- Education And Career
- Companies & Markets
- Gadgets & Technology
- After Hours
- Banking & Finance
- Energy & Infra
- Case Study
- Web Exclusive
- Property Review
- Digital India
- Work Life Balance
- Test category by sumit
Budget 2019 For Indian Auto Sector: What Are The Experts Saying
Stock Market gives a boost to the auto sector with a number of sops being rolled out and not a single bad news. Here is how the industry experts react to the interim budget 2019.
Photo Credit : Reuters
Kavan Mukhtyar, Partner and Leader - Automotive, PwC India
Thrust on uplifting Rural and Agrarian income will have positive impact on 2 wheeler, tractors and LCV segment.
Society of Manufacturers of Electric Vehicles (SMEV), President, Sohinder Gill
Finance Minister Piyush Goyal’s mission of bringing an Electric Vehicle revolution to India by 2030 is a truly path-breaking and will surely provide much-needed impetus to the industry. The government’s focus on the use of clean energy in the transportation sector would certainly help our country tackle the issue of climate change.
Ayush Lohia ,CEO Lohia Auto Industries
As per the 2019 budget Electric vehicle is a key part of governments vision for 2030 budget. Also it as been indicated that next decade will witness a greater push towards electric vehicles. However considering the environment concerns we were hoping for something concrete in the 2019 budget. Moreover to meet the target of 2030 the government needs to plan today instead of giving the electric vehicles a push at a later stage.
Rajan Malhotra CEO & Founder Otodato
Overall a good budget. Government’s vision 2030 of reducing Petroleum imports by promoting electric vehicles and energy storage devices is laudable and indicates a transformation in the automotive industry in on the cards. The automotive value added services would also need evolve in accordance to the emerging trends and telematics data would play the most important role in the growth of our automotive industry and its ecosystem partners .
Madhukar Manpuria, Founder and CEO, of MYNEWCAR.
We welcome the central government's move to lower the import duty on CKD and SKD of electric vehicle components. This is a positive step towards making electric vehicle affordable and will help in creating a demand for electrical vehicles in the country. With the slew of new Electric cars being launched by major car manufacturers by 2020, We believe the future of mobility in India is electric!
SIAM is happy to note the emphasis laid on electric mobility in the 2030 Vision of Government of India that aims at increasing energy security, reducing oil import dependence and reduce vehicular pollution. SIAM would work with Government in creating an ecosystem that would enable us to achieve the target of becoming the world leader in electric mobility.
Ministry of Finance has recently notified definition and customs duties for Completely Built Unit (CBU), Semi-knocked down unit (SKDs) and Completely knocked down units (CKDs) of all categories of electric vehicles. The move has been welcomed by SIAM, however the customs duty for lithium ion battery has been increased from Nil to 5% for electric vehicle manufacturing. Since cell manufacturing is at very nascent stage at present in India, the current practice of importing cells is expected to continue and hence the change will only lead to increase in cost of manufacturing Electric vehicles battery packs, which is expected to be dampener in generating demand for electric vehicles. SIAM requests a review of increase in customs duty on cells.
Charles Frump, Managing Director, Volvo Car India
We welcome the Government’s vision to protect the environment and lead energy revolution with Electric Vehicles in the coming years. Volvo Cars’ future roadmap is completely in sync with this vision as globally we plan to go fully electric in the next few years. The fully electric car will make its entry into the Indian market soon after its global launch. We not only plan to launch the first-ever locally assembled plug-in hybrid vehicle in India later this year but also bring in four more plug in hybrid vehicles next year.
Mr. P Balendran, Executive Director, MG Motor India
The 2019 interim budget focuses on boosting the rural economy, small farmers, rural infrastructure as well as low and middle income segments. It should have positive impact on market sentiments and should lead to higher disposal income for discretionary consumer spends. Income tax relief given to middle income families and the focus given to the rural sector should help improve economic activities and encourage consumption. With a focus on Make in India, it is also imperative for the government to generate skill enhancement opportunities in the field of EVs, especially in the research and development of lithium-ion batteries and related components. Although the recently announced cut in customs duty on certain electric vehicle components from the earlier 15-20%, to 10-15% curently will augur well for EVs during the longer term, there could have been more done in this regard to make India adopt EVs at a faster rate. We hope these factors including charging infrastructure will be addressed in the FAME II policies to be announced soon,
At the macro-economic level, bringing the fiscal deficit down to 3.4% in the current financial year and maintaining the current account deficit at 2.5% of GDP this year are very encouraging announcements. Overall the measures announced should increase the disposal income in the hands of the consumers and should help the auto sector in registering growth during next financial year, especially in two wheelers and small cars.
Mr. Venu Srinivasan, Chairman, TVS Motor Company Limited:
This budget has empowered and increased buying capacity of every sector and segment of people. Tax exemption up to Rs. 5 Lakh per annum income for individual tax payers is a historical step, which will provide more disposable income at hand for the working class. The decision will have an impact and there we expect more buyers of two-wheeler vehicles and in turn help the industry’s growth. The construction of rural roads having an allocation of Rs 19000 crores under the Pradhan Mantri Gram Sadak Yojana will be another boost towards demand for rural economy. Two-wheeler industry in rural sector will also be positively impacted as Rs 6,000 per year cash support to about 12 crore small and marginal farmers will be provided under Pradhan Mantri Kisan Samman Nidhi scheme, which will cost the exchequer Rs 75,000 crore annually.
Mr. Ashish Harsharaj Kale – President - Federation of Automobile Dealers Associations (F A D A)
The recently concluded Interim Budget is a clear demonstration of the government’s vision towards a developed & sustainable India. The recommendations are highly encouraging specially for the middle class and rural India. Even though, there were no direct benefits to the Auto Sector, with the new tax rebate for individuals of income up to Rs. 5 Lakhs & assured income for farmers, there will be an anticipated surge in the positive customer sentiments with more liquidity coming into the system. This will surely push up the demand for 2W, Light CV and Tractors.
Government's focus on rural roads with an allocation of Rs. 19,000 crores under Pradhan Mantri Gram Sadak Yojna will definitely have a rub off effect on sales uptick for Construction Equipment Vehicles and Commercial Tractors Segments. The government’s vision 2030 is a clear road map for building India as a stronger nation. As part of Automobile industry, we are in sync with government’s vision for reduction of Crude Import and making India self-dependent on Energy Consumption. F A D A welcomes the focus put on use of Bio-fuels, Hybrids and Electric Vehicles.
Mr. Aditya Loomba, Jt Managing Director, Eco Rent A Car
This budget has brought some much-needed relief to the real estate industry. The large budgets assigned to defense purchases were also much needed. The abolishment of customs duty on capital goods is also welcomed.
However, GST needs to be revised for various sectors especially the hospitality sector where it's currently very high especially for Self Drive Car Rental services. I hope the government will give its due importance to the Tourism and Passenger transport business and relax the taxation in the coming financial year.
Mr.Greg Moran- CO-Founder & CEO, ZoomCar
These statements by the government certainly shows that the policymakers are looking forward to a strong ecosystem driven approach to the problem statement of urban pollution. This should create an environment for long term investment on the part of the private sector,
Mr. Rajeev Kapur, Managing Director, Steelbird Helmets.
The budget has been indeed surprising as it’s different from the predecessors. A lot of rebates and good news on tax front for middle class. Income tax rebate for individuals earning till 5 lakhs is going to prove beneficial to the middle class and something that they have surely wished for. It is infact beyond their expectation. Apart from this lot of other reforms have been proposed to support the Taxpayer like increase in standard deduction for salaried individuals, raising the TDS limits, Exemption from tax on Second Self occupied house etc
Then the government has also planned to give 12 crore farmers 6000 rupees. This is another silver lining in the budget and a big move which will uplift their current condition.
Even on the security front they have spent 3,00,000 crore which is again a gigantic and a much needed move.
So be it escalating living standards by their cleanliness drive, providing benefit to the common man, the farmers or strengthening security, all in all the government is surely far sighted. It is working at the root level for that.
Mr. Shekar Viswanathan, Vice Chairman & Whole-time Director – Toyota Kirloskar Motor
The overall budget perspectives are positive covering wide spectrum of areas as health, skill, infrastructure, agriculture - as a big boost to the economy. The resource allocation across the budget has been thoughtful. The fiscal deficit at 3.4% of GDP reflects better economic stability with the impact on inflation outlook being relatively muted. As we see, the continuing path of fiscal incentives would be growth positive, accelerating the nation’s development. Further, the thrust on overall rural development will certainly accelerate the buying sentiments of the consumers and also the increased tax exemptions will enhance the disposable income of the people, thus contributing to the upliftment of the society with improved living conditions.
The focus to strengthen the infrastructure [road, rail & air] will certainly facilitate industrial growth and promote ‘Make in India’ paving way for better mobility & accelerate the ease of doing business.
We applaud the Government of India’s focus on EV drive towards reducing fuel import. Toyota has been a pioneer in electrified space offering alternate mobility solutions [HEVs, EVs, FCVs, PHEVs] globally. We would further continue our concerted efforts in this direction to boost sustainable mobility to enhance ever-better & comfortable living of the society. The vehicle emission based tax regime would boost this EV vision, towards achieving a cleaner and greener environment.
We hope that the tax revenues will continue to grow, enabling the implementation of the budget announcements. We now look forward to the full-fledged budget that would be presented during May-Jun this year.
Mr. K. Kumar, Partner, Deloitte India
· In a number of ways, the budget was on expected lines. For some time now, the big push to address the agricultural sector difficulties was being spoken about. It will be interesting to see how the new proposals sit with what is already in place or what some of the new administrations in states that went through elections seek to implement as loan waivers
· The focus on the workers in the unorganised sector was expected and welcome
· Fiscal deficit being contained is good and will help the long term stability. In turn, this will aid demand creation and investment in the capital goods sector. The pertinent question is what is kept outside the balance sheet, as some economists and CAG point out and if that will come back to haunt the economy later
· The changes made to the personal income tax structure may help with sustaining demand for appliances and domestic goods. Further, the interest subvention, cash transfer, etc may help rural demand for appliances
· The investment in railways and defence can potentially accelerate in the manufacturing sector, assuming these investments are quickly converted into projects
· Given the nature of the budget, it is understandable there is no mention of private participation in infrastructure building. While it is important for the economy to have a significant role for private sector in this sector, that is being left to the incoming government.
Ola Mobility Institute
We welcome the budget's impetus on revolutionizing the transportation and energy sectors with a holistic industry-wide focus on electric vehicles, energy storage, and renewable energy. This clean and green India initiative will secure and strengthen the economy by reducing our dependency on fossil fuels. We commend the government for its vision to make India a world leader in sustainable mobility. With such government support, 2019 could be the start of an era that witnesses rapid electrification of high utilization vehicles, i.e. shared mobility solutions such as public transit, commercial vehicles, three-wheelers, delivery services, etc.