy sectors, and not so much from the consumption side, as there is no relief in personal taxation front.