Union Budget 2021: Auto Components Special

The Union Budget 2021 attempts to offer the necessary “succour” to the automotive components industry. Ashish Bhatia takes you through the key budgeted allocations and brings out the expert opinions.

- Ashish Bhatia

The Union Budget 2021 was deemed as the “once in a century budget” even before it was made public. After a pandemic marred 2020, the ask was for bold reforms to address and alleviate pain points, both from the supplyside and demand-side perspective. Finance Minister Nirmala Sitharaman was dealing with expectations that had skyrocketed. On February 01, 2020, when she uttered the first word from her speech on the ‘Made In India’ tablet, the departure from the traditional practice of reading out from the “Bahi-Khata” or cloth ledger was interpreted by pandits as a metaphor for change. The government, in an attempt to tone down the soaring expectations, had on the eve of the budget, cited the sector specific ‘tranches’ as having already addressed most pain-points in the form of ‘mini-budgets’. This Union Budget was deemed as a consolidated account of the mini-budgets. The government , it was evident, walked the rope of maintaining a tight fiscal plan with the RE 202021 at 9.5 per cent compared to the budgeted level of 3.5 per cent of GDP (attributed to increased expenditure on various schemes announced by the government in light of the pandemic). The industry, however hoped for additional support to reverse the negative impacts of the pandemic induced de growth as it had repeatedly sounded off the expectations on both the supply-side and the demand-side concerns ahead of the D-day.

Budget outlay for the sector