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INSIGHTS

Indian security companies weigh in on the country’s latest budget plans

Indian security companies weigh in on the country’s latest budget plans
The budget appears to strike a balance between large capital expenditure and fiscal discipline.
India’s fast-growing economy continues to attract the attention of global companies keen to invest in the market. So much so that any political and economic development here has an international significance. The latest among such events is the Indian government's 2023 budget announcement.
 
The government presented a slew of measures aimed at the growth of several sectors. Significantly, it named seven “pillars” or priorities: inclusive development, reaching the last mile, infrastructure, and investment, unleashing the potential, green growth, youth power, and financial sector.
 
Experts from different sectors have shown mixed reactions to this. But the physical security industry remains largely positive on the announcements, optimistic about better conditions in an otherwise tumultuous global economy.  

Efforts to drive growth

Ashish Dhakan, MD & CEO of Prama Hikvision India, pointed out that the Union Budget 2023-24 aims to put India on the path to becoming a $5 trillion economy. The emphasis on the seven priorities shows the government’s vision and missionary zeal for a developed India.
 
“We welcome the growth-oriented budget positively as it is aimed at furthering the cause of the Indian manufacturing industry,” Dhakan said. “The Union Budget has the blueprint of sustainable economic growth in Amrit Kaal (Amrit Kaal refers to the next 25 years - up to 2047 - leading to the centenary of India's independence), backed by consistent and well-planned strategy.”
 
To Dhakan, it also shows a strong commitment to the electronic manufacturing sector and infrastructure development. The budget shows clear intent to offer calibrated customs duty rates to provide a graded rate scheme to facilitate the domestic electronic manufacturing sector.
 
Sudhindra Holla, Director for India & SAARC at Axis Communications, voiced similar thoughts adding that the budget focuses on inclusive economic growth in order to strengthen India's status as a global digital powerhouse.
 
“We are optimistic about the government's seven pillars, with a renewed emphasis on green growth,” Holla said. “We are delighted with the Centre's (government) focus on tourism and investment in transportation infrastructure projects, as this indicates an increase in demand for safety and surveillance solutions. We are aligned to further action India's vision to transform our cities into ‘sustainable cities of tomorrow.”
 
Holla added that this would serve as a stepping-stone in revitalizing smart city planning and urban development. The 2023 budget has a future-ready outlook and compliments the nation’s unmatched growth for the digital economy, innovation, and inclusive development.

Focus on talent development

One of the critical areas that the budget focused on was skill development. The country’s finance minister explained that the government had formulated a National Education Policy, which will be focusing on skilling and adopting economic policies that facilitate job creation at scale and have supported business opportunities.
 
Experts like Dhakan feel that the government's commitment to empowering the youth by introducing mandatory courses such as AI, coding, drones, IoT, 3D printing, and other soft skills under Pradhan Mantri Kaushal Vikas Yojana 4.0 and establishing 30 Skill India international centers, will connect skilled youth with employers and leaders in the industry and encourage entrepreneurship.
 
“As an integral part of India’s fast-developing electronic security manufacturing ecosystem, we are sure that this Union Budget will help to realize the vision of ‘Surakshit Bharat’ (Secure India) through the ‘Atmanirbhar Bharat’ (Self-Reliant India) roadmap,” Dhakan said.

Business-friendly measures

From the security industry perspective, this could be seen as an industry-friendly budget as it acknowledges MSMEs as growth engines of the economy. It proposes enhanced limits for micro-enterprises and certain professionals to avail the benefit of presumptive taxation.
 
“To support MSMEs in timely receipt of payments, the budget allows a deduction for expenditure incurred on payments made to them only when payment is actually made,” Dhakan explained.   “The Union Budget offers solace to the MSME sector. The revamped credit guarantee scheme for MSMEs is to take effect from 1st April 2023 through the infusion of Rs 9,000 crore ($1.09 bn) in the corpus. This scheme would enable additional collateral-free guaranteed credit of Rs 2 lakh crore ($24 bn) and also reduce the cost of the credit by about 1 percent.”

Critical steps to ensure stability

In a nutshell, the budget appears to strike a balance between large capital expenditure and fiscal discipline. It could spur the growth of the Indian economy, improve the infrastructure, and empower the common people.
 
These measures are important for a number of reasons. Although the India growth story is picking momentum, global headwinds pose significant challenges. In almost all sectors, layoffs are becoming a new normal, creating panic in the markets. Solid steps from the government can ease the concerns, improving sentiments.  

Conclusion

India’s security industry is expected to grow in line with its economy. As the country’s infrastructure develops, more commercial and residential structures get set up, and facilities like transportation get a boost, investments in security remain inevitable. 

While there is no question about growth, integrators and solution providers would be interested to know which verticals would be best to invest in. Manufacturing is certainly a growth area as the government plans to boost local production. The public sector is another, as more highways and infrastructure get built. Commercial sectors would follow, even though economic concerns may cause lower consumer confidence in the immediate future. 

For Indian security companies and integrators, 2023 would be an interesting year to look forward to. A lot of development is planned, promises made, and ideas projected. Now what remains is the execution. 
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