Optimism and confidence rule high amongst Indian businesses as more than 75% respondents, compared with 68% last year, were positive about India’s economic growth and expansion, despite the surge seen in the third wave of COVID-19. The finding is part of a pre-budget survey conducted by Deloitte Touche Tohmatsu India LLP (DTTILLP).
Sanjay Kumar, Partner, Deloitte Touche Tohmatsu India LLP, said, “The economy has witnessed a steady recovery during FY’22. The Indian economy will continue to witness the growth momentum if the government is able to sustain the efforts on implementation of reforms such as asset monetisation for the infrastructure growth, and PLI schemes. Moreover, most of the business leaders anticipate that the increasing start-up activity, coupled with the government’s stimulus packages and policies, will push the ease of doing business in India, resulting in a quick economic revival.”
About 91% of respondents, compared with 58% last year, believe that the ‘Atmanirbhar Bharat’ initiative, coupled with monetary policy actions by RBI (including extending EMI reliefs, and reducing repo and reverse repo rates), did contribute to bringing the economy back on track.
They expect the Union Budget FY23 to build on to this momentum.
Investments in infrastructure were another significant ask. About 55% business leaders believe that providing extra tax incentives to long-term investors for infrastructure investment can help promote growth in the country.
Adding to this, 45% of respondents believe that the budget should focus on announcing incentives for increased R&D spending. This would be beneficial for sectors such as life sciences, automobile, capital goods, technology, and telecommunication.
The survey results also highlighted that the industry perception towards group taxation has significantly changed, wherein 70% respondents now feel that this idea should be implemented within the next year.
About 48% respondents feel that boosting demand by adding employment and lowering personal taxes may provide the needed push to industries and expect the Union Budget FY’23 to address this. Enhancing export competitiveness, putting in place competitive import tariffs, and reducing administrative inefficiencies are some other expectations that industry leaders conveyed through the Deloitte survey.
Nearly 35% leaders want the budget to address the issue of extending higher credit support to MSMEs, and an accelerated divestment and asset monetisation programme. About 56% respondents also believe that the PLI scheme was a game-changer especially for the telecommunication and technology industry, followed by the electronics, and life sciences and healthcare industries.
More than 60% business leaders feel that the PLI scheme will attract investors and increase manufacturing and exports, which will boost the growth of different sectors and the economy.
About 59% respondents believe that India provides a favourable atmosphere to run a business. Encouraging digitalisation, simplifying tax regimes, and improving land and labour laws would help enhance the ease of doing business in India.
The global pandemic has accelerated the development of many large-scale digital innovations at an unprecedented speed. More than half of the respondents agree that the recent technological push has been beneficial.
