Reflections on Budget 2023: Advocacy Director Yashodhara Dasgupta
On 1st February, India’s Finance Minister Nirmala Sitharaman presented the Union Budget 2023-24 – much-awaited as it is the last full Budget before the country heads into 2024 general elections.
The Budget has been received well for its pertinent focus on growth, youth and employment, energy transition, innovation, increased capital expenditure for infra developing, whilst aiming to maintain fiscal prudence.
The wider backdrop is important to consider — as economies were moving into post-pandemic recovery mode, other challenges emerged – supply chain disruptions from geopolitical events, recessionary trends in several large economies, and inflationary pressures. In fact, the Reserve Bank of India (RBI) had to undertake an inflation-focused monetary policy over the course of the last year. The Budget plan and outlays should now provide comfort on economic stability.
Private investment — including from international manufacturers and financial firms — would be essential partners in achieving the high-ambition plans of job creation, innovations across tech and sustainability, infrastructure development and industrial activity. UK businesses are well-placed to contribute across these elements – as leading manufacturers in India in a range of sectors, financing, skilling and education partners as well as a source of high-quality inputs to production.
However, at the heart of investment decisions are two key factors:
- Market Opportunities – even as growth may be under pressure in the short-term, there is little doubt about India’s economic strength combined with its vibrant workforce and diverse consumer-base. India has and will continue to be a leading contributor to regional and global stability.
- Business Environment – much has been done to rapidly increase the ease of doing business in the past decade. Such reforms require constant change with policies evolving as newer industries and innovations emerge.
In her speech, Minister Sitharaman outlines a specific focus to simplify, ease and reduce cost of compliance with respect to the financial sector, indicating that suggestions from public and regulated entities be incorporated when carrying out the proposed review of existing regulations. This is an important detail we welcome at the UKIBC.
In our view, a regulatory approach based on the below principles would be fundamental to business environment reforms and improvement:
- An evidence-based approach that assesses positive or negative consequences of proposed or existing regulations at the design stage;
- Stakeholder consultation process that allows ample time and opportunity for inputs and feedback into the proposed policies and regulations; and
- Adequate time for implementation of final guidelines.
We appreciate the Indian government’s sustained efforts towards this over the years and look forward to continuing to support this journey, working collaboratively with government and our members.