Budget 2023 Expectations: Finance Minister Nirmala Sitharaman is going to present the budget on 2 February. Let's see the impact of the upcoming budget on the Indian auto sector.
Budget 2023: All eyes will be on Finance Minister Nirmala Sitharaman on February 2, when she will present the 2023 budget. Now it has to be seen that what will be the effect on the Indian auto sector from the presented budget. The auto sector is making a good recovery with record-breaking sales of vehicles . If any separate relief is given for this sector in the upcoming budget, then it will help in furthering the retail sales.
The 2022-23 budget was presented as a landmark budget for the transport and logistics sector. The government targeted to increase the National Highway network to 25,000 km and allocated a budget of Rs 20,000 crore for the same. Then 1.4 lakh crore was allocated for the development of railway infrastructure. At the same time, 100 cargo terminals would have been built in 3 years.
FAME subsidy will be given directly to the customer
The trend of electric vehicles is increasing rapidly in India. Despite the challenges in the electric two-wheeler ecosystem, in the year 2022, an average of 83,585 electric vehicles have been registered in the country every month. Sohinder Singh Gill, Director General of the Society of Manufacturers of Electric Vehicles ie SMEV and CEO of Hero Electric, while keeping his demand, said that the Fame Policy subsidy should be given directly to the customers. Instead of a time-based policy, they can have a policy that supports EV till it reaches around 20 per cent level, after which the subsidy can be reduced. They also feel that instead of giving subsidy from the government exchequer, the polluters should be taxed.
According to Girish Wagh, executive director of Tata Motors, there is a need to continue the government's support to promote electric and zero-emission vehicles under schemes like FAME II. Government concessions unless such automobiles cross particular lines with a better level of localization. According to him, the government concession should continue till electric vehicles are made in India and cross a certain limit.
Infrastructure Development Expectations
In a conversation with Express Mobility, Vinod Agarwal, President, Society of Indian Automobile Manufacturers (SIAM) and MD, Volvo Eicher Commercial Vehicles (VECV), is hopeful that the government will continue to focus on infrastructure development in a big way. He said that the government should continue to spend more on development projects, infrastructure and all other such works. As an industry, they would be happy if the government's approach is going forward and they should continue to be a little more liberal in managing the deficit. The government should continue to spend more money on infrastructure and other CAPEX projects. He told that the allocation of Rs 7,50,000 crore made by the government last year was very good and we need the same this time also because we are developing the economy. We need capital expenditure for rural customers. The government knows how to solve the problems of rural consumers. If they are serious about the price and are postponing the purchase, then efforts should be made to persuade them to make the purchase.
GST rate change
On July 1, 2017, the Government of India introduced the Goods and Services Tax (GST) to replace the Central and State Taxes, for which clarity was brought in the manner of tax collection. Under the new tax regime, goods and services are taxed in four slabs – 5 per cent, 12 per cent, 18 per cent and 28 per cent. For the auto industry, there has been a demand to recalibrate the GST rate keeping in mind the ground reality and ensure that they are brought in the lower tax bracket.
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