Up but not out of the woods: Pain points & what's on offer in Budget

Pain points

Capacity utilisation is higher than it was before, but there has been a dip in the latest readings. Subdued demand may affect utilisation rates going forward as the world braces for a potential global recession. The domestic demand situation has also been challenging.

Commercial vehicle sales have faced headwinds.

There was a 7 per cent year-on-year decline in the January numbers reported by the country’s largest manufacturer Tata Motors. Commercial vehicle sales are seen to be a proxy for economic activity.

What’s on offer

Income tax relief offered to tax payers can put more money in the hands of consumers. This in turn can help boost their ability to make additional purchases, acting as a boost for demand. The proposals cover salaried professionals as well as pensioners.

The government has sought to boost local manufacturing of high-end automobiles through higher Customs duties. There are also sops in the form of Customs duty exemptions for lithium-ion battery manufacturing, as well as a scrappage policy.