Budget to attract foreign investments in infrastructure
Corporate revenues set to grow 10-15 per cent in FY22, Experts Dr. Ranade
“The positives of the Union Budget 2021 include no new introduction of taxes, government’s resorting to expansionary fiscal policy, privatization of two public sector banks and one insurance company, higher spending in the healthcare sector and transparency in the presentation of accounts. These and other initiatives laying thrust and attracting foreign investments in the infrastructure sector will boost economic growth”, said Dr. Ajit Ranade , President and Chief Economist, Aditya Birla Group at the interactive webinar on ‘Implications of the Union Budget 2021-22’ organized by All India Association of Industries (AIAI).
Dr. Ranade further said, higher borrowings from the domestic market will put pressure on interest rates. However, the government’s thrust to the infrastructure sector will lead to higher demand for cement and steel and ancillary products from the MSME sector, while also stepping up employment and income-generation. He further said, the Emergency Credit Line Guarantee Scheme announced by the government is still under-utilised and MSMEs should take benefit of the same. Dr. Ranade expects real GDP to grow by 10-11 per cent, exchange rate to appreciate to Rs. 74 – Rs. 73.5 per dollar and corporate revenues to grow by 10-15 per cent in FY22.
In his remarks, Mr. Ajay Thakur, Head BSE SME, Bombay Stock Exchange Limited said, higher foreign investment inflows in recent months and buoyancy in capital markets will lead to the success of government’s privatization and disinvestment plans announced in the Budget. The relaxation in formation of One Person Companies, allocation of Rs. 15,700 crores to the MSME sector and change in the definition of small companies should strengthen the MSME sector.
Mr. Thakur said increasing the turnover limit for tax audit for persons carrying out 95 per cent of their transactions digitally, constitution of Dispute Resolution Committee to reduce litigation for small taxpayers and faceless assessments in income tax appeals will further support the MSME sector. Setting up of seven mega textile parks will give a fillip to the sector in terms of higher employment and increase in purchasing power, thereby augmenting economic growth.
Earlier in his Welcome Address, Mr. Vijay Kalantri, President, AIAI said the government’s push to healthcare, infrastructure and agriculture sectors is likely to reflect in higher economic growth. We expect greater FDI inflows coming to India in the next few years. However, the government should ascertain that higher raw material costs for MSMEs due to government’s thrust on import substitution do not render our MSMEs uncompetitive. The government should, therefore, ensure that raw materials are made available to MSMEs at globally competitive prices.
Ms. Sangeeta Jain, Senior Director, AIAI proposed the Vote of Thanks.
The event was attended by MSMEs, economists, export promotion councils and members of the academia.