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The automotive industry has welcomed the Budget, stating that the measures would lead to a growth in infrastructure and rural development. Even though, there were no big policy announcements for the sector, it would be one of the beneficiaries of increased savings due to direct and indirect tax proposals.
“We expect the steps announced by the Finance Minister to lead to an improvement in economic sentiment which will, in turn, benefit the automobile industry in the long-term,” said Joe King, Head at luxury car manufacturer, Audi India .
The Finance Minister, in his Budget speech, extended the excise duty concessions by six months up to December 31, 2014, adding “we expect the industry to show positive results in the coming months.”
“Any further extension, change in those duties all will depend on the demand in the automotive sector in the next five months. Government intention to introduce GST soon is also a welcome move. Increased thrust of Infrastructure development across the country, including north east and in rural areas, is likely to increase vehicle ownership in those regions,” said Abdul Majeed, Partner at Pricewaterhouse.
Smart cities
The Finance Minister, echoing the Prime Minister’s vision of developing 100 Smart Cities, allotted about Rs 7,060 crore in the current fiscal.
“We welcome the announcements related to infrastructure growth such as development of 100 smart cities and rural roads development. Also, the auto industry will be one of the beneficiaries of increased savings due to direct and indirect tax proposals,” Audi’s King added.
"The government seems to have adopted a balance approach as far as auto industry is concerned in its first budget. As expected there were no big policy announcements in the automotive sector,” PricewaterHouse’s Majeed said.
"The measures for development of infrastructure development like highways, industrial corridors, housing, manufacturing, FDI in defence sector and power projects are welcome and will contribute to demand generation for commercial vehicles, which have seen record lows in recent years,” said A. Ramasubramanian, President at AMW Motors.
“Though there were no big bang announcements, the intent of the Budget is clear. It is a move towards the right direction and there is an attempt to put a lot of placeholders through the various Rs 100 crore schemes. In fact, I see this budget as a blueprint to the direction the Government will take over the next nine months,” said Pawan Goenka, Executive Director, Mahindra & Mahindra.
“Specific to the automotive industry, the extension on reduction of excise duty had already been notified. We did expect an announcement on incentives for electric vehicles which did not come through. A firm date for GST implementation would have been welcome,” he added.
“The Budget 2014 presented today is based on fiscal prudence with a progressive outlook. We appreciate his considerations and his aim to achieve 7-8 per cent GDP in 3 to 4 years. Structural reforms, including FDI liberalisation in defense and insurance, initiatives to support local manufacturing and commitment to remove retrospective taxation, are significant steps from a larger macro-economic perspective,” said Kenichiro Yomura, President at Nissan India Operations.
“The previous financial year was challenging for the auto industry and we were expecting bolder reforms in favour of the auto industry,” he added.
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