Will FM Sitharaman live up to India Inc's Budget 2022 expectations?

Corporates and industry lobby groups expect bigger capital expenditure as the government looks to create jobs

Indian Finance Minister Nirmala Sitharaman is expected to reveal plans to fast-track economic growth through larger spending on infrastructure and healthcare when she presents the national budget for 2022-2023 on February 1.

Corporates and industry lobby groups, which expect bigger capital expenditure as the government looks to create jobs, also seek tax breaks for industries such as automobiles, manufacturing and tourism, hit by the coronavirus pandemic.

Here is a wishlist from industry groups:

Healthcare and Pharmaceuticals

The domestic pharmaceutical industry expects an increase in funds allocated to it, along with a focus on policies to foster research and development.

Also Read | Budget 2022: Capex likely to focus on jobs creation, PLI expansion

Real Estate and Infrastructure

With demand for residential real estate gradually bouncing back, realtors seek more consumer-friendly measures from the budget. Real estate firms want a hike in the cap on deductions against interest on home loans, as also more 'affordable' housing in metropolitan cities.

The government now groups houses costing less than 4.5 million Indian rupees ($59,000) in such cities in the 'affordable' category, resulting in lower tax and loan interest rates. Builders say the figure should be extended to 10 million rupees.

Automobile Industry

Industry desires include tax cuts, along with a uniform GST rate, export incentives, a thrust on research and development efforts, a boost to domestic shipbuilding capabilities, and investment in infrastructure development and promotion of the electric vehicle ecosystem.

Also Read | Memo to FM Sitharaman: Put more money in people’s hands

Aviation

The beleaguered aviation industry is vying for fiscal concessions and industry-friendly policies to recover from the massive dent caused by the still raging Covid-19 pandemic.

Tourism and Hospitality

Another major loser from the pandemic has been the tourism and hospitality industry, which is also seeking some form of income support from the government.

Retail

The retail sector has been pushing to hasten the adoption of a national retail trade policy to streamline the growth of all kinds of retail trade.

It also wants the status of an industry, with reduced compliance and regulatory burden, along with financial incentives for big projects.

Also Read | India seen boosting budget spending on infrastructure

Banking

The industry seeks details of plans for the impending privatisation of state-run banks, as well as on the functioning and scaling up of the National Asset Reconstruction Company Ltd.

Non-Banking Financial Institutions

As non-bank finance companies have grown to account for 25% of Indian credit exposure, rating agency ICRA expects the budget to re-examine a permanent refinance window for the sector from the central bank, or the creation of a body to act as a backstop for such firms.

Fintech

The government has recently set up a fintech department and launched a Payment Investment Development Fund (PIDF) to encourage the growth of the industry.

Several firms have sought an extension of schemes for micro, small and medium enterprises introduced during the pandemic, while some players also expect the government to increase the credit guarantee for lending and provide tax exemptions. ($1=75.2700 Indian rupees)

Watch the latest DH Videos here: