Union Budget – 2022: Industry Reacts
This year’s budget has opened wide opportunities for the infrastructure and construction industry, with a clear focus on building a modern and world-class infrastructure for India. We welcome the significantly increased allocation to infrastructure capex compared to last year, while the measures to speed up approvals for low cost housing projects and additional allocation to the PM Awas Yojna will together go a long way in delivering housing for all. Finally, we are glad that the government is looking to align the National Infrastructure Pipeline (NIP) with the PM GatiShakti framework, with the larger goal of economic transformation through improved pan-country logistic efficiency.
Overall, the budget has underlined the government’s intent to work closely with the infrastructure and real estate industry as it seeks to build a new and modern India.”
- Rajan Aiyer
Vice President and Managing Director
Trimble, South Asia Region
“The finance minister has delivered an investment oriented budget that will drive infrastructure development with over 35% increase in capex outlay covering highway expansion, five river linking projects, last mile delivery of drinking water under Nal se Jal scheme, investment in railways, digital healthcare, affordable housing scheme, infrastructure development in Northeast and many other new initiatives.
The PM Gati Shakti Master plan for expressways for faster movement of goods and people especially the announcement of 25000 kms of highway construction in 2022-23 will help ensure sustained demand for Construction Equipment industry.
The CE industry looks forward to speedy implementation of the announced measures that will then regenerate strong demand for Construction Equipment which has been witnessing a slackening pace in the current fiscal year
The pandemic induced slowdown has posed severe liquidity challenges for the MSMEs which are an important stakeholder of the CE industry. The extension of the ECLGS scheme till March 2023, revamping of Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) and rolling out of Raising and Accelerating MSME Performance (RAMP) programme will provide the much-needed support to this critical sector”
- Dimitrov Krishnan
President ICEMA and Managing Director
Volvo CE India Pvt. Ltd.
“The Union Budget has brought the focus back on Bharat. Building further on India’s infrastructure requirements will have a tremendous effect on achieving sustainable growth for the economy and will have an exceptional positive social impact.
The transformative approach for economic growth in the infrastructure sector driven by seven engines – roads, railways, airports, ports, mass transport, waterways and logistics infrastructure – is a smart move with an eye towards achieving long-term goals. The announcement regarding aligning National Infrastructure Pipeline with Gati Shakti Master Plan will certainly give an edge to the Indian economy, encouraging smooth and seamless urban development in the nation. Additionally, the government’s continuous investment in expanding the national Highway network by 25,000 km in 2022-23 by mobilizing INR 20,000 crore will also be enormously beneficial for the infrastructure sector.”
- Sandeep Mathur
India General Manager
Business Head India & SAARC - Construction Equipment
CNH Industrial
The major highlight of the announcements made in the budget for us is the Big infra spending boost of Rs. 7.5 Lac Crores in financial year 2022 - 23.
Provision for Rs. 1 lac crores - 50 year interest free loans to state government over and above the current limit will surely put more money in the hands of the state government to increase spending on infrastructure development. Green bonds announced in the budget session also look very promising in order to reduce the carbon intensity of our economy.
Increasing impetus given on the 7 engines of growth in the Pradhan Mantri Gaati Shakti program shows the government’s commitment towards rapid 360 degree growth in the overall infrastructure sector. Some key measures announced in the budget are a definitive step towards this goal. Expanding highways by 25000KMS, which is nearly 83 kms a day, will prove to be a major growth booster for our economy. Similarly, Multi modal logistics facilities were previously not given the due attention it needed but thankfully today’s budget seems to have changed this trend with the announcement of construction of 100 cargo terminals in the next 3 years.
With the allocation of Rs. 48000 crores for the Pradhan Mantri Aavas Yojana, we are hopeful that the Government's commitment towards providing affordable housing will soon turn into a reality. Besides housing, drinking water is an essential need for everyone and allocation of Rs. 60000 crores towards drinking water projects will not only benefit the common man but positively impact the infrastructure sector and pipeline industries as well. Other significant announcements like Modern Infra for India at 100 with multi modal approach, Energy Transition, climate action to fuel sustainable development etc. indicates that this year’s budget is dedicated to infrastructure development and is forward looking in every sense of the word.
- Mr. Deepak Garg
Managing Director
Sany India & South Asia
"The Union Budget 2022-23 presented by the Hon. Finance Minister, Smt. Nirmala Sitaraman provides a much-needed boost in the infrastructure segment. The slew of measures announced will provide the necessary thrust for an infrastructure-led economic revival. Announcements like - allocation of INR 20,000 crores towards Gati Shakti Yojana, public investments for modern infrastructure, plans for the construction of 25,000 km of national highways, urban development and sustainable living, increased budgetary allocations of INR 48,000 crores under the PM housing schemes, the introduction of Modern building by-laws will provide much-needed impetus for India’s building material industry.
Announcements towards the reality segment by allocation of INR 44,000 crores under PM Awas Yojna to complete 80 lakh affordable houses in 2022-23 is a positive to the cement industry. Also, the proposed 35% increase in capital expenditure will definitely help to revive the economy that has been under pressure due to pandemic impact and rising inflation.
Overall, the budget will pave the way for the country’s growth going forward."
- Jayakumar Krishnaswamy
Managing Director
Nuvoco Vistas Corp. Ltd.
“The Union Budget 2022 gives a major boost to the infrastructure sector that will help the economy to recover, and grow, at pace. The PM GatiShakti framework is a visionary approach to long-term development. The cement sector will play a major role in this development journey of the country.
The Budget highlights the importance of Sustainable Development and shows India’s seriousness of its Net Zero commitment made recently during the COP26 Summit. Even at Holcim India and its two operating companies in India--Ambuja Cements and ACC, sustainability remains at the core of our business strategy.
Along with the focus on clean mobility and green energy, the proposed measures and reforms for boosting the hydro-power and solar power capabilities of India will help the nation to achieve the targets of 500-gigawatt renewable energy by 2030.
The introduction of Sovereign Green Bonds in public sector projects is the right direction in financing the decarbonizing initiatives. Overall, Budget 2022 can be termed as a progressive policy in enabling India to transition towards a green and digital economy."
- Neeraj Akhoury
CEO India, Holcim
CEO & Managing Director, Ambuja Cements
"We are excited that the Government has taken note of the Big private investment in infrastructure guided by Gati Shakti. The government's decision to work closely with financial institutions to expand access to capital and reduce the cost of intermediaries to promote affordable housing for the weaker sections of the society is a positive move. It is also a positive sign that the government is focusing on urban development and the decision to infuse Rs 48, 000 crore for PM Awas Yojana is an exceptional move that will boost the affordable housing segment and help to achieve the Prime Minister's vision of Housing for All. The proposal to extend 60,000 crores for providing access to tap water to 3.8 crore households and 80 lakh households for the affordable housing scheme is laudable and it shows that the government is serious about the recovery of the real estate sector which is affected heavily due to COVID-19 Pandemic".
- Avneesh Sood
Director
Eros Group
“Additional allocation of Rs 19,500 crore for PLI for mfg of high-efficiency modules with a priority to fully integrate manufacturing units from polysilicon to solar PV modules is a welcome move for the sector. It will give further impetus to investments in India, generate more employment and pave the way for an Atmanirbhar Bharat. Further comments can be added once more details on the enhanced PLI scheme coverage is known, especially if any incentive has been provided for manufacturers with smaller capacities under the ambit of PLI.
Enhanced financial support for setting up of Distributed Renewable Energy projects in border villages under Vibrant Village Programme is a big relief to such areas, where power availability is an issue. It will help inhabitants improve their livelihood and security with availability of renewable energy power with relevant support from the government.”
- Anurag Garg
COO
Jakson Solar
"Budget 2022 has clearly laid a major focus on the green energy transition, reducing carbon footprint, and inclusive economic growth. As we move towards a greener economy, the role of Distributed Renewable Energy as a catalyst in the empowerment of MSMEs, job creation, and reforms in agriculture will be crucial. New initiatives to encourage productive use of clean energy in rural areas driven by DRE can be of great value to the rural as well as the national economy."
- Jaideep Mukherji
CEO
Smart Power India
“With the growing demand for housing and development, we are happy with the increased attention and budget allocated towards overall infrastructure of the country by the Honorable finance minister in her budget speech today. Additional public investment for modern infrastructure, be it roadways or housing development, is a big step in the right direction to creating a better and sustainable India. The increased investment also indicates that the government is actively looking for ways to improve the overall living conditions of people in the country and generate more employment opportunities in the process. Focused investment to create proper water supply channels and housing solutions will overall help in the sustainable development.
We are looking forward to the implementation of PM Gati Shakti and the overall impact that this initiative will have. We are optimistic about governments focus to create provisions for improving water supply in rural areas that will aid drinking and domestic needs. ‘Har Ghar, Nal Se Jal’ is a very important undertaking and will get much needed impetus with the bulk of budget allocated to this initiative.
Overall the budget gives priority to rural India with a focus on infrastructure, agriculture and job creation leading to a sustainable growth.”
- Manish Khandelwal
Commercial Director- India
Wavin
"The Union Budget 2022-2023 presented by FM Sitharaman for the affordable housing sector will undoubtedly encourage the sector's next stage of growth. The announcement that an urban planning panel would be established and that 80 lakh affordable houses will be built at a cost of Rs 48,000 crore under the PM Awas Yojna in 2022-23 is a positive move. This would help to enhance the affordable housing market and promote affordable housing in metropolitan areas for the economically weak and middle class. The challenge, however, according to the Economic Survey, is to significantly increase infrastructure spending. India spent $1.1 trillion on infrastructure during fiscal years 2008 and 2017. It will now need to spend $1.4 trillion to reach a GDP of $5 trillion by 2024-25, according to its recent report. Additionally, the Gati Shakti plan, which aims to bring 16 ministries together to work on infrastructure and connectivity projects, is also a beneficial move that will aid the affordable housing plan. From Hocomoco's standpoint as a construction aggregator company, the budget is extremely encouraging."
- Sripad Nandiraj
Founder
Hocomoco
''For the first timethe Finance Minister has sought to transform the real estate sector by bringing in transparency and efficiency in the business. This will help to reduce the cost of transaction and will ultimately benefit the homebuyers.
The Government's plan to launch ‘Ease of Doing Business 2.0' is a step in the right direction and it's continuous efforts to promote the same along with digitization will help the economy and the real estate sector business going forward. Single Window clearance mechanism too will go a long way in improving ease of doing business in India. This should include more dynamic aspects and make India a more investment friendly destination.
In 2022-23, 80 lakh households will be identified for the affordable housing scheme and Rs. 48,000 crore allocated for PM Awas Yojana. This together will boost the affordable housing segment and help to achieve the Prime Minister's vision of Housing for All. Also, the 60,000 houses to be identified as beneficiaries for PMAY in rural & urban areas will ensure that more and more homebuyers get to avail this benefit.
As anticipated, it's a very futuristic budget focusing on economic recovery benefitting from public investment and capital spending."
- Sandeep Runwal
President, NAREDCO Maharashtra
Managing Director, Runwal Group
"The budget’s resolute focus on infrastructure will certainly aid the real estate sector growth trajectory. The impetus given to road infrastructure through the new 25,000 km National Highway network will offer new momentum for the sector by opening a new market in tier-2 and tier-3 cities. The allocation of INR 48,000 crore for PMAY Urban and Rural will push the affordable housing segment.
The move to appoint a high-level panel for urban planning and designating the five existing academic institutions as the Centre for Excellence for urban planning with endowment fund of Rs 250 crore will prove pivotal for the real estate sector as both the emerging urban landscape and decaying city infrastructure need a complete overhaul. The emphasis on promoting the use of public transport in urban areas is futuristic, considering the traffic and pollution scenario in all metro cities.
Bringing 1.5 lakh post offices under the core banking system will enable financial inclusion and provide access to accounts through net banking, mobile banking, ATMs to the marginalized section. This will prove significant for farmers and senior citizens in rural areas to invest by enabling interoperability and financial inclusion. Eliminating 75,000 compliances and repealing 1,486 union laws for facilitating ease of doing business environment is a great step to promote young entrepreneurs and start-up ecosystem. In a nutshell, the budget is progressive.
However, the budget missed the opportunity to accord the long pending industry status to the Real Estate sector as a whole; currently the same has been accorded only to affordable housing. This long-pending demand would have helped developers raise funds at lower costs."
- Kaushal Agarwal
Chairman
The Guardians Real Estate Advisory
"The Government has once again laid an emphasis on infrastructure in the Union budget announced today. Infra spending in PPP mode seems to be the thrust of the Union Budget 2022. The Budget made several announcements to spur the growth of the infrastructure sector in the country that includes the announcement of 25,000 km of new highways, Gati Shakti Masterplan for expressways, 100 new cargo terminals for multi-nodal logistics, and development of urban metro systems. This will propel the growth of the real estate sector and will also help drive demand for the warehousing and logistics sector across the country. The Government also extended the ECLGS up to March 2023. This will go a long way in supporting the MSME sector and revive industrial activity.
The good news for the real estate sector has been the allocation of Rs. 48000 crore for PMAY along with 80 lakh houses expected to be completed by 2023 across the country. This has yet again highlighted the Government's vision of Housing for All. The move will not only boost the affordable housing segment but will also encourage a lot of homebuyers to buy their dream homes.
Through Ease of Doing Business 2.0, the Government continues to encourage digitization and fin-tech innovation. The focus on creation of digital infra, single portal for ease-of-doing business and digital skilling will strengthen the start-up ecosystem.
Overall, a progressive budget with the Government's emphasis on job creation, building a robust infrastructure and revitalizing the economy."
- Pritam Chivukula
Co-Founder & Director, Tridhaatu Realty
Treasurer, CREDAI MCHI