Banking sector- Pre budget expectations

One of the important concerns of the country was that of the non-performing assets or the NPA’s. This has been a threat to our financial system for quite a while, and the governments at every budget session try to bring in some measures to ease their problems. New policies in the prior budget were being introduced to secure the banks and sustain them for a long time in the market. Policies of lending have improved and stringent norms are being introduced to curtail fraudulent practices by loan applicants in the nation. If one were to assess the performance of the banking sector, its performance is said to be in a ‘stable’ state. Public sector banks stood to gain in this fiscal period to record a high-profit margin of 7.3 per cent. It could have been a bit higher if it were not for the pandemic. The reason for the same is ending the long-standing loan problems which are said to be taken care of by better recovery policies and measures. The recovery of the PSBs (public sector banks) is said to be closer to Rs. 5000+ crores which are said to be the highest one could see since 2015. The capital adequacy ratio is said to be recorded this year is said to be recorded at 7 per cent as per the RBI reports which are healthy. This has helped improve the profitability and sustenance of public sector banks and overall, the sector as a whole. It has helped in reducing the stress levels and helped to deliver promised services to customers.

The policies in terms of more capital infusion of the banking sector are highly unlikely in the coming budget. The budget of 2022-23 is one of the most anticipated aspects that every individual, businessman, household and workforce of the nation looks forward to. Anticipation for more policies, amendments of the prior policies and introduction of newer ones is always been the norm.

One of the important concerns of the country was that of the non-performing assets or the NPA’s. This has been a threat to our financial system for quite a while, and the governments at every budget session try to bring in some measures to ease their problems. New policies in the prior budget were being introduced to secure the banks and sustain them for a long time in the market. Policies of lending have improved and stringent norms are being introduced to curtail fraudulent practices by loan applicants in the nation. If one were to assess the performance of the banking sector, its performance is said to be in a ‘stable’ state. Public sector banks stood to gain in this fiscal period to record a high-profit margin of 7.3 per cent. It could have been a bit higher if it were not for the pandemic. The reason for the same is ending the long-standing loan problems which are said to be taken care of by better recovery policies and measures. The recovery of the PSBs (public sector banks) is said to be closer to Rs.5000+ crores which are said to be the highest one could see since 2015. The capital adequacy ratio is said to be recorded this year is said to be recorded at 7 per cent as per the RBI reports which are healthy. This has helped improve the profitability and sustenance of public sector banks and overall, the sector as a whole. It has helped in reducing the stress levels and helped to deliver promised services to customers. The policies in terms of more capital infusion of the banking sector are highly unlikely in the coming budget.

Automotive sector- Pre budget expectations

The automotive sector has seen a severe crunch in supply shocks and chip shortages. Policies of the government in terms of the new emission norms have the individual as well as the industrial levels in a state of confusion in terms of the costs being transferred to them, which invariably increases the prices. The supply chain is affected, thereby the level of consumption is also seen a drastic change. The performance of the stocks of the major players in the market has seen a drastic change. Players like Maruti Suzuki, Tata, Hyundai and many others, have seen their fair share of ups and downs in the market pre-pandemic. During the pandemic, it has had its fair share of problems like the shortage of semiconductors, which impacted the sales figures for the passenger cars in the nation. Despite all this sector has managed to launch many new vehicles, particularly noticeable is that of the electric car segment. This is said to be one of the positive signs of the year 2021. Though the scare of a third wave glooming in our way the slight growth may achieve may go back into a slump. Key players anticipate stable growth since measures were taken to overcome the shortage of the chips used for the electrical components. The sector anticipates an extension of the FAME II subsidies for at least 2-3 years to understand and capture the sales of the electric vehicle in the market. The recent policies related to scrappage have helped in terms of generating new vehicles sales in the market. The only concern for the passenger and the luxury cars segments is that of the rise of production every step of the way. This is one of the main areas the sector, aims to see some kind of readdress of the underlying issues.

When one wants to look back in 2021, there has been a fair share of positives and negatives in the budget that was being presented. The introduction of the scrappage policy has helped in introducing more new cars with modern-day safety kits which has made roads safer. In addition, this has helped in regulating the pollution in our country. Bringing some kind of policies to help in the introduction of the expansion of roadways in our country. It has helped in widening the network of our roads and also helped in employing many across the nation. The introduction of budgetary allocation for research and development of new tech is one of the important highlights. Adding to this is the introduction of support to the MSME sector for producing in house parts and ancillaries has given a boost to the localisation of production of many vehicles in the market.

The automotive component sector is seeing a positive sign in terms of the growth prospect in the fiscal of 2022-23. Some of the cars, we produce there is a lot of them being exported to America and the majority of them are in the SE Asian market. Though the revenue is said to be fallen by a third due to the chip shortage, high raw material costs and also the rise in pricesthe sector is feeling the pinch to grow further to gain better profit margins. The missed aspects which failed to help the Indian buyers back in 2021 if introduced in the current budget would benefit the sector a great deal. For one a rational GST rating should be announced in terms of various segments of vehicles in the market. Standard rates for a two-wheeler and a four-wheeler would only increase the cost and deviate the customers from purchasing the vehicles. Some consensus on the introduction of GST on petroleum products would be beneficial. This would simplify the tax structure and also make the products more affordable. An incentive should be introduced while purchasing a vehicle. It would benefit the salaried classed section of our society since they make up a major portion of the population in our cities and towns. An announcement in the incentivization of purchasing an electric vehicle could be more beneficial to our consumers. Being a new segment of vehicles in our nation, if a reduction of rates could be done under a revision of rules in the FAME II, would create massive demand for the vehicles in this segment.