Privatization Of Banks, Higher Ceiling On FII In Insurance Sector, Zero-Coupon Bonds For Infrastructure Will All Stimulate Growth

Union Budget 2021 reactions from Mr. Vikram Kirloskar, Vice Chairman, Toyota Kirloskar Motor

“Faced with the challenge of delivering rapid, inclusive, economic growth with heightened focus on health and welfare in an environment of economic contraction and sharp increase in fiscal deficit due to COVID, the Hon’ble Finance Minister has struck an remarkable balance between growth and fiscal prudence by setting pragmatic revised targets and glide path for fiscal consolidation. The emphasis on capital expenditure and infrastructure creation is sought to be largely realized through borrowing and asset monetization without resorting to any significant increase in taxation. The privatization of banks, the higher ceiling on foreign direct investment in the insurance sector, zero-coupon bonds for infrastructure, tackling the bank non-performing assets through a combination of an asset reconstruction company and an asset management company are all ideas that will stimulate growth. The budget makes a bold statement for a growth rate beyond Pre-COVID levels and renews government’s commitment to minimum government and maximum governance.

From an auto industry perspective, the long-awaited voluntary Scrapping Policy can help take older vehicles off the roads thus contributing to lower fuel consumption, pollution as also generating additional demand for cleaner new vehicles. The auto sector welcomes this announcement and is hopeful that for realizing full benefits there will be an early and full implementation of this policy. Further, at Toyota Kirloskar Motor, we have continuously worked towards creating a self-reliant and competitive local manufacturing eco-system and are eagerly looking forward to the details of the Production Linked Incentive scheme that can potentially make India a part of the global supply chain for both traditional and advanced automotive technologies.”