2021 Budget: Electric two-wheeler makers react, welcome extended tax holiday for startups

Union Budget 2021 India: 'The thrust on automobile sustainability by introducing voluntary scrappage policy will progress the auto sector significantly and curb pollution issues and soaring crude oil bills.'

By:Updated: Feb 01, 2021 6:33 PM

Union Budget 2021-22: Announcing details of the 2021 Budget on Monday morning, Finance Minister Nirmala Sitharaman stated that the government will introduce a new vehicle scrapping policy and focus on infrastructure as well. Along with this, the startup industry was relieved at the announcement of one additional year of tax holiday. Several of the electric two-wheelers currently on sale in India are products of EV startups. Many have welcomed the announcements in the Budget for FY22. The Society of Manufacturers of Electric Vehicles (SMEV) has stated that it hopes the vehicle scrapping policy but would be designed in such a way that would automatically push the adoption of electric vehicles.

Sohinder gill, Director General, Society of Manufacturers of Electric Vehicles:

“We thank the Hon’ble Finance Minister for announcing the Scrappage policy, which would help in encouraging the adoption of greener vehicles. Though we are awaiting more details on the policy but hope that it would be designed in such a way that would automatically push the adoption of electric vehicles.

For Clean Air, setting aside an amount of `2,217 crores for 42 urban centres with a million-plus population is a good move. The fund could be utilized to spread awareness about the benefits of using e-vehicles to the environment and its contribution to make the air clean.

The government’s plan for strengthening the public transport sector under PPP models with an outlay of Rs 18000 crores for operating 20000 buses is encouraging for the EV industry. The scheme could strengthen the EV industry if more e-buses could be supported through the scheme. We urge the government to mandate procurement of E-Buses under the scheme which would help us fight the issue of air pollution.”

Tarun Mehta, Co-founder & CEO, Ather Energy:

“The voluntary vehicle scrappage policy announced to phase out old and unfit vehicles will encourage the sales of new vehicles. It is good to see that the government is looking at addressing the concerns regarding GST inverted duty structure. We look forward to more details on the inverted duty structure and the Production-linked incentive (PLI) scheme announced by the Finance Minister.”

Saurav Kumar, Founder and CEO, Euler Motors:

“This year’s budget is a directional push to move towards clean energy and transition towards a green economy. The outlays to tackle air pollution and boost to non-conventional energy sectors will be key to reduce dependence on fossil fuels and power the industrial sector and electric transportation. The announcement of the Hydrogen Energy Mission is a step closer for generating power through green sources and fulfil charging requirements of EVs in the future.”

Deepak MV, Co-founder & CEO, Etrio:

“For the EV industry, it’s been a bit of disappointment with no direct mention of any EV focussed initiative or policy including FAME. There were a lot of expectations from the budget including ramping up of charging infrastructure, enablement of retail financing for EVs, and moderation of the inverted GST tax structure with lowering taxes on EV input components including battery.”

Ankit Kumar,CEO, GoZero Mobility:

“The Voluntary Vehicle Scrapping Policy would incentivise owners of old vehicles, which are usually the ones that fit the bill, to voluntarily give up their vehicle for scrap and look towards newer vehicles and more innovative mobility solutions. This policy would definitely push the EV industry more into the limelight as the public now has more reason to evaluate the economic feasibility of EVs and e-micro mobility options like e-bikes.”

Yogesh Bhatia, Founder, Detel:

“The thrust on automobile sustainability by introducing voluntary scrappage policy will progress the auto sector significantly and curb pollution issues and soaring crude oil bills. This announcement will replace the 15-20 years old pollution causing vehicles and generate massive demand for e-vehicles in the market. We welcome the Indian government’s move on long awaited scrappage policy and focus on better road infrastructure. We eagerly await for more details by the government.”

Dr Irfan Khan, Founder and CEO of eBikeGo:

“Setting aside an amount of Rs 2,217 crores for 42 urban centres with a million-plus population is a good move. The fund could be utilized to spread awareness about the benefits of using e-vehicles to the environment and its contribution to make the air clean. The government’s plan for strengthening the public transport sector under PPP models with an outlay of Rs 18000 crores for operating 20000 buses is encouraging for the EV industry. This scheme will boost the auto sector and provide jobs for our youth.”

Suhas Rajkumar, Founder, Simple Energy:

“The auto and EV industry welcomes the Union Budget 2021. The voluntary vehicle scrapping policy for CV and PV is a great move by the Government. It will push the mindset of people to adapt to cleaner commute and open the market for brand new vehicle infusions which can be EV and help the manufacturing industry to grow. It will also help in promoting fuel-efficient vehicles and reduce overall pollution in cities.”

Also read: Union Budget 2021-22 | New Vehicle Scrappage Policy: Indian Auto Industry reactions

Bunisha Khajamohideen, Co-Founder, Terabite Ekarts:

“It’s good to know that our government supports the auto sector with its scrapping policy, which in turn helps people move towards green vehicles. Also, the announcement on tax incentives for start-ups is absolutely welcoming. Auto/EV startups that cater to masses like street vendors will provide more relief to the society at large, thus making them self-reliant, also contribute to Atmanirbhar Bharat initiative.”

Jeetender Sharma, Founder & Managing Director, Okinawa Autotech:

“The increase in customs duty on automobile parts will rightly encourage domestic manufacturing. We are thrilled to see the highest ever CAPEX of Rs 1.08 trn for the Ministry of Roads. Evidently, the budget comes with an increased focus on strengthening the infrastructure of the country, which is a welcome move. Furthermore, the commitment of Rs 1.97 lakh crore for PLI schemes covering 13 sectors, also comes as a cheer for the industry. All in all, the budget is definitely rewarding.”

Harsh Didwania, Co-Founder & Director, EeVe India said:

“The budget is a very forward-looking one – the focus on infrastructure & spending will boost the job market and build confidence in the industry It’s a step towards a robust economic reform agenda, the budget did not talk much on the automobile sector specifically on EV, Raising on custom duty will result in an increase in the cost of EV, Overall 2020 has ended up disappointing the EV sector.”

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