CII has welcomed the Union Budget 2013-14, which is growth and investment oriented. Coming against the backdrop of challenging global and domestic macro-economic conditions, the Budget makes laudable efforts to optimise growth drivers while addressing imperatives of inclusion. CII is happy that many of its suggestions have found mention in the Budget.

In a welcome change from fiscal slippage on other occasions, the fiscal deficit has been contained at 5.2 per cent of GDP in 2012-13 and targeted at 4.8 per cent of GDP for 2013 -14. While addressing fiscal consolidation, it focuses on inclusive and sustainable human development. Commendable initiatives have been taken in critical sectors such as agriculture, investment in manufacturing and infrastructure, MSME growth and capital market development among others.

CII particularly welcomes the stress placed on inclusive growth and development. Plan expenditure has been raised by almost 30 per cent, and inflationary pressures due to supply-side measures are sought to be dampened. This would encourage further monetary steps to lower interest rates which would catalyse investments. The expenditure on education and health-care has been increased substantially, while skill development has received a big boost. This is in line with CII’s emphasis on enhancing human development. CII welcomes the measures announced to increase investment in the infrastructure and the energy sectors. These include measures on the financing side such as allowing tax free bonds of upto Rs 50,000 crore and the operation of infrastructure debt funds. In addition, the Finance Minister has promised to address specific bottlenecks in sectors such as roads and oil and gas.

The measures to encourage micro, small and medium enterprises should go a long way in helping these firms to scale up and invest in technology. The three-year extension of nontax benefits after a unit attains medium size would encourage growth and employment creation.