CEOs bet on boost in consumption, infrastructure this Budget: BS Poll

India Inc sees uptick in investments, jobs

A majority of India’s chief executive officers (CEOs) expects the Union Budget on February 1 to stimulate consumer spending, speed up initiatives to modernise infrastructure, and spur job creation. 

This will be the second Budget of the Narendra Modi government’s third term. 

A dipstick survey of 17 CEOs conducted last week revealed that 82 per cent of the respondents expect the Union Budget to take steps to boost consumption. 

“Personal tax slabs need some recalibration. Unless money is in the hands of the middle-class, consumption won’t go up,” the CEO of a large hospital chain said. 

 

According to Crisil, India’s private consumption growth (in real terms) hit a two-decade low of 4 per cent in the last financial year (2023-24). Even though it has recovered sharply to 7.3 per cent in this financial year, this growth needs to be watched because part of the lift was from a low-base effect, it said in a report on January 8. 

“While there has been some speculation about a cut in the securities transaction tax (STT), this seems unlikely given the government’s revenue focus. Instead, there could be targeted relief for individual taxpayers through higher deductions under Section 80C and potential adjustments in the new tax regime to support consumption,” said Pranav Haridasan, managing director (MD) and CEO of Axis Securities. 

With the government increasing its spending towards creation of modern infrastructure including roads, highways and metros in the previous Budgets, over 70 per cent of the respondents said the infrastructure sector will continue to get maximum focus in the forthcoming Budget. 

Subhasish Chakraborty, founder, chairman, and MD of logistics firm DTDC Express, said, in alignment with India's ambitious goal of achieving a $7 trillion economy by 2030, the upcoming Budget presents a valuable opportunity to address key challenges related to efficiency, sustainability, and global competitiveness. 

“We encourage the government to prioritise investments in infrastructure modernisation, particularly in the creation of smart logistics parks and multimodal transport networks that embrace sustainable practices,” he said. 

Almost 53 per cent of the respondents expect the Budget to have a positive impact on their businesses while 70.6 per cent of the CEOs expect it to boost job creation and investment taking into account the previous occasions. 

Around 76 per cent of the respondents rated previous Budgets’ focus on digital infrastructure and innovation as positive, while 58.8 per cent expect the Budget to help the government achieve the $5 trillion economy size target in three years. 

 

When asked about whether US President Donald Trump’s tariff policy will impact India, 64.7 per cent of the respondents replied in the affirmative. 

According to Goldman Sachs, the Budget may make an overarching statement about long-term economic policy of the government towards 2047. 

 “We see continued emphasis on job creation through labour-intensive manufacturing, credit for MSMEs (micro, small and medium enterprises), promoting rural housing programmes, and sustained focus on domestic food supply chain and inventory management to control price volatility,” it said in a report. 

When asked about the unfinished agenda of previous Budgets, several CEOs said the rationalisation of the Goods and Services Tax would help the trade and industry. Likewise, initiatives that will help lower interest rates will also help improve growth rates for companies and the economy. 

 

Among sector specific measures, a CEO of a steel firm said, “We had expected a greater emphasis on steel-intensive growth, and stringent measures to protect the domestic market from steel dumping at predatory prices.”

(Dev Chatterjee with Prachi Pisal, Sohini Das, Ishita Ayan Dutt, Ajinkya Kawale, Peerzada Abrar, Udisha Srivastav and Jaden Mathew Paul)