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Expectations From The Budget 2019 From Industry Leaders

The Budget this year comes at a time when the nation prepares for the general elections, The Automobile Industry is high expectations with GST rates.

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Mr. Harish Sheth, Chairman & MD, Setco Automotive Ltd. 

The economy is on a firm footing and we expect the growth to continue in the MHCV segment which directly reflects the strength of the economy. With the budget around the corner we would be keen to see GST reduced from the current 28% as the benefit would be there for the end-customers. Further we hope that the budget spells out some incentives towards phasing out the old trucks and a seamless implementation of BSVI as this has a strong and positive impact of environment and road safety. India’s challenge is not growth but sustainability of our ecology and a drastic improvement in our air quality – we need to think about the future generations and their safety. 

Mr.Karan Bedi, COO, Blaupunkt.

As not many days are left for the announcement of interim Union Budget FY19, a lot of high expectations are being made by the varied sectors with it. The Indian appliances and consumer electronics industry managing the hiccups produced by GST implementation last year has now set on the budget in the hope of favorable policies and regulations. It relatively had been a stable position in comparison to others in the volatile market scenario, but there is definitely a need to create a conducive environment for the new entrants to grow. Lowering the taxes, clarifying and simplifying the regulations for making a foreign direct investment, and facilitating R&D in the domestic market are some of the initiatives we expect to be given due prominence in this budget.

Rajesh Loomba, Managing Director, Eco Rent A Car

Previous budgets and governments have always neglected tourism, I hope in this budget some focus is put into tourism as a generator of employment and not be treated as an elitist activity

The government did not deliver as per promise in 2018 Budget. Taxation on tourism remains regressive. There are no incentives on new investment whereas tourism and tourist transportation creates the most employment per rupee of investment

Mr. Surajit Das, Founder and CEO, Routematic:

The startup trend in India is on a spectacular growth path, however despite Government bringing various regulations to promote the emerging business, entrepreneurs continue to face various challenges. This time start-ups, SMEs and entrepreneurs are expecting this budget to abolish angel tax for Government recognized start-ups. This will unleash its own potential and will help Start-ups to grow by leaps and bounds. The early stage start-ups will also be nurtured with more investments 

Mr. Sunil Gupta, MD and CEO, Avis India:

India is rapidly growing to be a large market for travel and tourism industry and is expecting international tourist arrivals to reach 30.5 million by 2028, therefore the government should focus more on improving the infrastructure of the country in terms of developing more roads and maintenance of tourist places for increasing the economy from tourism.

The government needs to allocate much more towards infrastructure this year as last year government increased infra spend towards roads, air, rail and inland waterways by almost 22% to 5.97 lac crores, wherein we are expecting it to get an increase to 30% this year.

Vinnie Mehta, Director General, ACMA 

We anticipate the forthcoming Interim budget to uplift the market sentiments which will allow for growth and development of the domestic auto and auto component sector. With the entire auto industry undergoing a technological transformation on the front of emissions and safety, enhancing spend on R&D and creating infrastructure for innovation are of utmost criticality for the auto component industry to stay relevant. Facilitating new product development through a technology development and acquisition fund as also enhancing the rate of weighted deduction on R&D spend are a need of the hour.

Additionally, reducing customs duty on raw materials, especially steel and aluminium alloys, which account for over 60 percent of the industry’s inputs will enable the sector to deal with increasing costs.

Mr Sohinder Gill, Director General (SMEV).

Electric mobility needs stable and long term policy support, concentrated dose of customer incentives and massive awareness campaign to reach a target of 30% EVs by 2030.

·         SMEV expects the budget to allocate at-least 20000 crores to be spent in next 2 years and target at-least 1 million EVs in top 10 most polluted cities.FAME 2 must be announced with a 6 years plan and time bound implementation. SMEV recommends a notional green cess on all IC engine vehicles to create this corpus rather than dipping into exchequer.

·         The Indian supply chain for critical powertrain components will come up only if there are enough vehicles on the road. Till then the current import duty concessions should continue so that the vehicles do not end up becoming costlier.

·         Making EVs and infrastructure an integral of the Smart City project will help a lot; The government should give more thrust on e-mobility under the smart city project which is missing, currently.

·         Encouraging PPP Model in EV sharing services is a must- The government should set up a framework to encourage PPP model in services like Bike and Car sharing through which the required infrastructure support can be addressed.

Mr. Vilas S Tawde, Managing Director and CEO, Essar Oil Gas Exploration and Production Ltd. 

Our recommendation is to come up with specific provision or clarification on non-applicability of Service Tax or GST on Royalty payments to Government as royalties are in the nature of compulsory payments and not in the nature of any consideration for service performed or to be performed by the Government. Royalty payments should not be required on payment of Royalty to avoid payment of dual tax.

We would recommend to bring in petroleum and petroleum products within the purview of GST at the earliest to ensure smooth flow of credit and avoid any stranded taxes for the competitiveness of this critical sector. At the least Gas should be brought under GST.

We recommend to exile the service tax on such incidences until the E&P business is included in the purview of GST so that there is proper cascading of tax credits.

Mr. Prashanth Doreswamy, Market Head, Continental India

 Positive momentum towards improving the business environment and clearer policies are factors which I believe will give a strong push towards growth.

Given the ambitious e-mobility drive, it would be great to see the government incentivizing hybrid technology as a bridge to achieve electrification targets. An immediately commercially viable solution would be the 48V Mild Hybrid, which provides excellent total cost of ownership. We also expect the government to launch schemes or policies (e.g. next phase of FAME) that encourage electric vehicle purchase by end users.

The government should also bring in scrappage policy on high-priority by incentivizing replacement of vehicles which are more than 15 years old in the form of rebates in GST, Road tax, subsidized financing, etc. This will also help in realizing the benefits of clean air with the impending BS VI introduction.

Mr Ayush Lohia ,CEO Lohia Auto Industries.

The auto industry is pinning hope on the upcoming union budget 2019 as it will uplift consumer sentiment and infuse positive environment for auto industry including the electric vehicles.

Auto mobile industry players are working toward extension of the incentive scheme for electric mobility under the faster adoption and Manufacturing of Hybrid and Electric vehicles in (FAME). It is hoping for a positive response from the upcoming union budget with a minimum 10 years extension therefore making it long term. This extension will lead to achieving India’s electric vehicle target which in turn will undoubtedly help in reviving of the industry.

Also incentives Under FAME Policy should include all electric vehicles and not limit incentives to only Advanced Batteries like Li batteries. We are positive that the new budget will include Lead Acid Batteries in 2 wheelers and 3 wheelers and not limited to registered vehicles only like in Electric 2 Wheeler < 250 Watts Incentives have been withdrawn on vehicles where registration is not required.

In addition GST on all categories of Electric Vehicles including batteries should not to Exceed 5 % with Input Tax Credit availability.

Furthermore there should be ease of Retail Finance Availability under Priority Lending like in Agriculture not only from Nationalised Banks but also through NBFC and Pvt Banks.

In the upcoming budget we are also hoping that Retail Finance with Margin Money will not exceed 10 % and Sub vented Rate of Interest should be kept maximum 5 % ROI on all Commercial Vehicles including 3 wheelers.

Lastly there should be scrap Incentive on all passenger and Commercial Vehicles under 7 years.

Mr. Rajeev Kapur, Managing Director, Steelbird Helmets

India has a vast population of 1.3 billion therefore India cannot survive with agriculture and service industry alone.  We need to become an industrial hub. And to become an industrial hub the government should give a lot of benefits, subsidies and incentives to the industries based on all labour intensive units. Also to overcome the current problem of Chinese products flooding the Indian market we need to ensure that we start manufacturing locally. And this is exactly what the superpower countries are doing where India is lacking.

Furthermore, for each and every district   the government should announce schemes so that every district can become a city. For that any plant which a particular company sets up in a district there should be no GST or income tax and they can also claim the GST input. This will facilitate double benefit.  By claiming the GST input they can take credit, there will be no GST on the products and no income tax for a period of 10 years.

Moreover there should be slabs. For example if a company has over 1000 employees recruited then they should get 20% rebate in GST and income tax . Likewise above 2000 there should be a rebate of 40%, for over 3000 it should be 60%, above 4000 it should be kept 80% and for above 5000 the rebate should be 100% . This will help uplift all the rural areas and help them come at par with the metropolitan cities. It will make our country a manufacturing hub and bring down the crime rate as every individual will become productive.

As far as the helmet industry is concerned, GST shall not be levied on helmets as they are meant for safety. Helmets are life saving device just like medicines. Therefore, just the way there is no GST on medicines so shall helmets be exempted.

Moreover, unless helmets are exempted from taxes, prices will go up and the effort of the government to roll out the new ISI standard and mandatory use of ISI helmets will be defeated.

Therefore, helmets should not be treated like other commodities. Every day approximately 13 people die in road accidents. Many of these deaths happen because of no or poor quality of helmets. In a country where people consider helmets as a financial burden, a zero percent GST will help to win people’s faith in good quality helmets and will induce them to buy and understand its significance.”

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Budget 2019 automobile industry