DIGITAL ASSIGNMENT

SUBMITTED BY: ATRI ACHARYA (17BEE0070)

COURSE: MICROECONOMICS (HUM1033)

SLOT: G2+TG2

FACULTY: PROF. P. ALLI

Q. Will the Budget 2020 improve the country's industrial growth? Comment.

Many heavyweights of various industries provided mixed reactions to the big question:

Alain Spohr, Managing Director of Alstom India and South Asia

“First budget of the decade had tremendous expectations and the finance minister has
presented a well-laid roadmap to meet them. The focus on leveraging technology and
boosting transport infrastructure coupled with worthy goals of reducing emissions are
laudable. However, the government could have done more to promote localisation and Make
in India.

Creation of five smart cities and modernising transport infrastructure with a Rs 1.7 lakh crore
allocation are commendable. Plus, the progressive initiatives by the Railways of promoting
solar energy, upgradation of railway stations, electrification of tracks and operating 150
Tejas-like trains through PPP model are welcome steps. The Bengaluru suburban transport
project and the high-speed train between Mumbai and Ahmedabad will improve connectivity
between important commercial hubs. All these initiatives taken together will improve
opportunities for all.
Domestic manufacturers can contribute massively to all these big-ticket projects envisaged by
the government. But companies which have invested heavily to align with Make in India
need a level playing field to counter import-oriented competition to contribute to nation
building.
The government’s intent to reward innovation, investments and entrepreneurship is in the
right direction. But the key is speedy execution of projects where localisation and domestic
manufacturing are given more encouragement.”

Puneet Dalmia, Managing Director, Dalmia Bharat Group

“The FY21 Union Budget has focussed on rejuvenating economic growth with multiple nuts
and bolts measures. It is evident that the government has chosen to take focussed steps and
provide sector specific boost, keeping the compulsions of fiscal deficit in mind. At the same
time, a lot now hinges on the government’s ambitious National Infrastructure Pipeline
programme that aims to attract investments of over ₹100 lakh crore in the next five years. If
the 6,500 identified projects are executed well, this one single programme has the potential to
significantly alter the Indian landscape, create lakhs of jobs, provide robust business to
ancillary industries like steel and cement, and prime the broad economy. It is now imperative
that the government gets down to immediately rolling out the fine print of this gigantic
infrastructure push so that projects can take off in right earnest. The budget’s other key
decision to IPO LIC is a Big Bang announcement and once achieved it will give more fiscal
space to the Central Govt provide focussed growth stimulus and pursue inclusive growth.”

Harsha Kadam, CEO & President - Industrial Business, Schaeffler India

“With the Union Budget 2020, the government proved that it is committed to revitalise
consumer spending. The focus on the personal tax regime will create the much-needed boost
creating an increase in demand and supply hence improving the overall market sentiment.
The government’s proposal on skill development will ensure job opportunities and we at
Schaeffler India are also aligned with the same thought process. The government's focus on
better connectivity though roads and railways will have a rub off effect on the overall auto
sales in the long run along with increasing the number of trains hence deepening the train
connectivity within the country.”

Anil Chaudhry, Zone President & Managing Director, Schneider Electric India
“The Budget for FY2021 has affirmed its commitment to clean energy with a proposal to
allocate Rs 22,000 crore for the renewable sector. The plan to provide standalone solar
powered pumps to 20 lakh farmers, allows farmers to generate solar power and set up large
solar power capacity along the rail tracks will encourage the use of clean and renewable
energy. Further, the decision to extend concessional corporate tax rate of 15% to new power
generating companies engaged will give a major boost to the renewable sector. Additionally,
the focus on ensuring ‘smart metering’ replacing conventional energy meters by prepaid
smart meters in the states and UTs over the next 3 years will prove to be a positive step in
addressing the financial stress of DISCOMs, if there is 100 percent compliance. This will also
give users the right to choose their distributor and decide how much they want to pay.
The proposal to create 5 new smart cities with the states on a PPP model and attract Rs 100
lakh crore investment under National Infrastructure Pipeline is also critical to boost overall
economic growth. If rolled out well on the back of adequate funding, the NIP will be a
potential game changer for the broad economy and have the ability to create lakhs of jobs and
revitalise ancillary industries.”

Nishant Arya, Executive Director, JBM Group. 

"The Government's attempt to boost consumption by cutting the Income Tax rates could have
a knock-on effect on the automotive sector. The cut in Income Tax rates could leave more
money in the hands of people, encouraging them to spend. Also, the Finance Minister's
attempt at offering some support to the auto component manufacturers could give an impetus
to the indigenous manufacture of auto components, but that would take a while.
We had expected this year’s Budget to propel the auto industry to a higher orbit and help it
recover from the lows it has touched last year. We were also hoping for a much-required push
to EVs and greater clarity on the EV plans with a longer-term perspective as an industry."

Anand Srinivasan, MD, Covestro India

Covestro welcomes the moves proposed by the Finance Minister to boost the growth of the
Indian Economy by catalysing domestic manufacturing sector. Since electronics is critical to
several industries, policies that promote domestic manufacturing of electronics, mobile
phones and semi-conductors will have a direct impact on import reduction, and will give a
fillip to many related industries as well, while creating jobs at the same time.
Also, the government’s move to shut power plants that have high polluting emissions is an
encouraging step to help India move towards building a safer environment for its future
generations.

The Budget also has allocated funds towards making healthcare more accessible by
increasing healthcare infrastructure spends as compared to last year. Setting up hospitals in
tier 2 & tier 3 cities under PPP model is a step that will bring healthcare to the doorsteps of a
large section of the population which can dramatically improve the health index of India.
Additionally, medical device indegenisation focus will save valuable foreign exchange, also
giving our unique country an opportunity to create new and relevant technologies that are
applicable in a complex environment like India.

Water and Sanitation was another key focus area in the Union Budget 2020 under
‘Aspirational India’ theme. Both water and sanitation infrastructures are essential to protect
the health of India's future generations, and should be given maximum priority to ensure
speedy implementation of projects.

Overall, the Budget has created a good balance between the immediate priorities as well as
the future needs of the country.

Pankaj Kalra, CFO & Head-Strategy, Essar Exploration & Production

“As another boost to the Hon. Prime Minister’s vision of a gas-based economy through
prioritising domestic natural gas supply, the Union Budget 2020 proposal to expand the gas
grid from 16,000 km to 27,000 km is a significant announcement. This will definitely be a
huge opportunity for players in the unconventional hydrocarbon sectors whose assets are
mostly classified as stranded because of lack of evacuation infrastructure. As conventional
hydrocarbon resources are dwindling and new resource accretions are few and far between,
unconventional hydrocarbons, like CBM (as an established source) and Shale Gas (in the
long run) will assume greater significance.
The gas grid expansion, coupled with the liberal policies introduced over the last few years,
will revive investor confidence in the upstream sector. Our leadership in the unconventional
hydrocarbon space, with more than 15 TCF of gas reserves, will help us play a central role in
the emerging gas-based economy.”

Gautam Seth, Joint-Managing Director, HPL & Electric Power

“The annual budget announced by the FM has given special impetus to the power and
infrastructure sector and allocating Rs 22,000 crore for renewable and power sector is going
to push for faster development and growth across sector. The announcement made by FM to
replace energy meters with pre-paid smart meters will further help in complete digitisation of
the whole system and will help in bring about more financially healthier utilities. The FM has
urged state governments to implement smart meters in the next three years and HPL being
one of the leading manufacturers of smart meters sees this as a huge opportunity. In addition,
the implementation of five Smart city projects in PPP mode will give more opportunities to
the private companies.”

Sunil Patwari, CEO, Rashmi Rare Earth

"We laud the budget presented by Sitharaman. She stated that the Government could
announce a Rs. 36,000 crore fund to provide production linked incentives (PLI) to
smartphones makers. Building a complete ecosystem to spur local manufacturing is the key
for its success. This scheme will support the manufacturers to offer quality products at
competitive prices, generating ample employment opportunities and boosting the domestic
economy. Our request to the Government to give preferential treatment to Indian companies
having 100% local equity over their Chinese counterparts. Faster and hassle free
implementation of Incentive Schemes is the call of the hour."

Yash Rane, Founder, Chizel

Budget 2020 looks promising from start-up point of view. Also, reducing taxes will really
help spending power of common man thereby increasing cash flow in the market. However, it
does not address the slowdown in the market. We have not seen any aggressive measures that
could promise USD 5T dream of INDIAN ECONOMY.

Akshay Singhal, Founder, Log 9 Materials

"At the outset, budget looks to balance aspirations and shortcomings. For Deeptech
entrepreneurs like us, budget presents a clear national intent towards greener environment
and renewable energy which is commendable and much appreciated."

Hence, in summary, overall, the manufacturing industry seems satisfied with the Union
Budget 2020-21. Some of the well received steps include:
• Funds allocation for infrastructure creation modernising railways is a welcome step
• Focus on the personal tax regime for creating an increase in demand and supply
• Focus on green technologies is a laudable move
WEBLIOGRAPHY

1. https://www.manufacturingtodayindia.com/sectors/6318-budget-2020-how-the-industry-
reacts
2. https://www.businesstoday.in/union-budget-2020/expectations/budget-2020-indian-inc-
pitches-for-higher-infra-spending-to-boost-construction-equipment-
industry/story/395109.html
3. http://www.businessworld.in/article/Union-Budget-2020-Industry-Reactions/01-02-2020-
183236/
4. https://www.themachinemaker.com/manufacture/how-budget-2020-makes-its-impact-on-
indian-manufacturing