Budget’21- Atmanirbhar Bharat & Vehicle Scrappage Policy

Explaining the Budget 2021 | This time let’s look into what is this Atmanirbharta that government is so much bragging about and by the way, you have to get your cars checked every 20 years from now. So head on to read below…

Atmanirbhar Bharat

The Made-in-India tablet replacing the traditional bahi khata spoke enough for an Atmanirbhar Bharat this Budget session. While we have been aiming consistently at “purna atmanirbharta of Bharat” since last year, the Budget for FY2022 only emphassises its priority and importance.

Have a quick look at the layout for the same:

  • The centre laid ₹27.1 lakh crore for the three Atmanirbhar Bharat packages, accouning for more than 13% of India’s GDP.
  • The two Atmanirbhar plans were launched in face of pandemic last year in October and November adding momentum to the already launched Atmanirbhar plan in May 2020
  • The Atmanirbhar health programme itself outlays with ₹64,180 crore out of which ₹35,000 crore has been dedicated to Covid19 vaccines solely

These packages aim to accelerate the ongoing structural reformation, redefine MSMEs, commercialise the mining sector, bring in agricultural and labour reforms and privatise some PSUs. The plan alos extends to pace up production incentivisation schemes, one nation one ration, financial inclusion among others.

The nation has been vigilant during the times of pandemic and not only acquired two vaccines for itself but helped other hundred nations in these time of crisis. The budget as FM quoted has been inspired by the resilience Indians have shown during the past year and a fiscal deficit of ₹15 lakh crore is in line with the hopes of its citizens. As PM Modi mentioned in his speech post the budget presentation,

Today’s Budget shows India’s confidence and will instil self-confidence in the world. The Budget has the vision of self-reliance and features every section of the society.

Moving along the vision for an Atmanirbhar Bharat was another unanitcipated policy this year. To make market for newly produced vehicles simultaneoulsy also managing keep a check on pollution caused from vehicular emissions, what is the new policy regarding your personal cars?

Vehicle Scrappage policy: The old must go for the new to come

As seen by the experts, this is a budget of unexpected reforms and expected monetary allocation. Along with various reforms in the finance sector, the automobile sector also saw a reform of voluntary scrapping of vehicles.

Under this policy, the test drive of all private and commercial vehicles will be done after 20 and 15 years respectively to determine if they can still safely run on roads. This will achieve some obvious safety and environment goals apart from giving a boost to the demand in the automobile industry.

Mrs. Sitharaman in her budget speech emphasized that it is time for us to phase out old and unfit vehicles for which she gave various reasons.

Liquidity crisis of the non-banking financial sector saw a downturn effect on the auto sector since those are the major lenders to the industry, reducing demand and hike in oil prices saw a decline in the annual sales of the sector.

This reform is a manufacturing boost to the falling automobile sector which was further burdened in the time of national lockdown. In addition to it, this policy is an effort to reduce emissions and increase fuel efficiency.

It is noteworthy that though this policy is now voluntary, it will soon be mandatory through changes and every 15 or 20 years vehicles will be either qualified to run on roads or will straight be headed to the scrap heap.

This policy overall is to boost manufacturing and ensure that vehicles on road are only those which are suitable for the environment.

Written by- Liza Anshul & Priya Chaturvedi

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The Finance & Economics Club (FEC) functions as a platform for enthusiastic students to come together and learn the intriguing and fun world of finance.

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