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
The Union Budget 2021 came on the back of sector-specific provisions like collateral-free loans for Micro Small and Medium Enterprises (MSMEs), Funds of funds, subordinated debt, disallowing global tenders of up to Rs.200 crore and change in the definition of MSMEs. With a holistic approach to health as an obvious priority, the Finance Minister allocated Rs.2,23,846 crore as against 94,452 the previous year. Posing limitations to allocations for sectors alike she cited the unprecedented contraction in the global economy. She drew attention to only three budgets having followed a contraction in the economy assuring that the current budget would help sustain the desired economic recovery. Under the Production Linked Incentive (PLI) scheme, Rs.1.97 Lakh crore was allocated for creating “global manufacturing champions” across 13 sectors including industries and services. A five-year outlay beginning FY2021-22, the latter (services) commands a majority stake in the sector-wise share in Gross Value Added (GVA) terms.
Rs.2,217 crores for 42 urban centres to tackle air pollution, voluntary vehicle scrappage policy, innovative PPP models to augment public bus transport were among other announcements expected to boost the prospects of the sector. Besides the government also committed to extending social security benefits to gig workers. On the human capital front, it resorted to realigning the national apprenticeship training scheme for graduate and diploma holders of engineering. It will also leverage the partnership with the UAE and Japan on the fronts of skill development and recognition. For R&D, National Research Foundation would be formed with an outlay of Rs.50,000 crore over a five year period. Innovation and R&D found a mention among the cited six pillars of the economy. The eligibility for claiming tax holidays for startups was proposed to be extended by an additional year.
Continue reading your story on the app
Continue reading your story in the magazine
The ZF ProAI, a next-generation automotive-grade supercomputer is aimed at meeting the manufacturer needs for software-defined vehicles and their new E/E architectures. Team ACI looks at the new and exciting offering from the ZF Group.
Mission Development And Business Continuity
At the maiden virtual edition and the 5th edition of ACMA Automechanika, the stakeholders of the automotive industry shifted gears. Ashish Bhatia highlights this resolute focus on the development and continuity of business.
Modular Electric Vehicles
REE Automotive has signed a strategic collaboration agreement with Magna International. Team ACI looks at the strategy aimed at introducing modular electric vehicles in the market.
Drivetrains For Real Demand
Automotive manufacturers are tapping into the mix of next-generation technological developments with localisation for vehicular platform consolidation. Ashish Bhatia looks at this strategy to manufacture drivetrains for the real demand.
Earth Energy Game Plan
Mumbai based startup Earth Energy is riding the emobility wave in India. Team ACI highlights the company’s push for localisation as the foundation of its game plan
Opportunity In Adversity
In an upfront interaction, G.S. Ramesh, Founder and Chairman of the Layam Group shares with Ashish Bhatia the need to scout for your opportunity in adversity, referring to the employment landscape in the automotive manufacturing and services sector.
Saietta Group Partners Padmini VNA
Saietta Group inked a significant partnership with Padmini VNA Mechatronics. Team ACI looks at the contours of the agreement aimed at India’s electric two-wheeler segment.
RBI Measures To Deal With The Second Wave
RBI measures to deal with the second wave Reserve Bank Of India, Governor, Shaktikanta Das announced measures to deal with the second wave of Covid-19 earlier in May. In his address, he said, “The global economy is showing signs of recovery; activity remains uneven across countries and sectors, clouded by downside risks.”
Auto Technology Partnership Summit And Expo 2021
At the ACMA Auto Technology Partnership Summit and Expo 2021, the focus was on harnessing the Indian automotive opportunity. Team ACI gets you the key insights from the three-day virtual congress.
Downstream Aluminium: Meeting The EV Demand
R.K Jain, Sr. Vice President – Commercial at Jindal Aluminium Limited in this article writes about meeting the EV demand through innovative production.