Mr. Sanjay Aggarwal, Chairman & CEO, Paramount Communications Ltd., says, “The Budget announcement for building 80 lakh houses for weaker sections shall also provide a huge fillip to the construction industry, employment, and for various industrial products including wires and cables.”
The Union Budget 2022-23 presents an effective roadmap for Aatmanirbhar Bharat. It is most encouraging to see that the effective capital expenditure of the government is estimated at INR 10.68 lakh crore in 2022-23 at about 4.1 percent of GDP showing an increase over the last FY.
Such a substantial focus on infrastructure spending augurs well for the wires and cables industry which had been seeing a demand contraction for the past two years.
The focus on the INR 100 lakh crore Pradhan Mantri Gati Shakti Scheme in this year’s Budget shall have twin befits, viz, huge investments into the infrastructure including roads, railways, ports, waterways, etc. shall spur demand in the economy on the one hand, and help in bringing down the logistics costs in India from the current level of 14 percent to an internationally competitive level of 7-8 percent.
Typically, infrastructure investment has a multiplier effect of 2.5 times the expenditure incurred, besides providing huge employment opportunities for unskilled and semi-skilled labour.
The Budget announcement for building 80 lakh houses for weaker sections shall also provide a huge fillip to the construction industry, employment, and for various industrial products including wires and cables.
Watch: Wire & Cable Industry Year Review
Further increase in the outlay on the PLI scheme to nearly INR 5 lakh crore should help bring in very substantial private investment also, thereby resulting in a big boost to the economy and employment as also in increased demand for products like ours.
Also Read: UNION BUDGET 2022-23
It is also a matter of great satisfaction that an important issue which I had taken up with the government last year as the President of the PHD Chamber of Commerce & Industry, in light of the COVID-19 impact on the industry, has been accepted in this budget which has announced the use of surety bonds guaranteed by insurance companies in place of PBGs- Performance Bank Guarantees, for public procurement. This shall be a huge relief to the industry which has been suffering greatly on the liquidity front due to the large amounts stuck towards PBGs.
Another important request that has been accepted in this budget is the provision for provisional 75 percent payment mandatorily within 10 days by PSUs. Overall, a very positive and forward-looking Budget.