Sectoral Expectations from Union Budget 2021

Archived analysis: this piece covers sector expectations ahead of Union Budget 2021. For the current cycle, see our Union Budget 2026 tax policy preview and capex and MSME opportunities under Budget 2026.

Covid-19 hit almost every industry sector in 2020, but unevenly. Travel & Tourism, Aviation, and Hospitality saw revenue collapse month after month with no clear recovery timeline, while sectors like Healthcare and Pharmaceuticals saw new demand and investment opportunity open up almost overnight. Heading into Union Budget 2021, every sector had a different ask of the government, shaped by how the pandemic had treated it.

Key Sector-Wise Expectations

Travel, Tourism & Hospitality

With occupancy and footfall down sharply through 2020, the sector sought GST relief, an extended moratorium on loan repayments, industry status for easier access to credit, and a dedicated relief package to help hotels, tour operators, and airlines survive until international travel resumed.

Aviation

Airlines carried some of the heaviest pandemic losses of any sector. Expectations centred on a reduction in excise duty on aviation turbine fuel (ATF), rationalisation of airport charges, and continued support under schemes aimed at keeping regional connectivity viable.

Healthcare & Pharmaceuticals

Unlike most sectors, healthcare entered the budget cycle with momentum. Expectations included a higher overall health budget allocation, customs duty relief on medical equipment and APIs, and continued Production Linked Incentive (PLI) support to reduce import dependence on active pharmaceutical ingredients.

Real Estate

The sector looked for an extension of the additional interest deduction under Section 80EEA for affordable housing loans, industry status to unlock institutional financing, and single-window clearance to cut project timelines.

MSMEs

Having leaned heavily on emergency credit lines through 2020, MSMEs wanted continued and expanded access to collateral-free credit, faster GST refunds to ease working capital pressure, and simplified compliance to reduce the cost of staying registered and compliant.

Banking & Financial Services

With asset quality concerns building after loan moratoriums lapsed, the sector sought capital infusion into public sector banks, clarity on the proposed “bad bank” (asset reconstruction company) structure to manage stressed assets, and continued push on privatisation to improve capital efficiency.

Agriculture

Agriculture wanted increased allocation toward irrigation and storage infrastructure, expanded direct income support, and reform measures to strengthen farmer access to markets beyond the traditional mandi system.

Related Budget 2021 Coverage

• Direct Tax Expectations from Union Budget 2021
• Transfer Pricing Expectations from Union Budget 2021
• Union Budget 2021: Detailed Analysis
• Applicability of Section 194Q of the Income Tax Act, 1961
• Budget 2020: CBDT introduces concessional tax rates under new income tax regime
• Budget Income Tax Provisions Related to Charitable Trusts and Institutions