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India’s Federal Budget FY23’s Capex thrust is likely to focus on rural welfare and employment generation schemes.
New Delhi, Jan 27 : India’s Federal Budget FY23’s Capex thrust is likely to focus on rural welfare and employment generation schemes.
Besides, focus on health, housing and physical infra is expected to continue with areas such as railways and residential projects gaining more traction.
Furthermore, MSMEs in sectors such as tourism, auto ancillaries amongst others might benefit from an enhanced ECLGS programme.
In the previous fiscal, total Capex outlay rose over 30 per cent on a YoY basis to Rs 5.54 lakh crore (Budget Estimate).
“The spending focus will likely be on welfare, rural, health and MSMEs,” said Madhavi Arora, Lead Economist, Emkay Global.
“Moreover financial sector initiatives such as debt resolutions as well as higher FPI limits to facilitate divestment in select PSBs on sale could also be presented in the budget document.”
Notably, fiscal support is necessary at this juncture to ensure that the economy delivers a durable and sustainable GDP growth of 7-to-8 per cent in FY23-24.
“We expect a higher outlay for the healthcare infrastructure sector across the country and this is partly driven by the compulsions from the prolonged pandemic,” said Suman Chowdhury, Chief Analytical Officer, Acuite Ratings & Research.
“An increase in rural infrastructure outlay is expected along with a robust allocation for MNREGA.”
Moreover, higher spending on infrastructure and construction projects will continue as they have a positive spin off effects on employment and consumption demand.
The trend is expected to give a significant boost to the construction, steel and the cement sectors.
“In the last two years there were more announcement during the year, and some of them are focussed on long term,” Soumyajit Niyogi, Associate Director, India Ratings and Research.
“Therefore, the budget is expected to have more focus on continuation of such measures.”
In addition, India Inc can expect more PLI schemes.
“There may be more PLIs, but in terms of expenditures much of it will be on already committed schemes,” said M. Govinda Rao, Chief Economic Adviser at Brickwork Ratings.
“Even if some new schemes are taken up, the impact on expenditure may not be significant.”
At present, under the PLI programme 13 sectors have been covered with an outlay of Rs 1.97 trillion.
IANS / AGENCY