HVACR Industry welcomes provisions in growth oriented Budget 2022

Instilling confidence, Budget aims to transform Indian economy, measures to reduce overall carbon footprint and indigenisation of components.

Finance Minister Nirmala Sitharaman made varied and major announcements. The union budget has something for every sector. The government is focused on citizen-centric reforms and Budget 2022 aims to reform the economy over the next 25 years. With capital expenditure estimated at ₹10.68 lakh crore for 2022-23, government carved roadmap to boost India’s economy.  Sectors that stand to benefit are banking, infrastructure and manufacturing. PLI in 14 sectors will create 60 lakh new jobs and additional production of ₹30 lakh crore in next 5 years. It also includes, the Sovereign Green Bonds; launch of a gateway for the National Digital Health Ecosystem and many more.  Experts from varied sectors expressed their opinions on the Union Budget 2022 few of them are mentioned herein.

Ravichandran Purushothaman, President of Danfoss India commenting on the likely transformation of the Indian economy due to the Budget, remarks, “We welcome the progressive and growth-oriented budget presented by the Finance Minister Nirmala Sitharaman for 2022-23. As part of India’s new blueprint of infra growth for the ‘Amrit Kaal’, the increased capital expenditure, 35.40 percent above last year, will create more infrastructure, which will have a huge multiplier effect on the economy. With economic growth pegged at 9.2 percent, ahead of other large economies, and a sharp focus on sustainability and circular economy, India is well poised to withstand the challenges and reach closer to the $5 trillion GDP ambition.

With capital expenditure estimated at INR 10.68 lakh crore for 2022-23, the government has laid out the roadmap to boost India’s holistic growth. The Budget has also given the much-needed impetus to India’s agriculture and education sector with measures such as 2.37 lakh crore direct MSP payment to farmers, DESH stack, One Class One Channel. By promoting chemical – free natural farming, industries can now lead the way in boosting sustainable productivity and increased income of farmers. While the highlight of the budget was on healthcare and infrastructure sector, some prudent initiatives for MSMEs and India Inc for start-ups have also been announced. The announcements related to green bonds and energy savings for commercial buildings highlights India’s commitment towards reduction of carbon emissions.

To facilitate energy management, Government of India has promoted the adoption of the Energy Service Company business model for large commercial buildings. By enabling capacity building and energy audits, performance contracts, common measurement and verification protocols, this service helps in imbibing energy savings as a core value in industries across India. By providing major financial allocations to energy efficiency and data centres the path towards clean energy storage is clearer than ever. We hope that Budget 2022 acts as a guiding force to lead our government’s ‘India@100’ initiatives.”

Gurmeet Singh, Chairman and Managing Director, Johnson Controls-Hitachi Air Conditioning India Ltd., expressing his views on Consumer Durable Sector, remarked, “With focus on public investment and capital spending this Budget will certainly provide impetus to the economic growth amid the pandemic. However, we expected the budget to be a landmark in giving much needed, relief and putting more money into the hands of the common man to speed up the recovery of consumer electronics and other promising sectors. We welcome government move to aim for the creation of over 60 lakh new jobs by promoting Production Linked Incentive (PLI) Scheme as India is certainly moving towards ‘Atmanirbharta’ with the successful implementation of this scheme. The promising consumer electronics industry can potentially act as a growth aggregator for domestic manufacturing and employment generation helping our economy recover faster.  If tapped in the right manner with custom product innovations and easy finances, India has all the potential to beat its global peers in consumer durables sales soon. Although government is putting lot of efforts to promote indigenisation of components, GST rationalisation of ACs will help the industry in tapping a largely untapped consumer base. The industry was optimistic for GST reduction in the budget to take India’s Air-conditioner market to new heights. We expect the government to consider rationalisation of tax rates on ACs and other essential consumer durable electronic items in the near future.”

Also expressing his views on Skill India announced during Union Budget 2022-23, he stated, for the economic recovery from the COVID-19 crisis to be durable and resilient, it is critical for India to take skill-building of youth to the next level. A robust skill development ecosystem of a country has the potential to reduce unemployment and underemployment, increase productivity, and improve standards of living. Technical Skill development of rural India’s young population can contribute to structural transformation and economic growth by enhancing employability and labour productivity. We welcome government move to launch of DESH STACK, an e-portal for a digital ecosystem for skilling and livelihood. This will certainly boost India’s prestigious Skill India Mission and help in the creation of future ready and industry oriented skilled work force. “Realignment” of the National Skill Qualification Framework with dynamic industry needs will give the much-needed impetus to employment growth in these tough times and help industries to recover faster. The launch of various new skill development courses at selected Industrial Training Institutes in India will help them in becoming the expertise demand center for local industries and boost domestic manufacturing along with the growth of new sunrise industries.

Ashish Bhandari, MD & CEO, Thermax remarks, “The Union Budget is a promising one, looking to build long term growth as the economy recovers from the impact of the COVID-19 pandemic. Specifically for the energy sector, there are many positives from this Budget. The Sovereign Green Bonds is a remarkable step for funding the projects with a focus on using cleaner alternatives in every sector. This will help reduce the overall carbon footprint of the Indian economy and help achieve the renewable energy target of 175 gigawatt by the year 2022. The additional allocation of Rs 19,500 crore to boost the manufacturing of solar modules under the government’s flagship PLI scheme will also help achieve the goal of 280 gigawatt of installed solar capacity by 2030.”