Home NewsStock Market News budget 2023: CAD, Green Hydrogen & growth are top 3 objectives of FM in Budget 2023: Anita Gandhi

budget 2023: CAD, Green Hydrogen & growth are top 3 objectives of FM in Budget 2023: Anita Gandhi

by WOOWinvest
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budget 2023: CAD, Green Hydrogen & growth are top 3 objectives of FM in Budget 2023: Anita Gandhi

Considering the current economic situation in India, the three prime objectives of the government in the 2023 Budget would be to control Current Account Deficit (CAD), spur domestic growth & create a proper ecosystem for the development of Green Hydrogen.

Controlling CAD: Globally higher inflation, tightening monetary policy, and lingering effects of a pandemic have created a gloomy global outlook. Many developed nations are expected to enter the recessionary phase, including India’s exporting destinations such as the US & the EU.

This will lead to weaker exports for some more time. India’s CAD rose to 9 years’ high of 4.4% of GDP in the quarter ending September 2022 from 2.2 % in the preceding quarter.

Therefore, the of the Budget would be to curb imports and boost domestic manufacturing. There is a possibility of a customs duty increase on many high-end electronic items, jewelry & many more items.

Drive Domestic Growth: India’s central bank went for aggressive rate hikes amid surging inflation levels. Since May 2022, the repo rate has been hiked by 225 basis points by the Reserve Bank of India (RBI).

The current policy rate stands at 6.25%, which is higher than the pre-pandemic period. Amid such rising interest rates, the government needs to focus on the growth of the economy, & give various incentives to small & medium size businesses for employment generation as well as the growth of their businesses. Though India had a bumper crop in 2022, due to the delayed monsoon, the sowing cost and other input costs had gone up along with labor costs. This left lower margins for Indian farmers.

This being a bigger section in India, Govt is required to come with more sops & incentives to farmers so that they can also contribute to India’s consumption story.

Developing Eco system for Green Hydrogen: Globally energy costs have gone up. The transition to a decarbonised economy presents an economic opportunity for renewal and growth. For this transition, India needs to focus not just on producing Green Hydrogen but on developing the technology the other sector will become import dependent.

R&D in public institutions needs partners from the private sector. A roadmap towards this in the Budget will lead India to have a proper position in the energy space.

Last but not the least, the government will also focus on fiscal consolidation through fiscal discipline and ensure the limit of fiscal deficit will not exceed.

(The author is Whole Time Director and Head of Institutional Business at )

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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