Manufacturing momentum: Will India stay the course post Budget 2024?
₹7.09 trillion in FY24 from ₹2.58 trillion in FY20 and ₹1.41 trillion in FY15. Kapoor expects this amount to grow significantly as PLI schemes for auto, semiconductors, medical devices, drones, white goods, and computer hardware gain traction.
Aniruddha Naha, chief investment officer – Alternatives at PGIM India Asset Management, noted, “Infra will require the government to spend whereas manufacturing would sustain from private participation, as the government has already incentivized this segment through PLI schemes." Having said that, the focus on manufacturing does not need to be limited to budget allocations, according to Arora of Emkay Global. Policy support, she said, will be needed to boost sophistication and innovation in product manufacturing to attract manufacturing investment and reduce product dependence on China.
Karthikraj Lakshmanan, senior vice president and fund manager of equity at UTI AMC, noted that the government’s focus on reducing the fiscal deficit might result in more measured capex growth. Consequently, the private sector is expected to play a more significant role.
He emphasized that strong macroeconomic fundamentals coupled with robust bank balance sheets and de-levered corporate balance sheets provide the ideal environment for accelerating private capital expenditure. “We believe most of the big structural reforms are now behind us and the time gap between the election results and budget is relatively short to present a fully fleshed out scheme," cautioned Akhil Chaturvedi, Chief Business Officer & Executive Director at Motilal Oswal AMC.
Consequently, his expectations for major new initiatives are low. Capital goods, including defence and railways, housing, tourism, and aviation are likely
. Read more on livemint.com
