BUDGET 2021 SOARS HIGH: INDIAN ECONOMY SET TO REVIVE?

Last year, the downturn in economic activity resulted in closure of approximately 35% of MSMEs with 64.7mn people dropping out of workforce and 28 million actively looking for a job. These are shattering numbers for a country that banked upon consumption driven growth.

Budget 2021 has strengthened hopes with proposals to double farmers’ income, establish strong infrastructure, healthy India, opportunities for youth and education for all.

FM announced a slew of measures on healthcare and infrastructure to give an impetus to the Covid-hit economy. Five major sectors have seen a positive impact from the budget – Healthcare, Education, Manufacturing, Logistics and BFSI. The Pradhan Mantri Atma Nirbhar Swasthya Bharat Yojana, which will operate in addition to the existing National Health Mission, has been allocated around Rs 64,180 crore across six years. FM has announced further infusion of Rs 20,000 crore in public sector banks. The government also aims to spend Rs 1.97 lakh crore on various PLI schemes over the next 5 years.

“The Union Budget has endeavoured to deliver a big impetus to critical areas and sectors like infrastructure, healthcare and BFSI. It promises to have long-term positive effects,” says Abhijit Roy, MD and CEO, Berger Paints India.

The budget encourages companies in these sectors to invest and trigger economic activity. Investment through leasing could be a rather wise and valuable decision in such extraordinary circumstances. A2zOnRent’s leasing solutions offer flexibility and agility which can prove to be a boon to companies planning new investments. A2zOnRent has historically acted as a partner that makes your journey relatively inexpensive and a well managed one. 

HEALTHCARE GETS A DOUBLE PUSH

Budget 2021 increased the spending on healthcare by 137%. The govt. aims to increase healthcare spending to 3% of the GDP by 2022.Under the “Prime Minister Atma Nirbhar Swasth Bharat Yojana” an investment outlay of ?64,000 crores over 6 Years has been announced: One of the main interventions proposed is setting up of integrated public health labs in all districts and 3382 block public health units in 11 states. Around 17,000 rural and 11,000 urban health and wellness centers will be set up.

Health Ministry’s modality for setting up the aforementioned labs as indicated from other parts of the Budget speech is through Public-Private-Partnership (PPP) Mode. It means setting up of new pathology labs in collaboration with the private industry. This is where existing Labs can quickly grow by leveraging Leasing models such as those offered by A2zOnRent. Labs can benefit from asset financing solutions and A2zOnRent’s operational excellence to build onto their network across the country.

EDUCATION: REWRITING ON A CLEAN SLATE

The budget has touched upon the much-anticipated implementation of National Education Policy through which 15,000 schools will be strengthened initially.

The education budget is reflective of the impetus the government is placing on making our education system relevant and productive. Besides 15,000 schools,100 new “Sainik” schools will be set up in partnership with NGOs, private schools and states and 750 Eklavya Model residential schools will be built in tribal areas. On school education level, funds for “Kendriya Vidyalayas” have risen from Rs 5,516 crore to Rs 6,800 crore. Allocation for mid-day meal schemes and Navodaya Vidyalayas have increased by Rs 500 crore each.

By the time this amount trickles down and reaches the beneficiary schools, it is imperative that these schools prepare themselves in anticipation of next academic year. While Schools expand their footprint across various cities/towns, they can use all the help for managing cash flows judiciously. While A2zOnRent’s leasing solutions can help with efficient management of cash flows, its expertise in managing end to end asset lifecycles can be even more beneficial as School management can then focus on child development while A2zOnRent procures, maintains, upgrades and services their computer labs or Desks or Auditoriums. 

MEGA ANNOUNCEMENT FOR MANUFACTURING SECTOR

“Infrastructure and financial capital strengthening was a must to achieve the dream of India becoming a 5 trillion economy,” Nirmala Sitharaman said. To build and support local industry, the “Aatma Nirbhar Bharat” (ANB) programme, is recalibrating the entire range of tariffs on imports and exports.

To boost manufacturing, the existing Production Linked Incentive (PLI) scheme is expected to be allocated ?1.97 lakh crores over 5 years starting from FY2021-22.

A core thrust of the PLI scheme is to build resilient domestic supply chains for 13 products/sectors namely: Electronic/Technology Products, Automobiles & Auto Components, Pharmaceuticals, Telecommunication & Networking Products, Textiles, Food Products, Solar PV Modules, Air Conditioner & LED’s, ACC Batteries, Specialty Steel, Mobile Manufacturing, Drug Intermediaries and Medical Devices.

Several manufacturers can benefit from PLI scheme with the assistance of Leasing assets such as heavy machinery, manufacturing lines, warehouses, etc A2zOnRent,for instance, has a wide product portfolio for the food industry which includes automatic/semiautomatic machinery for food processing, food drying, coffee processing. Choosing the equipment from A2zOnRent, guarantees technologically advance machinery that can influence performance and efficiency with optimal design and construction depending on the specifications and requirements of the organization.

BETTER LOGISTICS ECOSYSTEM

By March 2022, Ministry of Road and Transport under the “Bharatmala Pariyojana” (allocation of ?5.35 lakh crores) aims to build an additional 11,000 kms of national highway corridors covering the state of Tamil Nadu, Kerala, West Bengal and Assam.

- Railways will commission and monetize the Eastern and Western Dedicated Freight Corridor assets for operations and maintenance by June 2022.

- 7 Major Sea Port Projects worth ?2000 crores will be offered to private sector for managing their operational services in PPP mode.

Government’s massive push to the logistics industry in highways, railways and sea ports opens up an large opportunity for this industry to make use of hire-purchase (leasing) as a integral part of construction and development plans, as the asset requirement to undertake projects of such proportion is also massive. The major challenge is the deployment and maintenance, of both heavy machinery and everyday use technology such as laptops, at dispersed locations across the country. This is where companies like A2zOnRent can play an important role, as it is more than just a leasing company – With national network of servicing personnel, A2zOnRent is the most able to solve asset management challenges of logistics and infrastructure sectors.

BFSI EMBARK ON REFORM ROAD

Raising FDI limit in the insurance sector from existing 49% to 74%, is a revolutionary step to encourage growth in this sector.

Recapitalization of PSB’s to the tune of ?20,000 crores which among other things will allow the banks to set up additional branches/ATM’s and expand their presence to reach out to a larger set of consumers. This expansion can be aided by managing cash flows in a delicate balance of direct investment and leasing.

In 2020, companies had their moment of reckoning for their businesses. A2zOnRent has in the past helped their clients under HoReCa, IT/ ITES and Co-living deal with specific challenges and foster a sense of trust by giving cost-friendly and long-term sustainable solution.

A2zOnRent is not just a leasing company. It is an embodiment of operational excellence and innovative asset lifecycle management methods. Leasing can be efficient if you have the right partner. Find out if it works for you - visit https://www.a2zonrent.com