Budget 2022’s vision: A long-term, structured approach towards sustainability

By Manish Sharma

Finance minister Nirmala Sitharaman presented the Union Budget 2022 based on the four key pillars of the PM Gati Shakti initiative— inclusive development; productivity enhancement & investment, sunrise opportunities, energy transition, and climate action; and financing of investments. It continues to pave the way for sustainable economic growth in Amrit Kaal, backed by a consistent structured approach. Centred around technology, it underscores the government’s commitment towards Digital India and investment in public-private partnership through game-changing initiatives like the Gati Shakti programme, investment in the sunrise sectors and MSMEs, introducing policies for clean energy, among others. In fact, the seven engines defined under the Gati Shakti initiative; i.e., roads, railways, airports, ports, mass transport, waterways, and logistics infrastructure powered by clean energy and Sabka Prayas is bound to have a multiplier effect as it will help in the reduction of logistics costs, enable supply-chain efficiencies through seamless multimodal connectivity and logistics efficiencies, create employment opportunities for the youth— all this while using technology.

It was encouraging to see the focus on clean energy. We are hopeful that while formulating the policies later, the government will consider some fundamental measures such as localisation of electronic components to enable lower dependence on imports and for lowering the cost of EVs and charging infrastructure; incentivised large scale energy storage to meet the energy supply gap and reduce grid load and fluctuations; introduction of some form of fiscal incentives for commercial and industrial sectors to drive energy savings. Nevertheless, in-line with Panasonic’s business strategy, we are looking forward to details on the Battery Swapping Policy and contributing to India’s Electric Vehicle (EV) story. Also, the commitment to building a circular economy is the need of the hour as the world looks at sustainable solutions in a phased manner.

In my experience, with the current regime policy conversations are not limited to Budget day but take place throughout the year. From appliances and consumer electronics (ACE) industry, we are hoping for discussions on how exports can be further incentivised, and policy can be enhanced for design-led local manufacturing.

From an electronics sector standpoint, we expected reforms in Budget 2022 that would accelerate growth channelised by consumer demand. For instance, rationalising the GST from 28% to 18% on ACs and large screen size (>105cm) TVs will improve affordability and penetration as these are no longer considered luxury items. We will look forward to hearing from the GST Committee on this. Similarly, grading of customs duty structure and duty concessions on domestic manufacturing of wearables, hearable devices, electronic smart meters, and on mobile phone parts will further encourage local electronics manufacturing. Also, the introduction of Drone-As-A-Service to promote ‘Drone Shakti’ is yet another advanced step to encourage startups.

Lastly, from a common man’s perspective, no changes in tax structure is also a relief as it defines stability in current times. Though more money in the hands of the taxpayers could have helped drive consumption over the short term—a win-win for both industry and end-user.

Overall, this is a development oriented Budget which checks all the right boxes— increasing capex expenditure, minimum government maximum government, single window clearances for ease of doing business, encouraging public private partnerships for sunrise projects, easing the logistics burden, among other important initiatives. These steps will go a long way in generating employment, the need of the hour for our country.

The writer is CEO, Panasonic India