Union Budget 2023: PHD Chamber suggests 5 prolonged strategy to revitalize private investments

New Delhi: PHD Chamber of Commerce and Industry has said that Union Budget 2023-24 must focus on revitalizing private investments, consumption and employment creation.

“The Union Budget 2023-24 is being presented at a crucial juncture of geo-political uncertainties, high inflation and slowing world economic growth. At this juncture, calibrated steps to enhance domestic sources of growth would be crucial to maintain the steady economic growth trajectory,” said  Saket Dalmia, President, PHDCCI.

The Industry body has suggestd 5 prolonged strategy to revitalize the private investments including 1) enhance consumption 2) increase capacity utilization in the factories, 3) create employment 4) Enhance quality of social infrastructure 5) strengthen economic growth.

To enhance the momentum in private investments, there is a need to percolate of Ease of Doing Business at the factory level, Rationalization of cost of doing business, rationalization of taxation, state of the art infrastructure, and enhanced incomes in the agriculture sector would go a long way to revitalize the private investments in the country, said Dalmia.

To enhance the consumption in the economy, there is a need to increase the tax rebate benefits for consumption expenditure. Tax rebate on purchase of self-occupied house is given Rs.2 lakh only since the last many years. This needs to be enhanced with the wider scope of consumption expenditure such as purchase of more than 1 house, purchase of car, along with other durables. Consumption expenditure rebate must be enhanced to Rs. 5 lakh per annum. This will not only enhance the aggregate demand in the economy but also attract private investments, increase capacity utilization of the firms and create enormous employment opportunities in the economy, he added.

To enhance the capacity utilization in the economy though consumption is the most significant ingredient, reduced Costs of Doing Business at this juncture is also an important factor which increases the efficiency of the enterprises and enhance the production possibility frontiers.

Dalmia further suggested that to reduce the Costs of Doing Business including (1) costs of capital, (2) costs of power, (3) costs of logistics, (4) costs of land and availability of land and (5) costs of labour, availability of skilled labour (6) costs of compliances should not be more than the Top 3 manufacturing countries viz China, United States and Japan.

To enhance the employment creation in economy, we suggest further reforms in the Agri and Food Processing sector with a great infusion of public investments in the Agriculture infrastructure. Reforms in rural infrastructure logistics and a cold chain are required as it would help in increasing the level of food processing industry and rural entrepreneurship. This would lead to increased participation in the global agriculture and food exports. Exports of Agri and Food Processing products should be increased to the level of US$ 100 billion in next three years from the current level of around US$ 50 billion (2021-22), he said.

To enhance the employment opportunities, tourism is lled job seekers, thereby, providing employment to all sections of the society. In India, majority of the travel and tourism industry is composed of MSMEs. In this regard, development of tourism infrastructure is of paramount importance and should be accorded a priority to provide for a better experience, facilities, safety to the tourists and thereby enhance employment creation in the country and facilitate growth of MSMEs. The budget should provide adequate resources for the development of tourism infrastructure in the country.

To enhance the quality of social infrastructure, focus on twin merit goods of education with skill development and basic health with safety must continue with a longer-term vision. Focus on education as well as skill development is the basic ingredient in order to reap the dividends of our demographic advantage and would hold a crucial place for supporting India in its journey towards being AatmaNirbhar at a developed economy by 2047.

To strengthen the economic growth Infrastructure is one of the crucial sectors that propels overall growth and development of the Indian economy. The increased spending on infrastructure will give a multiplier effect to rejuvenate the aggregate demand in the economy. Undoubtedly, the robust growth of infrastructure is the key ingredient to realize the vision to become Atmanirbhar Bharat and a developed economy by 2047. At this juncture, we are sure that PM Gati Shakti National Master Plan and National Infrastructure Pipeline (NIP) will certainly boost the growth trajectory of infrastructure development in the country. We suggest that infrastructure investment in the economy must not be less than 10% of the GDP to achieve state of art infrastructure and to become a developed economy by 2047, Dalmia added.