Deepening Australia-India economic engagement through India's Union Budget 2023 goals

For India, this week was big and busy! As stock markets cheered the budget, analysts were busy crunching numbers and examining the finer details of the mammoth documents – the India Economic Survey 2022-23 and The Union Budget 2023-24

• India’s Economic Survey (ES) is a detailed report on the performance of the economy during the previous year, future challenges, and the way forward. It throws light on the trends in different sectors and tracks the state of the country’s economic performance in the past year. Before presenting the?Union Budget?in the Parliament, the Indian government releases the annual?Economic Survey. The Chief Economic Advisor authors the Economic Survey, which is then approved by the Union Finance Minister. It primarily addresses three key points - Reviewing the country’s economic development over the past 12 months, summarising how the different development projects for the country are performing and highlighting the government’s policy initiatives. One should read the Economic Survey if one is invested in understanding India’s larger economic thought process, the sectors that defines/will define future growth prospects and the country’s strategic economic focus.
• The Government of India in its Union Budget for 2023 has laid a blueprint for its aspirations for India in the next 25 years. Hence, the budget is no longer limited to being an annual document but sets a futuristic roadmap with long term goals and provides a policy focus, a framework for India’s growth vision, relying on two core concerns – Growth and Welfare.

?As India sets itself committed ambitions, we examine at a high-level the 2023 Union Budget goals and the sectoral opportunities for Australia and India for bilateral alignment, creating awareness of the potential for collaboration and partnerships.

SECTOR-SPECIFIC ADVANTAGES

AGRICULTURE

• Agriculture Accelerator Fund for young rural entrepreneurs to build Agri start-ups
• Focus on bringing new technology to transform agricultural practices, increase productivity and profitability
• Focus on improved quality planting material for high-value horticultural crops
• Agriculture credit target increased, with a focus on animal husbandry, dairy, and fisheries
• Focus on sustainability in the fishing industry
• Focus on modernisation of agriculture, Food Processing, post-harvesting techniques

Australia’s Advantage –

• World-class expertise in Agri services, land and water resource management
• Produces?more?food?and?fibre?than?it?can?consume,?exporting?around?72%?of?the total value of agricultural, fisheries and forestry production
• Pioneer in the development of drought-resistant crops, robust irrigation systems and technology that can predict yields and recommend optimal pastures and stocking density
• Australian?farmers?are?early?adopters?of?technology,?such?as?precision?farming?techniques,?GPS and?yield?predictors, this?has?resulted?in?productivity?increases?of?up?to?20%?cent?over?the?last two?decades
• A$57 billion in agrifood exports in 2021–22, Australia produces enough food to feed 80 million people every year
• Global food companies have set up international labs in Australia, eg. American food and agri company Elo Life Systems to use world-leading genome editing technology
• Australia-India partnership in sharing agricultural science expertise can be key to improving food security

INFRASTRUCTURE

• US$ 9.4 billion to be invested in 100 critical transport infrastructure projects for first and last-mile connectivity of ports, coal, steel, fertilizer and food grain sectors
• Urban Infrastructure Development Fund (‘UIDF’) to build urban infrastructure in Tier 2 and Tier 3 cities
• Proposal to set up 50 additional airports, heliports, water aerodromes and advanced landing grounds would have a ripple effect on infrastructure, transportation, hospitality, and tourism industry
• Railways capital outlay increased

Australia’s Advantage –

• Australia has one of the world's most developed logistics networks, world class transport infrastructure with high-end expertise in multimodal freight logistics, port logistics, design, and engineering
• Australia’s Home-grown innovations in transport and construction include:

1. The SCATS intelligent transport system – deployed in over 100 cities worldwide
2. STREAMS – the smart motorways platform piloted in projects in the US
3. Driverless trains that operate 24/7
4. Train control centres located 1,800km from train networks

• The high degree of safety and efficiency within transport system have informed collaborative partnerships within universities, businesses and transport authorities
• Australia is also the go-to destination for rail industry training, deploying the latest virtual reality and 5D training technologies
• Australia has been the early adopters of innovative building materials and technology that accelerate construction while maximising quality and safety
• Established experience in leveraging public private partnership models
• Australia has research centres around the country dedicated to innovations in transport, water and the built environment, with a strong focus on sustainability
• Australian companies Linfox, Macquarie, CIMIC already have experience working in India on infrastructure and logistics projects

GREEN GROWTH

• Priority capital investments towards energy transition, the objective is to achieve net zero emissions by 2070
• Battery Energy Storage Systems with a capacity of 4,000 MWH to be set up with Viability Gap Funding
• 500 ‘waste to wealth’ plants under the GOBARdhan (‘Galvanizing Organic Bio-Agro Resources Dhan’) scheme to be established to promote zero waste and sustainable industrial cycle
• Focused outlay on National Green Hydrogen Mission, target of an annual production of 5 MMT of Green Hydrogen by 2030
• Lower customs duty on import of capital goods for Lithium-ion battery
• Higher allocation on scheme for Faster Adoption and Manufacturing of EVs (FAME)
• Scrapping old, polluted government vehicles

Australia’s Advantage –

• Australia reduced its emissions by 20% between 2005 and 2021
• Ranked 6th in the world on the Renewable Energy Country Attractiveness Index
• Australia is the world leader in installed solar; the solar and wind combined share of generated output nearly tripled in the last five years
• Australia has significant expertise in urban infrastructure design and development, with its cities regularly feature at the top of world liveability
• Established capabilities in green building standards, innovative water resource management, industrial and urban water recycling and treatment systems, waste management, intelligent transport systems and transport orientated design, urban road design and road safety systems, infrastructure financing expertise, building, operating and maintaining social infrastructure
• Opportunity to focus on technology transfer and circular economy, and partnership opportunities in sunrise sectors
• Australia and India have already partnered to accelerate the production and deployment of renewable energy technologies, diversify global clean energy supply chains, and help reduce global emissions with a particular focus on scaling up the manufacture and deployment of - solar photovoltaic (PV) technologies, clean hydrogen technologies, including electrolysers
• Australia’s Low Emissions Technology Statement has set the goal for hydrogen production at under $2 per kilogram. The Government’s National Hydrogen Strategy sets a vision for commercial renewable hydrogen exports by 2030

?EDUCATION

• National Digital libraries to be set up encouraging reading habits
• Centres of excellence for Artificial Intelligence set-up in top educational institutions with industry collaborations in R&D
• 157 new nursing colleges to be established
• 30 Skill India International Centres to be set up across different States to skill the youth for international opportunities through new age courses like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills
• Promotion of a ‘Centre of Excellence’ for pharmaceuticals research and innovation in priority sectors
• Thrust on multidisciplinary courses in medical devices for skilling manpower in futuristics medical technologies, high end manufacturing and research in India
• Setting up 100 labs in premier engineering institutions for developing applications using 5G services.

Australia’s Advantage –

• Australia has more than 9,000 agreements and partnerships with universities globally, and the Australian Government funds targeted programs to support practical connections between academic researchers and industry
• Almost 90% of Australia’s research is rated at or above world standard
• With only 0.3% of the world’s population, Australia contributes 4% of global research publications
• Australia ranks eighth globally for life sciences research
• Australia’s universities are at the global forefront of research in 20 critical fields, including space science, physics, computer science and clinical medicine
• Australian research has yielded remarkable discoveries including Penicillin-based antibiotics, ultrasounds and in-vitro fertilisation
• The signing of the Australia India Future Skills Initiative will establish a digital platform, delivered in partnership with industry, to connect Australian vocational education, training and skills providers, Indian businesses, government, students and employers
• With over A$18 billion a year business expenditure on research and development in Australia, industry–university collaboration plays a critical role in the Australian economy and innovation
• As a world-class education provider, Australia is well placed to partner with India across secondary, university and vocational sectors
• For e.g., skilling in health care could be focused on Kerala and Karnataka, given their history of exporting health care personnel, hospitality providers could consider Kolkata in West Bengal because of its status as a hospitality training hub for students from the North-East, who comprise a substantial proportion of the Indian hospitality industry nationwide

?Macroeconomic Takeaways – (Economic Survey 2022-23 and Budget 2023-24)

• India's GDP growth is expected to remain robust in FY23 at 7%
• The capital investment outlay has been increased by 33%
• Strong focus on fiscal consolidation
• India to remain the fastest-growing major economy in the world
• Electronics exports have risen nearly threefold
• Labour markets have recovered beyond pre-Covid levels, in both urban and rural areas
• Private investment in agriculture increased to 9.3% in 2020-21
• The services sector is expected to grow at 9.1% in FY23?

Finally, let’s look at how India is changing every day. Last year, the Economic Survey had used a mix of satellite imagery, geospatial data and cartographic techniques to showcase the country's development and urbanisation over the years.

As Australia embarks on scripting a new economic engagement narrative with India post interim free trade agreement, the AI-ECTA, clearly, there are immense opportunities. If you have any queries or need more information, please do not hesitate to DM me or email us at - [email protected]