"Increased thrust of infrastructure development across the country, including North East and in rural areas is likely to increase vehicle ownership in those regions," Abdul Majeed, Partner Price Waterhouse, also an auto expert, said.
The government seems to have adopted a balance approach in its first budget as far as the auto industry is concerned, he said, adding "As expected there were no big policy announcements in the automotive sector."
The excise duty benefits announced in the interim budget earlier this year had already been extended until December 31, and any further extension or change in those duties will all depend on the demand in the automotive sector in the next months, he said.
In addition, amendment to Apprenticeship Act, SMEs (small and medium enterprise) Skill India programme for MSMEs (micro, small and medium enterprise) are some positive measures for the auto component companies, majority of which belong to these two categories, he added.
General Motors India President & Managing Director Arvind Saxena termed the budget as "a reform-oriented budget", as it focuses on infrastructural development, education, skill development, agriculture, irrigation, healthcare, among others.
"As far as the automotive industry is concerned, the focus on rural roads, highways and expressways are welcome decisions. Some of the other announcements made by the Finance Minister on the taxation front are also positive steps. These proposals and announcements, if implemented effectively, should have a positive impact on industry," he said.
Given the condition of the economy, the direction given in the budget is a positive one and the call for fiscal prudence is a welcome move, Saxena said.
Commercial vehicle maker Asia Motor Works president A Ramasubramanian said measures announced in the budget for the infra sector are welcome and will contribute to demand generation for commercial vehicles, which have seen record lows in recent years.
"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," Audi India head Joe King said in his budget reaction.
Federation of Automobile Dealers Association (FADA) president Mohan Himatsingka said, a number of proposals in the budget will promote the growth of economy, including auto sector.
"Renewed thrust on infrastructure sector, particularly significant outlay for road infrastructure development, divestment of banks, and definite timeline for GST rollout are some of the positive highlights of the Budget," he said in a statement.
FADA was expecting higher rates of depreciation, especially in the case of commercial vehicles that have been reeling under acute slowdown for about three years now, he said.
It also anticipated a raise in the depreciation rates in the case of passenger vehicles in tune with the market reality and to spur demand.