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CNBC-TV18 in partnership with Dhruva Advisors and FICCI polled over 100 CEOs ahead of the February 1 Union Budget to get a pulse check on what India Inc wants and hopes for. Most CEOs expect India’s growth story to remain relatively strong and see only a moderate impact of an impending global recession.
The continuation of infra thrust, a boost to the manufacturing ecosystem and minimising tax compliances – CNBC-TV18 in partnership with Dhruva Advisors and FICCI polled over 100 CEOs ahead of the February 1, Union Budget, to get a pulse check on what India Inc wants and hopes for.
Here are the key findings of the CNBC-TV18- FICCI - Dhruva CEO Budget Poll:
Most CEOs expect India’s growth story to remain relatively strong and see only a moderate impact of an impending global recession.
When asked about what should the be overarching macro economic theme this budget - infra spending topped the list, followed by manufacturing boost and consumption demand.
Close to half of the respondents feel that ease of doing business reforms would help boost the manufacturing ecosystem.
The majority of the CEOs are hoping for capacity utilisation to touch between 50-80 percent in the next two quarters - the verdict on demand outlook however is split.
Speaking to CNBC-TV18, Sanjiv Mehta, Former President of FICCI, and MD & CEO, HUL mentioned that while the public capital expenditure may not see the same percentage increase, he expects the absolute amount to go up by a healthy amount.
He said, "We also have to understand that we have to bring in competitiveness to manufacturing. For instance, logistics the cost in India is 400-500 basis points higher than a peer group. So when you build the infrastructure, this would also help in reducing the cost of logistics, which would make the industry much more competitive."
He emphasized the need for innovation and moving up the value chain, and suggested giving a fillip to research and development expenditure to take the country to an inflection point.
Anish Shah, Senior Vice President at FICCI and MD & CEO of Mahindra Group spoke about the current economic scenario of India on CNBC-TV18. He said that the government has already done a lot with the tax structure, Production-Linked Incentive (PLI) schemes, etc. and the private sector must now step up to support the government's efforts.
Shah said, "I would say that steps have been taken, the private sector has to step up now and work closely with the government and really make India the destination for the future for manufacturing."
Shah stated that the budget must focus on four key areas to drive the growth of the Indian economy: fiscal discipline, boosting manufacturing and exports, inclusive growth, and increased R&D spending. To make India a hub for manufacturing in the world, the government must reduce the cost of logistics and increase the spending on research and development.
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Subhrakant Panda, President of FICCI and Managing Director of Indian Metals & Ferro Alloys Ltd (IMFA), highlighted the current revenue buoyancy, which gives the Finance Minister some room to maneuver in the upcoming budget.
Panda emphasized the need for a growth-oriented budget, which will provide a boost to consumption and provide relief to the middle class. He acknowledged that while India is well placed, given the current global outlook, it cannot pre-emptively declare victory over inflation and other economic challenges.
Speaking to CNBC-TV18, Dinesh Kanabar, CEO of Dhruva Advisors, mentioned that India is competitive globally when it comes to corporate tax. He highlighted the need to extend the concessional manufacturing tax regime for at least 5 years to maintain competitiveness in the global market. He also emphasized the need to re-evaluate the threshold limit for taxation given the inflation scenario.
For full interview, watch accompanying video.