Union Budget 2018-19 Is Pro-Development And Committed To The Welfare Of The Rural Economy: Vinod Aggarwal
"From the CV industry perspective, we are extremely happy to see the government’s continued focus on infrastructure," says Vinod Aggarwal, MD & CEO, VE Commercial Vehicles
Union Budget 2018-19 is pro-development and committed to the welfare of the rural economy. There is much emphasis on boosting income for rural populace and improving farming which is good news for the industry. The agri-market and infrastructure allocation of INR 2000 crores will translate into demand for farming equipment and light commercial vehicles. Increase in rural credit will also have positive implications on the much-needed finance penetration here.
From the CV industry perspective, we are extremely happy to see the government’s continued focus on infrastructure. With 21% more expenditure towards infrastructure and allocation of INR 5.97 lakh crores, the government is ensuring India continues to charge ahead and remain one of the fastest growing economies in the world. The FM also confirmed exceeding the highway construction target of 9000 km by end of FY18. The face of India is continuously evolving on back of improving road connectivity and the pace of urban development and Smart Cities.
All of this is positive for the CV industry, especially the construction and mining segment players. Real-estate incentives like affordable housing will also help growth of construction equipment. However, there should also be a mechanism in place to monitor and ensure that planned budgetary expenditure is happening. Focus should be on relieving bottlenecks and ascertaining faster execution of projects.
We also support the government’s agenda of allocating INR 14.43 crores towards job creation in rural India. Government’s focus on improving quality education will also help in employment generation and creating a skilled workforce that suits the requirements of the industry.
However, there were a lot of expectations in terms of a clear policy roadmap specially focused on the auto sector. To meet the government’s 2030 target for electrification of the transport fleet, we were eager to hear some relief in the GST rate or an announcement on incentivizing R&D and fund allocation that will help the move towards FAME.
We also missed guidance on the much awaited old trucks scrappage policy. This was much needed as it will help clear pre-used truck inventory and further boost demand. It also has many positive implications on government revenue and will also help bring down pollution.
While the fundamentals are looking strong, the objective of the government should also be on strengthening core sectors to ensure this growth is sustained. It will help improve the general sentiment and facilitate spending and especially drive rural consumption.
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