The budget lacks immediate measures to revive the sector in crisis: automotive industry
NEW DELHI: The automotive industry said on Saturday that the 2020-21 Budget lacked measures to revive the sector that has been experiencing a prolonged slowdown.
However, the industry praised the government's initiative to increase customs tariffs on imported electric vehicles (EV) and said it would help establish local production of such products in the country.
siamhadmadespecificrecommendationsonthestepsthatcouldhaverevivedthedemand,suchasanincentive-basedvehiclescrappingscheme; He added that the budget allocation for the acquisition of diesel buses by STU and the zero tariff for lithium-ion batteries, which do not appear to have been considered.
The car dealership agency FADA said the Budget lacked immediate demand drivers for the auto industry.
“It was disappointing that, as part of the automotive ecosystem, no direct benefits were announced for the automotive industry. The budget allocation for an attractive incentive-based scrapping policy would have been a boost in demand for commercial vehicles, said FADA President Ashish Harsharaj Kale.
Although GST is not part of the Budget, an indication about the rationalization of car rates would have brought a great respite to the industry, he added.
However, the automotive components body ACMA expressed satisfaction with the measures announced in the Budget, especially the focus on the development of the rural economy, manufacturing and infrastructure.
We are pleased that the government has announced a retention scheme of Rs 1,000 million rupees for medium-sized companies, including those of automobile components, to boost export development, R&dandtechnologicalimprovement,saidthepresidentfromacma,deepakjain.
wealsoexpectthegstcounciltoconsiderlowertaxationofproductssuchascarsthathaveamultipliereffectonjobsintheeconomy; The resulting economic growth will more than compensate for lower tax rates, Ayukawa said.
Similarly, the managing director of Mahindra&Mahindra, Pawan Goenka, said that structural changes, in the way things are being done, may not be enough to have an impact tomorrow, but they will definitely give the economy a strong boost to long term.
The managing director of Nissan Motor India, Rakesh Srivastava, said that capital infusion into PSU banks and tax reforms will encourage more liquidity in the market.
The impulse of the Budget to boost infrastructure and help the rural economy will help to counteract the slowdown of the car, he said on Twitter.
EY Fiscal Leader, Automotive Practice Pramod Achuthan called the Budget a mixed stock market for the automobile sector.
“A greater allocation of infrastructure is positive for the industry ... the scheme to boost electronic manufacturing along with a higher customs tariff on imports of electric vehicles and parts should encourage the national electric vehicle industry. The lack of directional guidance on cutting the GST rate or reducing the cess is disappointing, he said.
Finance Minister Nirmala Sitharaman announced on Saturday an increase in customs duties on various types of electric vehicles.