 "Sanjiv Chadha, MD & CEO, Bank of Baroda, BFSI Summit")
Public sector Bank of Baroda chief executive Sanjiv Chadha said the budget push on public capex will nudge private companies which have been holding back investments for many years, to open their purse-strings now, leading to the much-awaited revival of an investment cycle.
The budget proposes to increase public spending on infrastructure by a full 33 per cent to Rs 10 lakh crore next fiscal even as it guided towards fiscal prudence with fiscal gaps being pegged at 6.4 per cent for FY23 and 5.9 per cent for FY24 and at 4.5 per cent by FY27.
The budget also has penciled in a lower revenue growth forecast given the most-likely fall in nominal GDP from 15.5 per cent this fiscal to about 10 per cent next year.
Discounting the poor market reaction to the budget as a short term, Chadha told PTI that the budget clearly underlines some consistent themes as it has been doing in the past many years.
Even in the very uncertain times like now, there are four-five consistent budget themes in the current budget. And the biggest of them are fiscal prudence and the firm commitment to growth.
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From a record high of 9.5 per cent in the pandemic year, fiscal deficit is down to 6.4 per cent this year and is projected to go down further to 5.9 per cent next fiscal, Chadha said pointing to the finance minster always being fiscally prudent, even as she is allocating more on important sectors as well as supporting those sectors which need continued support.
The commitment to growth is very clear from the fact that in spite of the private capex missing for long the finance minister has budgeted for a hefty 33 per cent spike in capex at Rs 10 lakh crore.
"What I feel is that this should in fact will prod the cash-rich private sector companies to begin investing in capacity creation as the consumption demand is set to grow given the 40 percent higher tax exemption offered in the budget."
On the increased credit target of Rs 20 lakh crore for farm sector, which should help banking the most, he said purely from a lending perspective this may not be achievable given the many ifs and buts to the farm credit demand.
But if we looked at from farm and allied sector outputs and not from plain cash credit, this is a big step as the budget proposal also includes funding agri value chain financing. This vastly enlarges the scope of lending much wider and is doable possible.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
