Union Budget 2021-22 Expectations for Atmanirbhar Bharat: Prime Minister Narendra Modi gave a clarion call in 2020 for making an Atmanirbhar Bharat; however, an immediate curb on imports and large scale budget allocation to boost manufacturing looks difficult in the upcoming Budget 2021. “The Ministry of Finance has limited fiscal instruments at hand to affect the direction of international trade, particularly import substitution,” D K Srivastava, Chief Policy Advisor, EY India, told Financial Express Online. The government also has limited resources to provide additional subsidies to encourage domestic production, D K Srivastava added. Therefore, there is only a limited room for the fiscal authorities to encourage Atmanirbhar Bharat, he further said.

However, the government may find another way to support the domestic industry by making imports expensive, which would eventually also lead to an increase in the government’s revenue. “We may see some higher import duties in budget 2021 in order to provide additional protection to select domestic industries including defence production,” D K Srivastava underlined.

Multi-front march: The steps the government may take

Apart from steps to boost domestic production and making imports expensive, the government is also expected to look at other aspects to spur growth in domestic production. Laying emphasis on increasing the ease of doing business, and cutting down the cost of doing business would also take center stage in the upcoming budget. 

“The focus of the budget on raising infrastructure spending, strengthening of the MSMEs sector, reducing the tax burden, promoting ease of doing business, reducing the cost of doing business, enhancing export competitiveness, twin merits of education and skill development, while ensuring vital health infrastructure can truly set the stage for India to become Atmanirbhar in coming times,” Sanjay Aggarwal, President, PHD Chamber of Commerce & Industry, told Financial Express Online. 

Also Read | Budget 2021 Expectations: Why Budget will be damp squib on personal income tax, corporate tax relief

Level playing field for industry and exporters competitiveness

The focus of the government to create a level playing field in the country will increase the competitiveness of our industry and exporters; also, a reduction in imports of the items where India has domestic capabilities, would lead to Atmanirbhar Bharat, Sanjay Aggarwal added. 

Meanwhile, Finance Minister Nirmala Sitharaman had said that if the government doesn’t keep up the momentum of economic growth at this time, the efforts and stimulus provided towards boosting India’s economic recovery would go in vain. The Atmanirbhar Bharat is a flagship initiative of the Centre that PM Modi has discussed on various international platforms, hence it is expected that the government will mend ways to keep it at the front of many other schemes in 2021.