Union Budget FY23
Budget
FY23E
Story in a Nutshell………………………………………………………2-7
Education………………………………..…………………………….….8-13
Healthcare and Public Health………………………………….14-18
Automotive and Mobility………………………………………….19-21
Technology, Media and, Telecom……………………………..22-26
Financial Services…………………………………………………….33-45
Energy Transition & Climate Change …………….……….46-48
Power & Renewables…………………………………………………49-51
Agriculture……………………….……………………………………..52-55
Chemical & Fertilizer………….………………………………….56-58
Infrastructure………………………………………………………...59-66
Building Materials………………………………………………..…67-68
Metals and Mining……………………………………………………69-70
1
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Table of
contents
Consumer Goods………………………………………………….....27-32
Story in a Nutshell
2
Story in a Nutshell
Rupee comes from…
Non-Tax Revenue (5%)
Union Excise Duties (7%)
GST & Other Taxes (16%)
Customs (5%)
Borrowings & Other
Liabilities (35%)
Corporation Tax (15%)
Non-Debt Capital Receipts (2%)
Budget
States' Share of Taxes &
Duties (17%)
Finance Commission &
other transfers (10%)
Pensions (4%)
Interest Payments (20%)
Other Expenditure (9%)
Subsidies (8%)
Rupee goes to…
Centrally Sponsored
Schemes (9%)
Central Sector Schemes (15%)
Defence (8%)
3
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Income Tax (15%)
Story in a Nutshell
Particulars (INR Cr)
FY22 (BE)
FY22 (RE)
FY23 (BE)
Difference
[FY22 (RE)—
FY22 (BE)]
Growth (FY23
Vs FY22)
Growth (FY23BE
Vs FY22BE)
Absolute
%
Receipts
3,483,236
3,770,000
3,944,909
286,764.09
174,908.95
13.25
Revenue
1,788,424
2,078,936
2,204,422
290,511.53
125,485.77
23.26
Capital
1,694,811
1,691,064
1,740,487
-3,747.44
49,423.18
2.70
Expenditure
3,483,236
3,770,000
3,944,909
286,764.1
174,908.94
13.25
Revenue
2,929,000
3,167,288
3,194,663
238,288.54
27,374.47
9.07
Capital
554,235.7
602,711.3
750,245.8
48,475.56
147,534.47
35.37
Ministry of Agriculture
131,531.2
126,807.9
132,513.6
-4,723.33
5,705.76
0.75
Ministry of Defence
478,195.6
502,883.5
525,166.2
24,687.92
22,282.61
9.82
Ministry of Education
93,224.31
88,001.52
104,277.7
-5,222.79
16,276.2
11.86
Pensions
55,873.12
63,005.12
65,840.81
7,132
2,835.69
17.84
7,620.4
4,558.61
7,621
-3,061.79
3,062.39
0.01
Ministry of Rural Development
131,519.1
153,558.1
135,944.3
22,038.99
-17,613.78
3.36
Interest Payments
809,701.3
813,791
940,651
4,089.68
126,860.02
16.17
By Ministerial allocation
Ministry of Home Affairs
Source: Union Budget 2022-2023
4
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Decoding the Budget Arithmetic
Story in a Nutshell
Union budget FY23 rests on 4 pillars
• Seven engines identified:
Roads, Railways, Airports,
Ports, Mass Transport,
Waterways and Logistics
Infrastructure
• Master Plan to be formulated
for expressways by
constructing 25,000 km
national highways in FY23
• 4 multimodal logistics parks
through PPP to be awarded in
FY23
• Postal & railways network to
be integrated
• Increased focus on
infrastructure projects
Digital capabilities for
Inclusive Development
•
•
•
•
•
Post Offices to be included in
the core banking system
Digital Banking Units (DBU) to
be setup in 75 districts
80 Lakh houses to be
constructed in FY23
2.8 Cr households to be
covered
Development of lagging
blocks of aspirational districts
Productivity Enhancement,
Energy Transition and
Climate Action
• Central and state level
systems to be integrated
through IT bridges
• Centre of excellence in urban
planning to be established
• Battery swapping policy to be
setup as an alternative to
charging stations in urban
areas
• Defence R&D to be opened up
for industry, startups and
academia
• Support to 5G under PLI
Scheme
• Chip embedded e-passports
to be issued
Financing of
Investments
• Greater fiscal space to be
provided to States for Capital
Investment
• Green bonds to be issued to
mobilize resources for green
infrastructure
• Digital Rupee to be
introduced by RBI
• Public investment to continue
to pump prime private
investment and demand
• Measures to be introduced to
aid Venture Capital and
Private Equity investment
5
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PM Gati Shakti
(National Master Plan)
Non-Exhaustive
Story in a Nutshell
Budget 2022-23: Story in a Nutshell
Govt increases the capital expenditure to reinvigorate the economy
Energy & Power
Budgetary Allocation:
Agriculture
Automotive
Metals & Mining
Education
Healthcare
Infrastructure
Budgetary Allocation:
Budgetary Allocation:
Budgetary Allocation:
TMT
Budgetary Allocation:
Consumer
Budgetary Allocation:
Building Materials
Chemicals & Fertilizers
Budgetary Allocation:
: Winner Sector
6
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Financial Services
Education
7
Education| Education budget increases by 18%; strong impetus for digital mode
of learning
1
2
3
One class One TV channel programme to be expanded to 200 TV
channels to reverse pandemic induced learning losses
Digital university to be built on networked hub & spoke model
with world class quality universal education offering
personalized learning experiences
E-content to be developed in all Indian languages and delivered
through digital teachers
4
Digital Ecosystem for Skilling & Livelihood (DESH-Stack e-portal)
to be launched to promote online training in ITIs for select
industries (Drone Shakti Mission; Drone-as-service)
5
5 academic institutions of urban planning to be awarded the
status of Centres of Excellence and provided an endowment fund
of INR 250 cr respectively
Sector Impact
Increased flexibility in
pursuing and access to
education programs.
Improvement in learning
outcomes, especially in rural
and marginalized regions.
Increased supply of skilled
labour force.
8
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Top 55 sector
sector announcements
Top
announcements
Industry
Industry
perception
perception
Education budget witnessed an ~18% increase with the
allocation of INR 1,04,278 cr to transform primary,
secondary and higher/vocational education segments
Universalization of quality education to be prioritized.
‘One class-one TV channel’ program of PM e-VIDYA to be
expanded from 12 to 200 TV channels enabling states to
provide supplementary education in regional languages
for classes 1-12
Skilling programs to be reoriented via NSQF aligned
industry standards to cater to the labor market changes
NSQF: National Skills Qualification Framework
Source: Union Budget 2022-2023
9
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Key Highlights of
India's Education
Budget
2022-23
Digital university to be set-up, offering courses in Indian
languages and ICT formats
Key policies and their impact
Policy
Policy
•
Primary &
Secondary
Education
•
•
•
•
Higher
Education
•
•
•
Vocational
Education/S
killing
Research
Institutes
•
•
•
To promote supplementary learning in regional languages, econtent to be developed across states
High quality e-content to be delivered through Digital Teachers
across the nation
One class One TV channel programme to be expanded to
200 TV channels
Setting up virtual labs and skilling e-labs to promote critical
thinking skills and stimulated working environment
PM E-Vidya initiative further expanded to launch a digital university
with world class quality universal education
Digital university to offer courses in Indian languages and be based
on networked hub spoke model
World class universities to be allowed to offer courses in financial
services and technology areas, free of Indian regulations
AICTE to take lead in transforming urban planning courses
Digital Ecosystem for Skilling & Livelihood (DESH-Stack e-portal) to
be launched to promote online training
750 virtual labs and 75 skilling e-labs to be set up
5 academic institutions of urban planning to be awarded the status
of Centres of Excellence and provided an endowment fund of INR
250 cr respectively
Source: Union Budget 2022-2023, Press Articles
Impact
Impact
•
•
•
•
Potential to reverse learning losses amongst
students belonging to low-income households
due to the pandemic
Uptake of local languages to be promoted.
Improved learning outcomes
across states
increase in flexibility and access to higher
education
Improved learning outcomes and higher
education enrollment in states
•
•
Potential to bridge skill gap in the market.
Increase supply of skilled labor.
•
•
Robust infrastructure facilities in academia
Industry-academia relationships not given
sufficient emphasis.
10
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Themes
Themes
Education budgetary allocation witnessed an ~18% increase,
reaching INR 1,04,277 cr
This may positively impact digital learning potential & post-lockdown remediations
Ministry of Education department wise budgetary allocation Budget 2022-23
INR Cr
60,000
22%
63,449
51,970
13%
36,032
40,000
40,828
20,000
0
DoSEL
Higher Education
RE 2021-22
DoSEL: Department of School Education and Learning, RE: Revised Estimates, BE: Budget Estimates
Source: Union Budget 2022-2023
BE 2022-23
11
Copyright © 2020 by Boston Consulting Group. All rights reserved.
80,000
Major schemes in DoSEL & Higher Education
Samagra Shiksha Abhiyaan witnesses a 25% increase, aiming to reverse pandemic induced learning losses. Digital India
e-learning mission to provide a single digital platform for skill augmentation and promotion of regional languages.
Key DoSEL schemes
Key Higher Education schemes
INR Cr
INR Cr
30,000
37,510
37,383
30,000
6,000
5,412
30,003
4,411
4,000
20,000
2,000
10,000
0
1
Samagra
Shiksha
340 550
3
DHRUV
RE 2021-22
National
Education
Mission
STARS
BE 2022-23
DoSEL: Department of School Education and Learning, RE: Revised Estimates, BE: Budget Estimates
Source: Union Budget 2022-2023
368
0
421
Digital India
e-learning
144
219
Research &
Innovation
RE 2021-22
Champion Services
Sector Scheme
BE 2022-23
12
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40,000
Healthcare & Public Health
13
Healthcare| Sector gains due to strong focus on digital health
and domestic manufacturing
1
2
3
National Tele Mental Health Programme to be launched for
better access to quality mental health counselling
and care services
Digital health registries and unique health ID will be rolled
out under Ayushman Bharat Digital Mission with INR 200 cr
allocation
PMJAY (Ayushman Bharat) budget almost unchanged; 18%
reduction in actual expenditure over previous year
4
Overall reduction in COVID-19 emergency response package
and vaccination budget allocation
5
Strong focus on domestic manufacturing in Pharmaceuticals
with a 173% increase in budget allocation
Sector Impact
Strong commitment towards
universal access to healthcare
through the rollout of the
National Digital Health
Mission and the National TeleMental Health Programme.
However, only marginal
improvement in focus on
service delivery through
flagship schemes.
14
Copyright © 2020 by Boston Consulting Group. All rights reserved.
5 sector announcements
Top 5 sectorTop
announcements
Industry
Industry
perception
perception
Total budget outlay for HC at ~ INR 2 lakh cr which has declined by ~4% Yo-Y as allocation for COVID vaccination has reduced. Overall growth ~12%
excluding COVID vaccination
Launch of National Tele Mental Health Program for better access to quality
mental health counselling and care services
National Digital Health Ecosystem to be rolled out; allocation for Ayushman
Bharat Digital Mission increased by 166% (INR 200 cr)
National Health Mission allocation increased 7% YoY from INR 34,447 cr to
INR 37,000 cr in FY 2022-23
Nutrition schemes merged under ICDS Umbrella scheme to include
Anganwadi Services, POSHAN Abhiyan & Scheme for Adolescent Girls
Flagship PMJAY scheme saw marginal YoY change in allocation at INR 6,412
cr
Note: 1. . HC sector includes allocation to DoHFW, Do health research, AYUSH, Nutrition, Do water and sanitation, FC
grants, Do Biotechnology and COVID allocation; 2including CS & CSS component-Centre Schemes/Centre Sector Schemes)
Source: Union Budget 2022-2023, Press articles
15
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Key Highlights
PM Ayushman Bharat Health Infrastructure Mission (ABHIM)2 allocation at
INR 5,156 cr in FY 2022-23. Focus on establishing critical care hospital
blocks, integrated public health labs, H&W centers
Backup
~12% rise in budget allocation for Healthcare1; allocation to MoHFW
increased 17% Y-o-Y
Budget Allocation – Healthcare (2022-2023)
Increased focus on
Production Linked
Incentive(PLI)
schemes
INR Cr.
200,000
100,000
50,000
37,000
200
10,000
NHM
24,432
3,201
Ayushman Bharat
36,800
0
6,412
5,156
PMSSY
PMJAY
PMABHIM
DoHFW
- Others
2,581
COVID
Vaccination
199,752
DoHR
20,263
13,192
3,050
Finance
Commission grant
Saksham
to States
Anganwadi &
POSHAN 2.0
merged
Nutrition
FC Grants
for health
Ministry
of Ayush
Do water and
sanitation
DoP
Do
Biotechnology
Total
Ministry of Health and Family Welfare
Y-o-Y Change
(Budget Est)
1%
43%
0.2%
Y-o-Y Change
(Revised Est)
7%
35%
100%
+++
18%
20%
1%
0%
3%
12%
377%
-26%
12%
-25%
4%
1%
0%
14%
32%
173%
-13%
10%
Note: 1. HC sector includes allocation to DoHFW, Do health research, AYUSH, Nutrition, Do Water and Sanitation, DOP, FC grants, Do Biotechnology and grants for COVID Vaccination
2.For Nutrition,POSHAN scheme has been merged with the umbrella ICDS scheme- Anganwadi Services, Poshan Abhiyan, Scheme for Adolescent Girls.
3. NHM – National Health Mission; PMJAY - Pradhan Mantri Jan Arogya Yojana; RSBY – Rashtriya Swasthya Bima Yojana; DoHR – Department of Health Research; DoHFW – Department of Health
and Family Welfare; PMSSY: Pradhan Mantri Swasthya Suraksha Yojana ; DOP: Department of Pharmaceuticals; PMABHIM- Pradhan Mantri Ayushman Bharat Health Infrastructure Mission
16
Source: Union Budget 2022-2023, Press Articles
Copyright © 2020 by Boston Consulting Group. All rights reserved.
NDHM allocation
increased 166%
2,244
5,000
67,221
Reduction in
COVID -19
emergency
response package
150,000
35,000 Cr
allocation in
2021-22
Key policies and their impact
Policy
PolicyAnnouncement
Announcement
Analysis
Analysis&&Impact
Impact
National Tele Mental
Health Program
• 23 tele-mental health CoE
to be established
• NIMHANS2 to be the nodal centre
• IIIT Bangalore to provide tech support
• Aimed at improving access to quality mental health counselling
and care services (+)
• However, no prima-facie budgetary allocation to scheme this year; roadmap not clearly laid out (-)
Ayushman Bharat
Digital Mission
• Allocation increased to INR 200 cr
• An open platform, National Digital
Health Ecosystem to be rolled out
• 166% increase in budgetary allocation (+)
• National Digital Health Ecosystem will include digital registries
(for health providers and health facilities), unique citizen health ID &
consent framework(+)
PM- Ayushman Bharat
Health Infrastructure
Mission
• Allocation at INR 5,156 cr
for FY 2022-23
• Operational guidelines released
in 2021
PM Swasthya Suraksha
Yojana
• Allocation increased to INR 10,000 cr
from INR 7,400 cr in FY 2021-22
• 35% increase in budgetary allocation; scheme aims to extend affordable
HC infra, through setting up/upgradation of AIIMS & govt. medical
colleges (GMC) (+)
Ayushman Bharat Pradhan Mantri Jan
Arogya Yojana (PMJAY)
• Allocation marginally increased
to INR 6,412 cr
• Revised estimates for 2021-22
was at INR 3199 cr
• 18% dip in actual expenditure; lower then budgeted spend for last three
years indicates slow pace of penetration of the scheme (-)
• Overall rising scheme penetration expected to decrease O-o-P HC spend
and increase HC inclusion (+)
Establishment and
strengthening
of NCDC1
• Allocation at INR 71.55 cr
(~43% increase)
• Scheme aims to advance efforts in prevention and control of infectious
diseases of public health importance and strengthening of other
health initiatives (+)
• Aims to develop the capacities of primary, secondary and tertiary care
health systems (+)
• Lower budgetary allocation compared to allocation given in operational
guidelines released by MoHFW (-)
Note: 1. NCDC: National Centre for Disease Control. 2. NIMHANS- National Institute of Mental Health and Neurosciences
Source: Union Budget 2022-2023, Press Releases
17
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Themes
Themes
Automotive and Mobility
18
Automotive and Mobility | Sector receives encouragement towards
sustainability, efficiency, and electric mobility
Top53sector
sectorannouncements
announcements
Top
Industry
Industry
perception
perception
Sector Impact
2
Clean & Sustainable Mobility
EV uptake in public transport in urban areas
Introduction of zero emission zones
3
Tariff measure to encourage blending of fuel
Additional duty of INR 2 per liter on unblended fuel
Increase in investment in EVs
is expected with rise in
demand from public transport
sector
Battery swapping technology
and zero emission zones to
catalyze adoption of EVs
No change in excise duties on
all vehicles
19
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1
Battery Swapping Policy
Development of battery or energy as a service
Policy to be formulated at inter-operability standards
Battery Swapping
Policy
Positive impact and encouragement for current and new players who can adopt battery swapping
technology and develop sustainable and innovative business models for battery or energy as a service,
especially for last mile connectivity
Private players can collaborate with State Governments to build EV ecosystems, inclusive of electric 2wheelers, 3-wheelers, buses and commercial vehicles
Clean &
Sustainable
Mobility
EV and related component manufacturers to benefit from increase in demand for clean tech in public
transport sector, which in turn gains reduction of operating costs and emissions
Introduction of zero emission zones will push more EVs into public transport systems, especially
in urban areas
Tariff measure to
encourage
blending of fuel
Unblended fuel will attract an additional differential excise duty of INR 2 per litre from 2 October 2022;
this is expected to boost production of ethanol for blended fuel, providing engine efficiency gains among
a greater fraction of petrol & diesel vehicles
PM GatiShakti
Master Plan for
Expressways
Investment of INR 20,000 cr and an expansion of 25,000 km will help improve highway infrastructure,
and realize new business potential for commercial vehicle fleet operators
Additional benefits include reduction in trip times, fuel consumption, & emissions
Inclusive
development in
agriculture
Farming sector to receive an MSP payment of INR 2.73 lakh cr along with other benefits; this is expected
to aid rural economic sentiment and increase demand for entry-level bikes,
scooters & cars in the rural market
Source: Union Budget 2022-2023
20
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Key budget snippets impacting Automotive and Mobility
Technology, Media and,
Telecom
21
TMT Sector gains as GoI's investment focus in digital infrastructure to accelerate
digital push and set India on a path of creating a robust digital economy
Top55sector
sectorannouncements
announcements
Top
Sector Impact
5G spectrum auction in 2022
2
GoI to allocate INR 4,000 cr for PLI scheme to encourage
5G design-led manufacturing
3
Optical fibre contracts to be awarded under PPP to connect
all villages by 2025
4
Government to setup panel to promote audio-visual and
gaming (AVGC) sector
5
Startups to be promoted to facilitate 'Drone Shakti'
The announcement around the 5G
spectrum auction and 100% fiberization led
by the PPP model is expected to provide
an impetus to build ubiquitous and robust
internet connectivity, thereby, bridging
the digital divide and establishing a
conducive environment for growth across
industries.
Design-led initiatives for 5G under the PLI
scheme and 5% of Universal Service
Obligation Fund for R&D purposes is likely
to support the ‘Make in India’ story,
contributing to making India a
manufacturing hub.
22
Copyright © 2020 by Boston Consulting Group. All rights reserved.
1
Industry
Industry
perception
perception
5G
• Spectrum auctions to be conducted in 2022 to roll out
5G Services in 2023.
• Government to allocate around INR 4,000 cr for PLI
scheme to encourage 5G design-led manufacturing
IP Services & Services Exports
• Government to setup panel to promote audio-visual and
gaming (AVGC) sector
Devices / Electronics
• Startups to be promoted to facilitate 'Drone Shakti'
• Duty concessions to fuel electronics manufacturing
Source: Union Budget 2022-2023
23
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Key Highlights of
India's Digital Push in
Budget 2022
Connectivity
• By 2025 all villages to be provided with affordable
broadband and mobile services through optical fibre
connectivity.
• Optical fibre contracts to be awarded under PPP
Expenditure budget estimates by respective Ministry
Ministry of
Communications
Ministry of Electronics and
Information Technology
+138%
Ministry of Information and
Broadcasting
+49%
84,587
58,737
9,721
9,581
Budget
2021-22
Revised
2021-22
+6%
14,300
4,071
3,765
3,981
Budget
2022-23
Budget
2021-22
Revised
2021-22
Budget
2022-23
Budget
2021-22
Revised
2021-22
Budget
2022-23
• The budgetary allocation for ministry of communications went up 138% over revised 2021-22 number. This included an allocation of INR 52,153.58 cr
towards support to PSUs, of which INR 44,720 cr will be infused as capital into loss-making BSNL for 4G spectrum, technology up-gradation and
restructuring in BSNL.
• Budgetary allocation under Ministry of Electronics and IT received a 49% boost over revised 2020-21 budget. Digital India Program allocation increased
to INR 10,676.18 cr from INR 6,388 cr in last FY, with INR 5,300 cr towards PLI for Large Scale Electronics and IT Hardware. Allocation to promotion of
Digital payments saw a sharp decline to INR 200 cr from INR 1,500 cr in the last FY.
• Information & Broadcasting Ministry's allocation was INR 3,980.77 cr, 6% higher over 2020-21; of this, INR 315 cr was allocated to Prasar Bharati
Source: Union Budget 2022-2023; BCG Analysis
24
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35,550
Key policies and their impact- 1/2
5G
Connectivity
PolicyAnnouncement
Announcement
Policy
• Spectrum Auctions: 5G spectrum auctions to be held in
2022 to roll out 5G services in 2023 in a bid to boost 5G
spread, infuse liquidity and create an enabling
environment for investment in 5G networks
• PLI Scheme: The government will allocate around INR
4,000 cr for a production linked incentive (PLI) scheme
to encourage design-led manufacturing of 5G equipment
• Remote connectivity: 5% of annual connections under
Universal Service Obligation Fund to be allocated to
promote R&D and commercialize broadband to boost
digital service access in villages
• Optical Fibre Deployment: Contracts for optic fibre in
all villages, remote areas will be given under Bharatnet
through a PPP model in FY23, which will be aimed for
completion by FY25
• Capital Infusion into BSNL: INR 44,720 cr capital to be
infused into BSNL for 4G spectrum, tech up-gradation
and restructuring
Source: Union Budget 2022-2023, BCG analysis
Impact
Impact
• The move is likely to bring the next wave of data
accessibility and enhance the quality of digital
interactions while also providing an additional thrust to
investment in new technologies in the tech and telecom
sectors
• The proceeds from 5G auctions are expected to be
amongst the largest contributors to non-tax revenue for
the government
• 5G launch is likely to have a direct impact on sales of
smart TVs, as high-speed connections will drive
consumers to upgrade to superior devices to stream
content
• Boosting connectivity in remote/rural areas will in-turn
facilitate access to digital services such as egovernance, telemedicine and e-education at the
primary level of village administration
• Setting up connectivity infra will also catalyze the startup and SME landscape, boosting direct sales of products
via social media and other online platforms
• However, a prompt approach will be needed to avoid
delays given the PPP model's mixed experience in other
infra sectors
25
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Topics
Topics
Topics
IP Creation
& Service
Exports
Drones
Policy Announcement
Impact
• AVGC Task Force: Setting up of a task force to promote
the Indian AVGC sector and bolster service exports, coproductions, domestic intellectual property and
consumption in India and abroad
• The AVGC sector involves creative content creation,
which is human capital intensive and cannot be
automated. The task force is likely to provide impetus
to job creation, in turn strengthening the supply base
of animation, VFX, gaming and content studios for
serving domestic markets as well as global demand.
• While drones are already being used in the agri sector
(crop assessments, land records) and railway security,
their use is likely to spread to other industries
• The drone space is expected to open up to private
players with more companies and startups shooting up
investments
• Drone Shakti: Startups will be promoted to facilitate
‘Drone Shakti’ through varied applications and for
Drone-As-A-Service (DrAAS). In select ITIs, in all states,
the required courses for skilling will be started
26
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Key policies and their impact- 2/2
Consumer Goods
27
Consumer| No key policy update/ short-term consumption boost; rural, digital
and infrastructural push to drive consumption in the near-term
1
2
3
4
5
Push towards digitalization: Rural digitalization, financial support for
digital payment ecosystem, introduction of digital rupee and startup
support to open doors for e-services/ e-commerce
Impetus to domestic aviation: Allocation of INR 10,667 cr (up 231%
from last year) towards civil aviation sector; INR 51,971 cr allocated to
settle Air India's debt
Export push for fashion and jewellery: Custom duty exemption in the
textile and fashion sector; simplified regulations for export of
jewellery via e-commerce
Affordable Housing: Allocation of INR 48,000 cr towards affordable
housing to have a cascading effect on Bazaar sectors
Support for Hospitality: Extension of Emergency Credit Line Guarantee
Scheme (ECLGS) and expansion of cover by INR 50,000 cr for
hospitality sector
Sector Impact
Digitalization to have a multiplier effect
on the e-commerce sector and boost
online consumption of consumer goods
Domestic aviation industry to benefit from
regional connectivity schemes; funds to
pay off Air India's liabilities
Export push to textiles as well as gems and
jewellery sector
No key policy update in the form of
formalization of retail sector or short-term
consumption boost due to increase in
disposable income of taxpayers (led by
revision in tax slabs)
28
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Top55sector
sectorannouncements
announcements
Top
Industry
Industry
perception
perception
Budgetary allocation in industries related to Consumer Practice
Allocation to Ministries in budget announcements, in INR cr
+3%
131,531 132,514
131,519 135,944
+40%
4,323
6,037
Agriculture and Rural Development Fisheries, Animal
Farmers Welfare*
Husbandry and
Dairying
* Doesn't include Agri inputs (Chemicals, petrochemicals, fertilizers, etc.)
+125%
1,309
2,942
Food Processing
Industries
2021-22
+36%
+241%
15,700 21,422
3,632 12,382
MSME
Textiles
+18%
2,027
2,400
Tourism
+231%
3,225 10,667
Civil Aviation
2022-23
• Expenditure for Textiles increased by 241%, driven by increase in allocation for "Procurement of Cotton-by-Cotton Corporation
under Price Support Scheme" from INR136 cr to INR 9,243 cr
• Outlay for Civil Aviation risen by 231%, surged by higher disbursement for Air India Asset Holding Ltd. from INR 2,269 cr to INR
9,260 cr
• Allocation to Food Processing enhanced by 125% under the following schemes:
– Introduction of Production-Linked Incentive (PLI) Scheme for Food Processing Industry with an outlay of INR 1,022 cr
– 80% raise for Prime Minister Formalisation of Micro Food Processing Enterprises Scheme (PMFME)
– 29% increase in Pradhan Mantri Kisan Sampada Yojana (PMKSY)
Source: Union Budget 2022-2023
29
Copyright © 2020 by Boston Consulting Group. All rights reserved.
+1%
Push towards rural sector and digitalization to boost FMCG consumption; focus
on affordable housing to have a cascading effect on Bazaar sectors
FMCG
Bazaar
Source: Union Budget 2022-2023
Policy Announcement
Impact
• Rural digitalization: Affordable broadband and
mobile service proliferation in rural and remote
areas to open doors for e-services
• Rural digitalization to give a boost to
e-commerce and increase consumption
of FMCG products from rural areas
• Tax reduction for cooperatives: Alternate
minimum tax rate reduced for cooperatives from
18.5% to 15%
• Cooperatives in the FMCG space to get
a boost
• Startup/ new manufacturing to get a boost: Tax
incentive given to startups/ new manufacturing
companies extended by one year, considering
delay in plans due to pandemic
• Emergence of new age Indian startups
e.g. DTC companies catering to white
spaces in the industry is expected
• Affordable housing – INR 48,000 cr allocated; 80
lakh houses will be completed for the identified
eligible beneficiaries of PM AwasYojana, both
rural and urban
• Housing is expected to benefit from
this move with cascading effect on
bazaar sector – paints, tiles,
sanitaryware, pipes, wires etc.
30
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Themes
Export push to Textiles as well as Gems and Jewellery sector
Textile/
Fashion
Gems and
Jewellery
Source: Union Budget 2022-2023
Policy Announcement
• Custom duty exemption on the following:
– Embellishment
– Trimming
– Fasteners
– Buttons
– Zipper
– Lining material
– Specified leather
– Packaging boxes
Impact
• Positive for exports of handicrafts,
textiles, leather garments, leather
footwear etc.; expected to benefit
textile/ footwear export players
• Cutback on customs duty on cut & polished
• Lower import duty on cut and polished
diamonds, gems from 7.5% to 5%, nil custom duty
diamonds & gems to give an impetus to
on simply sawn diamonds
domestic jewellery manufacturing
• Customs duty on imitation jewellery; duty of at
• Boost for domestic imitation jewellery
least INR 400/kg to be paid on import
players owing to increase in import
duty
• Simplified regulatory framework to be formulated
for facilitating export of jewellery via e• Simple regulations for exports via ecommerce
commerce is a boon for the Gems and
Jewellery exporters
31
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Themes
Impetus given to domestic Aviation and Hospitality sectors
Civil Aviation
Hospitality
Source: Union Budget 2022-2023
Policy Announcement
• Increased sector allocation: 231% increase in
allocation at INR 10,667 cr to disburse Air India's
assets and improve regional connectivity
• Divestment of Air India: INR 51,971 cr allocated
towards settlement of Air India's debt in revised
capex of budget 2021-22
• E-passports with embedded chip to roll
out in 2022-23
• Extension of the Emergency Credit Line
Guarantee Scheme (ECLGS) up to March 2023
and expansion of cover by INR 50,000 cr for
hospitality and related sectors
• Implementation of 8 ropeway projects in FY23
on PPP basis
Impact
• Divestment of Air India; regional
connectivity schemes to give impetus
to domestic aviation industry
• E-passports to push digitalization in
the aviation sector
• Expansion of ECLGS to Hospitality
sector will help MSME's to mitigate
COVID impact
• Ropeway projects will improve access
to difficult mountainous terrains and
promote hospitality sector
32
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Themes
Financial Services
33
Financial services | Sector gains due to strong focus on digital, MSMEs and
financial inclusion
1
2
3
1.5 lakh Post offices to be connected to core banking system
enabling inter-operability
IT based management of land records, ECLGS1, CGTMSE2,
RAMP3 and integration of portals to accelerate MSME's
growth
RBI to introduce digital rupee to boost digital economy,
better currency management. 75 digital banking units to be
set-up in 75 districts by scheduled commercial banks
4
IBC4 to be amended to address faster resolution and crossborder insolvency
5
Open platform for digital health eco-system to boost health
insurance penetration in the medium term
Sector Impact
• Budget has provided impetus for
sustainable growth of Financial
services sector
• Key announcements include
support for MSMEs, affordable
housing segment and
introduction of digital currency
• Initiatives on financial inclusion
agenda will go a long way to
build an open, digital and
inclusive India with a long-term
vision
Note: 1. Emergency Credit Line Guarantee Scheme 2. Credit Guarantee Trust for Micro and Small Enterprises 3. Raising and Accelerating MSME Performance
4. Insolvency Bankruptcy Code
34
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Top 55 sector
sector announcements
announcements
Top
Industry
Industry
perception
perception
In 2022, 100% of 1.5 lakh post offices will come on the core
banking system, promoting financial inclusion and access to
accounts through net banking, mobile banking, ATMs and
also provide online transfer of funds between post office
accounts and bank accounts
Will be helpful especially for farmers and senior citizens in
rural areas, enabling inter-operability
Currently, post offices provide savings account services and
payments bank services through the India Post Payments
Bank
The government also proposed to set up 75 digital banking
units in 75 districts by scheduled commercial banks. Inaddition, the financial support for digital payment
ecosystem announced in the previous Budget will continue
in 2022-23
Source: Union Budget 2022-2023
35
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Post offices to be
connected to core
banking system
enabling customers to
get access to digital
financial services
• ECLGS1 cover has been expanded by INR 50,000 cr to total of INR 5 lakh cr,
with the additional amount for the hospitality and related enterprises.
ECLGS cover has been extended up to Mar '23
• Raising and Accelerating MSME Performance (RAMP) programme with
outlay of INR 6,000 cr over 5 years will be rolled out to make the MSME
sector more resilient, competitive and efficient
• In addition, Udyam, e-Shram, NCS, ASEEM portals will be interlinked to
support MSMEs. They will now perform as portals with live organic
databases providing G-C, B-C & B-B services such as credit facilitation,
enhancing entrepreneurial opportunities, etc.
Note: 1. Emergency Credit Line Guarantee Scheme 2. Credit Guarantee Trust for Micro and Small Enterprises
Source: Union Budget 2022-2023
36
Copyright © 2020 by Boston Consulting Group. All rights reserved.
ECLGS, CGTMSE, RAMP
and integration of
portals to accelerate
MSME's growth
• CGTMSE2 scheme will be revamped with infusion of INR 2 lakh cr for MSMEs
and to expand employment opportunities
Being described as “the Aadhaar for land", it is a
number that would uniquely identify every
surveyed parcel of land and prevent land fraud
The Centre plans to issue a 14-digit identification
number to every plot of land in the country
within a year’s time
ULPIN1 land database to be integrated with
revenue court records, bank records and Aadhaar
IT based management of land records to promote
and facilitate retail and MSME lending
Note: 1. Unique Land Parcel Identification Number
Source: Union Budget 2022-2023
37
Copyright © 2020 by Boston Consulting Group. All rights reserved.
ULPIN1 to
facilitate ITbased
management
of land
records
CBDC1 to provide significant benefits, such as reduced
dependency on cash, higher seigniorage due to lower
transaction costs and reduced settlement risk using
blockchain and other technologies
Digital rupee to
be introduced by
RBI to boost
digital economy,
better currency
management
CBDCs, if both countries have it, can make time-zone
differences disappear by replacing bank settlements with
currency delivery, which can take place even if the payment
systems are closed
Specific tax regime for virtual digital assets introduced. Any
income from transfer of any virtual digital asset to be taxed
at the rate of 30%
Note: 1. Central bank digital currency
Source: Union Budget 2022-2023
38
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Will lead to a more stable, efficient, reliable, regulated,
and legal tender-based payment option. 9 countries have
launched their CBDCs while 14 countries including China
and South Korea are in the pilot stage
CBDCs, depending on the extent of its use, can cause a
reduction in the transaction demand for bank deposits.
Since transactions in CBDCs reduce settlement risk as well,
they reduce the liquidity needs for settlement of
transactions
If banks begin to lose deposits over time, their ability for
credit creation gets constrained, which will further have an
impact on the economy
However, notwithstanding the benefits of CBDCs vis-à-vis
bank deposits, since CBDCs are currency and therefore do
not pay interest, their impact on bank deposits may
actually be rather limited
Source: Press Releases; Analyst reports
39
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Potential impact of
CBDCs on Banking
Sector
In addition, by providing a genuinely risk-free alternative to
bank deposits, they could cause a shift away from bank
deposits which in turn might reduce the need for
government guarantees on deposits
Covid-hit affordable housing sector gets boost
80 lakh houses to be completed for
identified beneficiaries of PM Awas
Yojana in FY23
Current progress on PMAY
• Pradhan Mantri Awas Yojana (PMAY) aims to build 1
cr. homes in urban and rural India by 2022
• Against the total assessed demand of 1.12 cr.
houses, 1.14 cr. houses have been sanctioned
under PMAY (Urban)
INR 48,000 cr has been allocated to the
housing projects under Prime Minister’s
Housing Scheme
Source: Union Budget 2022-2023; Press Releases
• Of these, a total of 91.5 lakh houses were
grounded for construction and 53 lakh houses
were completed / delivered,
as at Dec 2021
40
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Announcement
Sovereign Green Bonds
Sovereign green
bonds introduced
to move towards a
low-carbon
economy
• For the first time, the government plans to include sovereign green
bonds for funding green infrastructure
About green bonds
• Debt instruments differ from conventional fixed-income securities- the issuer pledges
to use the funds for projects that have positive environmental or climate effects
• Since its debut in 2007, the green bond market has grown steadfastly
• Funds will be used for projects that will help reduce carbon intensity
• To be deployed in public sector projects
Impact
• The move is big boost especially with India making aggressive strides towards a low-carbon economy with
ambitious targets like achieving a robust 175 gigawatt of renewable energy capacity by the year 2022
Source: Union Budget 2022-2023; Press Releases
41
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Government’s borrowing programme in FY23
Amendments to be made to the IBC1 seeking to make crossborder deals easier and speed up voluntary unwinding of
defaulting borrowers
The changes will come about 6 years after the IBC1 was
legislated that promised to institutionalize corporate
restructuring through a modern, contemporary mechanism
Cross-border insolvency rules will allow lenders to recover
dues from defaulting borrowers disposing of foreign assets
and promoters’ personal assets parked in offshore locations
1. Insolvency and Bankruptcy Code
Source: Union Budget 2022-2023; Press Releases
42
Copyright © 2020 by Boston Consulting Group. All rights reserved.
IBC1 to be amended to
address faster
resolution and crossborder insolvency
Centre for Processing Accelerated Corporate Exit (C-PACE) to
facilitate and speed up the voluntary winding-up period of
companies from 2 years to less than 6 months
About GIFT IFSC
IFSC1
Tax incentives to
would promote
offshore banking
activities and fund
management
• GIFT-IFSC1 is the maiden international financial services centre in India
• Objective is to develop a world class smart city that becomes a global
financial hub with the development of an IFSC1
Ease of doing business in IFSC
• An international arbitration centre to be set-up for speedy dispute resolutions
• Proposed to set-up world-class foreign universities in the GIFT City
• To further promote IFSC1, tax exemption are provided to income from
– over-the-counter derivatives issued by an offshore banking unit
– income received from portfolio management services in IFSC1
Impact
“The exemption of income tax would promote various business activities such as ship leasing and financing,
offshore fund management and offshore banking activities in GIFT IFSC1”
- Tapan Ray, MD and Group CEO, GIFT City
1. International Financial Services Centre
Source: Union Budget 2022-2023; Press Releases
43
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Tax Incentives
LIC
Surety bonds as substitutes for bank guarantees made acceptable in
government procurements
• IRDA has made frameworks for issue of surety insurance contracts
for infra structure projects
• Targeted to reduce indirect costs for suppliers and contractors
An open platform for National Health Digital ecosystem
• Digital registries of health providers/facilities
• Unique health identity, consent framework and universal access
• Targeted to widen access to health insurance coverage
• Will help insurers in better risk assessment
Budget allocation for Ayushman Bharat PM-JAY scheme increased to
INR 7,857 cr; approx. 23% increase compared to FY22
Tax relief on payment of insurance annuity/lump-sum amount made to
the differently abled dependent, during the lifetime of
parent/guardian attaining the age of 60 years
Source: Union Budget 2022-2023; Press Releases
44
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Key
announcements
in the insurance
sector
Public issue of LIC expected shortly
• IPO crucial for FY22 disinvestment targets; expected to raise
approx. INR 90,000 cr
• Govt. has urged SEBI to fast-track the regulatory process
Energy Transition and
Climate Action
45
Climate Action | Sector gains strong focus due to PM's commitments
Key highlights supporting India's Climate Change mission
2
3
Funds for Climate Action
• Government promoting thematic funds, it's share to be limited to 20%
• Private and government partnership to manage funds by blended finance
• Issue sovereign green bonds for funding green infrastructure
Encouraging Greener Energy/Energy Storage
• 280 GW installed solar capacity by 2030
• Allocate INR 19,500 cr boosting solar PV manufacturing under Production Linked
Incentive (PLI) scheme
• Mandated 5-7 per cent biomass pellets to be mixed with coal to generate
electricity
• Energy storage systems to be given infrastructure status for ease of financing
• Involve solar/other forms of renewable energy in new large scale infrastructure
projects, for instance, Ken-Betwa Link Project, expected to include 103 MW of
Hydro and 27 MW of Solar power
Concrete steps towards climate action
• Prioritize Energy Transition, and Climate Action
• Introducing yojanas that emphasize on decarbonization and growth of renewable
energy, including, Panchamrit commitments; issuance of green bonds etc.
• Serving global capital for sustainable & climate finance through dedicated
facility in GIFT city
Sector Impact
• Growth of private equity
partnerships in green energy
space
• Opportunities to amalgamate
renewable energy installation
with large scale infrastructure
projects
• Marginal reduction in carbon
footprint from coal based
thermal power plants
46
Copyright © 2020 by Boston Consulting Group. All rights reserved.
1
Power & Renewables
47
Power & Renewables| Sector set to grow in view of government's strong focus
on standardization and energy efficiency
1
Finance for renewables: Allocation of INR 19500 cr in PLI for
solar modules. Plans to issue Sovereign Green Bonds.
2
Electric Vehicles: Plans to bring a battery swapping policy
out and to formulate inter-operability standards
3
4
5
Digital Infrastructure & Energy Storage: Data Centers and
Energy Storage Systems to be included in the harmonized list
of infrastructure.
Thermal Power Plants: 5-7% biomass pellets to be co-fired in
thermal power plants. Four pilot projects for coalgasification and coal-to-chemical technology will be set up.
Industry perception
Sector Impact
• With emphasis on capacity
expansion, there is a significant
push to achieve India's Transition
Targets.
• Key areas of impact included
electric vehicles, PLI for module
installation and Green Bonds.
• Importance has been given to
standardization in both, electric
vehicles and the commercial
buildings
Energy Efficiency: Focus on standardizing energy efficiency
metrics for commercial buildings
48
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Top 5 sector announcements
Key policies and their impact
Policy Announcement
Impact
Finance for
Renewables
• PLI worth INR 19500 cr for manufacture of high efficiency
modules
• Sovereign Green Bonds will be issued
• Enhanced financial support for setting up Distributed
Renewable Energy projects in border villages
• Availability of additional funds for renewable
capacity expansion
Digital Infrastructure
& Energy Storage
• Data Centers and Energy Storage Systems including dense
charging infrastructure and grid-scale battery systems will
be included in the harmonized list of infrastructure
• This will facilitate credit availability for digital
infrastructure and clean energy storage
Electric Vehicles
• Battery swapping policy will be brought out
• Inter-operability standards will be formulated for the same
• Likely to improve efficiency and flexibility in the
EV ecosystem.
Thermal Power
Plants
• 5-7% biomass pellets will be co-fired in thermal power
plants
• Four pilot projects for coal-gasification and coal-tochemical technology will be set up.
• Reduction in overall carbon emissions as a step
towards greener thermal power generation
Energy Efficiency
• Energy efficiency and saving measures will be promoted in
large commercial buildings through the Energy Service
Company (ESCO) business model
• This will facilitate capacity building and
awareness for energy audits, performance
contracts, common measurement & verification
protocol
Source: Union Budget 2022-23
49
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Themes
Agriculture
50
Agriculture | Focus on supporting assured income to farmers, boost Agri-value
chain through Ag-Tech
1
2
MSP direct payments for wheat and paddy farmers; budget
outlay for PM-Kisan increased marginally
PPP for delivery of digital and hi-tech services to farmers
3
New blended fund to be set up by NABARD to finance Agri
start-ups and rural enterprises
4
'Kisan Drones' to be promoted for crop assessment,
digitization of land records, spraying of insect pesticides
5
Schemes to reduce reliance on oil seed imports; 'Branding
Millet', to support post-harvest value addition for exports
6
Chemical-free natural farming to be promoted to boost
sustainable agriculture, exports, and farmer's income
Industry perception
Sector Impact
• Push towards Ag-tech revolution
to enhance to enhance Agri
value chain
• Co-opt private sector
participation and promote startups to create the required
impetus on digital and
technology
• Push towards greater
sustainability in Agri through
promotion of chemical free
farming
51
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Top sector announcements
Backup
Marginal increase in Agri budget outlay for FY23
Implication on the sector
Budget Allocation for Central Sector Schemes/Projects (in INR cr)
Neutral
100,000
15,500
68,000
1,500
500
500
100
100
9
1
105,710
19,500
50,000
0
Y-o-Y Change
PM-Kisan
5%
MISS 1
NA
PMFBY
-3%
MIS-PSS
0%
Formation
and
Promotion
of 10,000
FPOs
-29%
AIF
-44%
PM-KMY
100%
NBHM
NA
Distribution PM-AASHA
of Pulses
for Welfare
Schemes
-97%
Total
100%
Continued focus on core
central sector schemes with
consistent budget
allocation.
PM Kisan allocation up by
4.6%, however, it is only
0.7% higher when compared
with RE of last fiscal. Similar
allocation to ensure uniform
disbursement of cash to
farmers.
-100%
1. Under MISS (Modified Interest Subvention Scheme), short term crop loan of up to 3 lakh is available to farmers engaged in Agriculture and
other allied activities at benchmark rate of 9%. Gov provides 2% Interest Subvention on the benchmark rate.
Note: Y-o-Y changes reflect Announced Budget Allocation in FY22 vs FY23
Source: Union Budget 2022-2023
52
Copyright © 2020 by Boston Consulting Group. All rights reserved.
150,000
Backup
RKVY allocation increased significantly; new schemes
launched under Krishionnati Yojana
Implication on the sector
Neutral-Positive
20,000
15,000
10,000
10,433
1,395
900
600
198
1,900
305
1,000
60
325
500
17,616
Krishionnati Yojana
introduced with a set of 10
schemes and a budget outlay
of INR 7,183 cr.
5,000
0
RKVY allocation increased by
422% (from INR 2,000 cr in
RE FY22), allowing more
autonomy to states to drive
agricultural reforms.
Rashtriya
Krishi Vikas
Yojna1
Food and
Nutrition
Security
Edible OilOil Palm
Edible OilOilseeds
Organic
Integrated
Value Chain Development
Development
of
for North
Horticulture
East Region
Seed and
Planting
Material
Agriculture
Extension
Digital
Agriculture
Agriculture
Census and
Statistics
Agriculture
Marketing
Total
100%
Krishionnati Yojana
1. RKVY was initiated in 2007 as an umbrella scheme for holistic development of Agri and allied sectors. It incentivizes States to increase
public investment in Agri/allied sectors and provides autonomy to prioritize schemes within the larger allocation.
Source: Union Budget 2022-2023
26% of the fund is allocated
for the development of
horticulture. 21% allocated
to oil palm and oilseeds to
boost domestic production
and processing.
53
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Budget Allocation for Centrally Sponsored Schemes (INR cr)
Chemicals and Fertilizers
54
Chemicals and Fertilizers | Continued focus on infrastructure development to
drive sector gains; customs duty changes announced
Customs duty rate change on certain chemicals
1
2
3
Increase in urea and nonurea BE subsidies
4 multi-modal logistics parks will be awarded through PPP;
PM Gati Shakti Master Plan for expressways to be formulated
Industry perception
Sector Impact
Proposed decrease in customs duty of
methanol, acetic acid to encourage
manufacturers to move towards
higher value-added downstream
products.
Increase in duty of sodium cyanide to
create a level playing field for
domestic companies with adequate
capacity.
Continued focus on infrastructure
projects to provide necessary assets
to chem sector, reducing distribution
costs and risk of supply chain
disruption
55
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Top sector announcements
Backup
Increase in urea and nutrient based subsidy compared with budgeted estimates
of last fiscal
Budget Allocation: Fertilizer subsidy
Budget Outlay (INR cr)
90,549.27
+8%
75,930.32
80,000
60,000
58,767.68
+102%
64,192.00
63,222.32
40,000
20,762.00
20,000
0
Urea Subsidy
Nutrient Based Subsidy
FY21 A
Source: Union Budget 2022-2023
42,000.00
37,372.47
FY22 BE
FY22 RE
FY23 BE
56
Copyright © 2020 by Boston Consulting Group. All rights reserved.
100,000
Infrastructure
57
Infrastructure | Positive budget view as govt undertakes holistic approach by
integrating multiple modes of transport & pushing for inclusive development
1
2
3
4
Gati Shakti highlighted as a priority initiative under the
budget; it will integrate development by six infra ministries
– marquee projects like 100 cargo terminals & 4 multi-modal
hubs launched
Inclusive urban development by shifting focus to Tier 2 and
Tier 3 cities, revisiting urban planning regime and launching
Aspirational Block Programme for backward blocks
Focus on increasing public capital expenditure to create a
virtuous cycle of investment for crowding in pvt investment;
financial assistance to states for increasing development exp
Launch of sovereign green bonds to fund sustainable
development and increase resilience
Sector Impact
Gati Shakti Master Plan integrates
state and center projects, thereby
brining efficiency in the sector
Coherent and holistic development
in urban sectors emphasized through
Housing for All, spotlight on Tier 2
and Tier 3 cities
Initiative to make undertake
sustainable infra development
through launch of green bonds
58
Copyright © 2020 by Boston Consulting Group. All rights reserved.
Top sector announcements
Preliminary
Industry perception
INR 4.28 lakhs cr allocation to infra (~50% increase in outlay) for infrastructure
sector, with ~90% of amount allocated for development of roads, highways and
railways
Futuristic and Inclusive
growth of infra sector
with focus on smart
development
Sustainable development of cities with focus on opportunity for all:
• INR 48,000 cr allocated for development of 80 lakh houses under PMAY
• Efforts to improve access to capital, with reduction in cost of intermediation
for real estate sector
• 4 Centers of Excellence to be established for promoting best practices in
planning
Sovereign Green Bonds to mobilizing resources for development of green
Infrastructure
INR 1 lakh cr. assistance to states in form of 50-year interest free loans, over
and above normal borrowing for development/execution of Gati Shakti projects
Source: Union Budget 2022-23
• Proposal to reform the existing Special Economic zones Act to enhance exports
• Set up of International Arbitration Centre in the GIFT City to boost foreign
investment and establishment of World-class foreign universities and
institutions to facilitate access to high-end human resources
59
Copyright © 2020 by Boston Consulting Group. All rights reserved.
PM Gati Shakti plan identified as one of the four pillars of growth that are of
immediate priority for the government, key projects include• Expansion of highways by 25,000 km in FY 23
• Launch of 400 new-generation Vande Bharat trains
• Development of 100 Cargo Terminals and award of 4 multi-modal hubs
Budget lays foundation for holistic development through integrating multiple
transport modes & pushing development in Tier 2 & 3 cities & backward blocks
• Budget outlines priority projects
under Gati Shakti, which aims to
create a seamless multi-modal
transport network
• Master plan to be aligned with NIP
and include state projects as well
• Focus on speedier implementation of
projects through innovative
financing and tech
• Unified Logistics Interface Platform
to be designed to address logistical
challenges
Urban Development
Urban Development and support to states
• Focus on Tier 2 and Tier 3 cities to
drive next phase of growth
• Financial support for AMRUT & Mass
transit projects to be leveraged by
states for formulation of action
plans for ToD & TPS.
Aspirational Block Programme
• Focus on development of lagging
blocks in backward districts
Vibrant Villages Programme
• Holistic Development of North
border villages with focus on
enhanced infrastructure, tourist
development etc.
Source: Union Budget 2022-23
Sector Financing
Virtuous Cycle of investment
• 35.4% increase in capital outlay YoY
• Public investment to take lead &
crowd-in investments through pvt
sector
• Sovereign green Bonds to be issued
for mobilizing resources for resilient
infrastructure
Financial assistance to states
• Grants-in-Aid to States by Centre is
estimated at INR 10.68 lakh cr.
• Provision of 50-year interest free
loans of INR1 lakh cr. to assist states
under the ‘Scheme for Financial
Assistance to States for Capital
Investment’
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Gati Shakti
Backup
Gati Shakti announced as a priority initiative under the budget; focus on
developing integrated multi-modal system
400 Vande
Bharat trains to
be developed &
manufactured in
India
Gati Shakti
master plan for
expressways
in FY23
Expansion of
25,000 km of NH
in FY23
8 ropeway
projects to be
awarded,
through PPP
4 multimodal
logistic parks to
be awarded,
through PPP
100 Cargo
terminals for
multimodal
logistics to be
developed in
next 3 years
Gati Shakti aims to integrate 6 infrastructure ministries including – roads, railways, airport, ports & urban transit
along with logistics infrastructure to provide seamless multimodal connectivity & logistics efficiency
61
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Priority projects under Gati Shakti
~50% increase in budgetary outlay for infrastructure sector; road transport and
railways take ~80% of infra outlay
+69%
Budget Outlay (INR Cr)
200,000
199,108
118,101
150,000
100,000
+28%
140,367
110,055 120,056
112,159
+40%
50,000
+231%
73,850 76,549
46,701
0
68,722
99,159
54,581
4,089 3,225
MoHUA
MoRTH
2020-21
MoR
2021-22 BE
2021-22 RE
MoCA
10,667
0.4%
1,388 1,702 1,585 1,710
MoPSW
2022-23 BE
Note: Budgetary outlay includes both capital and revenue expenditures for the year
MoUHA: Ministry of Housing and Urban Affairs; MoRTH: Ministry of Road Transport and Highways; MoR: Ministry of Railways; MoCA: Ministry of Civil Aviation; MoPSW: Ministry of Ports,
Shipping and Waterways
Source: Union Budget 2022-23
62
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131,149
NH network to increase by 25,000 km, while railways to develop 100 cargo
terminals under Gati Shakti
Capital
Budget
Focus
Areas
Impact
INR 1.87 lakh cr (~74% increase from FY
22 BE)
• NH network to be increased by
25,000 km in 2022-23
• Road transport master plan under
PM Gati Shakti to be finalized in
2022-23.
• INR 20,000 cr. to be mobilized
through innovative ways
of financing
• Plans for investments in
remote roads
Focus on completion of targets will
prove beneficial for road construction
companies
Railways
INR 1.37 lakh cr (~28% increase from FY 22 BE)
• ‘One Station-One Product’ concept to help
local businesses & supply chains
• 400 Vande Bharat trains to be developed &
manufactured in India in next 3 years.
• 100 PM GatiShakti Cargo Terminals for
multimodal logistics facilities
• 2000 km of rail network to be brought under
KAWACH technology
• Integration of Postal and Railways Network
facilitating parcel movement
Creation of new product and cargo terminals
will help MSMEs and logistics companies
Civil Aviation
INR 76.46 cr (~89% increase from
FY 22 BE)
• Total allocation of INR 600 cr earmarked
for the regional connectivity scheme
UDAN
• Start-ups will be promoted to facilitate
Drone Shakti, with 'drone as a service'
• Drones recognized as a sunrise industry
No major policy announcement on airports
Goal of additional 25,000 km of NH by
2022-23 sets a target of 68 km per day,
70% higher than FY 22. Highly ambitious
Note: Capital Budget allocation includes allocation earmarked for development/investment works
Source: Union Budget 2022-23
63
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Roads and Highways
Orderly urban development with help of experts for inclusive and sustainable
development of cities
Capital
Budget
Budget
Focus
Impact
INR 574.31 cr (~213% increase from FY 22 BE)
• Unified Logistics Interface Platform (ULIP) to promote
multimodal movement of goods
• 4 Multimodal Logistics Parks under PPP mode to be
awarded in 2022-23.
• New legislation to replace Special Economic Zones Act to
enhance competitiveness of exports
Increased capital outlay for Inland water transport
Increased employment opportunities for residents of NorthEastern Areas
Urban Development
INR 0.3 lakh cr (~6% increase from FY 22 BE)
• Focus on increasing public transport in urban areas through special
mobility zones with zero fossil-fuel policy, and EV vehicles
• Green Bonds to be issued for mobilizing resources for
green infrastructure
• INR 48,000 cr. allocated for beneficiaries of PM Awas Yojana
Focus on development of Tier 2 and 3 cities
Centers of excellence for urban planning and design will help in
better implementation and governance of state and central projects
Modernization of building byelaws, Town Planning Schemes (TPS),
and Transit Oriented Development will help to achieve India's
Glasgow commitments
IT management of records- Unique Land Parcel Identification
Number will facilitate efficient use of land resources
Note: Capital Budget allocation includes allocation earmarked for development/investment works
Source: Union Budget 2022-23
64
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Ports, Shipping and Inland Waterways
Building Materials
65
Building Materials | Sector likely to reap indirect benefits from policies
targeted towards affordable housing, infrastructural and rural development
New road projects
Smart Cities & Railways
• 80 Lakh houses to be constructed
by FY23 with a budgetary outlay
of INR 48000 cr
• Capex allocation to MoRTH
rose by 55% yoy to INR 1.88
lakh cr
• Budget spend of PMAY-Urban rose
sharply by 1.3x yoy while PMAYRural declined by 6% yoy
• Under PM Gati Shakti Scheme,
INR 20,000 cr has been
allocated for expanding the
National Highways by 25,000
km in FY23
• Total capex for the 100 Smart
cities is pegged at INR 6,444 cr.
Notably, budgetary support
stood flat as compared to FY22
revised estimates
Impact
• This allocation will help boost
demand for toilets, modern
sewage systems and other
building material products
• Concrete-based highways will
lead to rise in Cement demand
• Total allocation to Ministry of
Railways grew 17% yoy to INR
1.37 lakh cr. Cement demand is
poised to grow on the backdrop
of focus on execution of
pending projects
Jal Jeevan Mission & PMGSY
• Jal Jeevan Mission (JJM) aims
to install tap connections in
3.8 cr households in FY23E
• It will be implemented with an
outlay of INR 60,000 cr (rise of
33% yoy)
• Allocation to build rural roads
under Pradhan Mantri Gram
Sadak Yojna (PMGSY) grew by
36% yoy to INR 19,000 cr
Rural & urban development
Demand growth (Non-Trade)
Infrastructure development
Demand growth (Non-Trade)
Cement, tiles, sanitary ware bath
fittings, and other building
material products.
Cement
Cement, tiles, sanitary ware & other
building material products
Cement, sanitaryware
66
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Affordable Housing (PMAY)
Metals and Mining
67
Metals & Mining | Status quo in metals; minimal impact in ferrous
1
2
Import restrictions (anti-dumping & countervailing duties)
have been revoked on stainless steel and coated steel
flat products, parts of alloy steel, & high-speed steel
Extension of duty exemption for steel scrap import for
another year
Source: Union Budget 2022-23, JPC, BCG Analysis
Sector Impact
• Despite removal of duties on
stainless & alloy steel appearing
as a threat to domestic industry,
we believe this would have no
significant impact as historically
at least 2/3rd of imports are
from FTA nations where duties
are zero
• Nevertheless, the extension of
free scrap imports is positive for
domestic secondary players
68
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Top sector announcements
Industry
perception
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