The Union Budget 2023-24, which was presented by Finance Minister Nirmala Sitharaman in the - Parliament on Feb 1, comes out as a growth-oriented plan with emphasis on measures to stimulate demand as well as positively impact the supply chain to sustain momentum in the Indian economy.
The government maintained its sharp focus to reduce fiscal deficit which is projected to hit 5.9 percent by end-FY24 from being pegged at 6.4 percent for FY23. As a result, the capital expenditure outlay on infrastructure development was significantly increased by 33 percent to Rs 10,00,000 crore, spurring a positive sentiment across several industries.
While road infrastructure spending is already on the uptick and going to increase from Rs 1,20,000 crore in FY22 to Rs 1,80,000 crore in FY23, the government further allocated additional funds towards key sectors - railways and agriculture - while offering fiscal benefits to start-ups and MSMEs (micro-, small-and medium-enterprises), opening new doors for them to flourish.
In a huge relief to the taxpayer, the government also increased the zero-income-tax slab from Rs 5,00,000 to Rs 7,00,000 and lowered the subsequent slabs in the 'new' Income Tax regime, enabling higher disposable incomes in the hands of citizens. The move has been widely applauded and labelled to bring a boost to the sentiment in the economic environment of the country.
Specifically for the automotive sector, it is being expected to bring a respite to the lower end of the vehicle industry, where sales of entry-level cars and two-wheelers have been struggling due to unaffordability of buyers at the bottom end of the pyramid.
The Budget also allocated additional funds towards replacing old, end-of-life vehicles of the Central and State governments as well as old ambulances, and the step is clearly aimed at driving new vehicle sales.
This story is from the 15th February 2023 edition of Autocar Professional.
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This story is from the 15th February 2023 edition of Autocar Professional.
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