India Inc. confident of 6.5% GDP growth in FY23, expects capex, PLI focus in Budget: Deloitte survey

Corporate India is largely optimistic about the country's Gross Domestic Product (GDP) growing over 6.5% in the current financial year, according to a pre-Budget survey by Deloitte Touche Tohmatsu India LLP (DTTILLP). The survey reveals that the India Inc. expects that the upcoming Budget will seek to propel economic growth by boosting domestic demand and focusing on capital expenditure and production linked incentive (PLI), among others.

About 60% of respondents have expressed confidence about India growing above 6.5% in 2022-23, Deloitte said. "73% respondents hope the budget will fuel growth across industries by building strong domestic demand and focussing on capital expenditure," it added about the findings of the survey.

"Amongst industry sectors, chemicals (72%), capital goods (70%), and energy (67%) expressed confidence in growth being high, and felt that government initiatives, such as Atmanirbhar Bharat, PLI, and favourable monetary policies by RBI (to moderate retail inflation and maintain significant forex), increased spending on infrastructure, and research and innovation, will further this momentum," a release from Deloitte said about the findings of the survey.

"90% respondents commend the Atmanirbhar Bharat Scheme, with an overwhelming response from the electronics manufacturing, energy, and food processing sectors, expecting it to develop stronger supply-chain channels. More than 70% respondents agree that various Production Linked Incentives (PLI) schemes have been beneficial for the growth of their sector, with close to 60% respondents expecting an extension of the incentive in the coming years," it added.

The Deloitte survey also points out that the industry expects tax related changes amid the global uncertainties and an economic slowdown looming across geographies. An overwhelming majority of respondents, Deloitte says, see trade treaties as vehicles for increasing investment flows and providing exchange of emerging technologies to strengthen their role in global value chains (GVCs).

"Besides easing tax compliance, 45% respondents anticipate the government to reduce tax litigation, while 44% expect to gain clarification of tax laws and provisions such as TDS under section 194-O. Additionally, the industry is expecting the simplification of the capital gains tax structure and removal of ambiguities in the interpretation of tax, thereby making compliance easier. These will not only spur investment and economic growth, but also provide long-term relief to taxpayers and the tax administration," Deloitte said on the findings of the survey.