P.B. Balaji. Photo: Special Arrangement
The Union Budget 2023 has managed to delicately balance economic growth with fiscal prudence. It is also a confident and forward-looking Budget that puts money in the hands of the consumers and aggressively invests in building the nation.
Money in the hands of the consumers: The revised income tax slabs and surcharges will bring respite to the common populace. This will help increase disposable incomes and drive domestic consumption at a time when many global economies are reeling under recessionary fears and job cuts.
Turbo-charging investments: Strategically, the Budget envisages a whopping increase of 33% in capex outlay to ₹10 lakh crore which would provide further impetus to India for becoming a globally competitive economy. This is the defining feature of the Budget, as this would have a cascading effect on private sector investments, economic growth, employment generation and structurally lower long-term inflation. The decision to continue the 50-year interest free loan to State governments for one more year would also encourage further investment in infrastructure. The stepped-up investments have a direct bearing and a significant positive for Tata Motors’ commercial vehicle business.
Accelerating the green transition: It is heartening to see an outlay of over ₹55,000 crore towards energy transition and National Green Hydrogen Mission for a low carbon and green economy. The customs duty exemption on import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles is a welcome move. The excise duty cuts on blended Compressed Natural Gas will help reduce the cost of running a CNG vehicle. Additionally, adequate funds have been allocated to scrapping of the old Central and State government vehicles which would drive replacement demand and augur well for the auto industry whilst bringing down carbon emissions from older generation vehicles. These steps firmly reiterate the government’s commitment and vision to achieve net zero carbon emissions by 2070 and will galvanise this nascent industry. Given Tata Motors’ commitment to green mobility, these interventions augur well for our business.
Overall, this confident, finely-balanced Budget will spur consumption, will crowd-in investments without raising inflationary fears and build further confidence amongst global investors in India’s sustainable growth story and take rapid strides towards achieving “Amrit Kaal”.
P.B. Balaji is Group CFO, Tata Motors
