The annual budget establishes the course and priorities for the following year & ideally it is in line with wider boundaries established by greater tenures like 5 years, 10 years, or even more like the current one for the following 25 years, known as “Amrit Kaal.” Annual Budgets are meant for progress review periodically.
The Govt. has launched a number of initiatives to increase infrastructure spending for creating employment and attract investments. It will majorly boost the business opportunities for SME entities due to higher demand.
The spending initiatives are briefed below.
Spending in Agro-industry:
Various initiative announced on digital infrastructure for farmers, promoting millets, creating wide storage capacity to curb the wastage. Besides this the Govt. has initiated new credit line for almost 20 lakh crore to fund these infrastructure creation initiatives.
Guaranteed Credit enhancement for MSMEs with reduced cost:
A larger corpus under a revised plan will allow for an additional 2 lakh crore of collateral-free guaranteed credit for MSME entities & will lower the cost of lending by 1%.
Spending in Health Sector:
Installation of 157 nursing colleges to support the healthcare sector.
Spending on Infrastructure:
Allocation of funds for infrastructure investment is enhanced by 33% to Rs. 10 lakh crore. This will become a major boost for economy as a whole & create conducive environment for investors in infrastructure projects.
The Railways received the highest-ever capital outlay of 2.4 lakh crore. It will pave the way for freight cost cutting & higher mobility for transportation.
End-to-end connectivity for the ports, coal, steel, and fertilizer sectors has been identified through 100 transport infrastructure projects.
Continued 50-year loan with no interest to state governments to encourage infrastructure spending
India intends to encourage green mobility by removing import taxes on capital goods needed to make the lithium-ion batteries used in electric vehicle batteries.
Now the moot point is searching answer to the first question…
As per overall assessment of Capex spending, it is nothing but opening of vast opportunities for SME businesses from all segments. SME busiensses are going to benefit majorily because SME entities can dynamically increase their operation which is cumbersome for a large corporate..
Further spending on Capex heels the economy for long term as compared to revenue expenditure & helps almost every segment of economy.
Challenges in front of SMEs
Opportunity never nocks twice, so it is highly important to have adequate funds for efficent operation. Additional working capital supports for immediate needs of working capital arise due to new opportunities. Moreover adequate funds helps a business to grow by leaps & bound resulting into unicorn entity.
What Experts say about Budget 2023?
Reuter said: India hikes spending, shuns ‘outright populism’ in last pre-election budget.
Reuter further added ……“The budget makes the need once again to ramp up the virtuous cycle of investment and job creation. Capital investment is being increased steeply for the third year in a row by 33% to 10 trillion rupees.”
The capital spending increase to about $122.3 billion, which would amount to 3.3% of gross domestic product (GDP), will be the biggest such jump after an increase of more than 37% between 2020/21 and 2021/22.
…. India’s annual budget laid out a slew of measures to bolster infrastructure for creating more jobs and attract investment…..
“……..The budget has tried to strike some balance between fiscal consolidation & growth, by continuing its focus on capital expenditure & creating fisical for that by cutting revenue expenditure. In addition, it has eased the tax burden on the middle income segment to improve consumer confidence & promote a more inclusive recovery….”