Budget 2021 expectations (mobility & logistics): Tax incentives, EV adoption, National Logistics Policy

Union Budget 2021 Expectations | ‘With several Indian and international groups keen to invest in the EV segment, the government should focus on bolstering the infrastructure to enable easy manufacturing and usage of EVs’

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Union Budget 2021: The automotive industry is looking forward to this Budget for incentives and policies that would assist it to climb back to normalcy and better after having undergone an economic downturn, accentuated by the COVID-19 pandemic. A lot of focus is expected to land on electric vehicles which have now begun to form part of the mobility service sector as well. While logistics companies expect the government to bring the National Logistics Policy back in focus, subscription-based car rentals believe that tax incentives for the travel industry could help boost the sector. Here’s what the mobility services and logistics players in India expect from the Union Budget 2021-22.

Greg Moran, CEO and Co-Founder, Zoomcar:

“One of the key areas for both the government as well as the auto sector is electric mobility. With several Indian and international groups keen to invest in the EV segment, the government should focus on bolstering the infrastructure to enable easy manufacturing and usage of EVs and EV-related elements such as charging kiosks to boost demand.

“We look forward to more tax incentives for the travel and trade industry. We expect that this year’s Union Budget will focus more on tech-led developments in the Auto sector. It presents the perfect opportunity for the industry to capitalize on and boost growth.”

Sunil Gupta, MD & CEO, Avis India:

“As the world is moving towards greener and cleaner transit solutions, the mobility sector will be majorly driven by electric vehicles. The commercial vehicle segment including electrification of buses and fleet operators is set to be the fastest-growing market. This can be pushed further by promoting the creation of a robust and well-connected EV charging infrastructure on a pan-India level.

“Various policy-level initiatives, grants, and tax rebates are a few key factors that would strengthen India’s nascent EV as well as car rental markets. The government could further incentivize the adoption of electric vehicles while setting up EV battery capacity in the country.”

Anmol Jaggi, Co-Founder and CEO, BluSmart Mobility

“One way to excite the fleet industry to quickly turn electric could be to waive off tolls for EV fleets for one year. This would bring the cost of operations down for MaaS providers and empower them to also pass down some of those benefits to the customers as well, thereby helping the complete ecosystem adopt EVs sooner. Also, a reduction in the tax rate on EV charging-as-a-service will boost a lot more Charge Point Operators to set up shop and take the concern around not-enough-charging-stations away from a consumer’s mind to adopt EVs.”

Amit Gupta, CEO and Co-founder of Yulu:

“There is a need to create Footpaths & Non-Motorized Transport (NMT) Lanes within 5 Km of all current/future metro stations under the Metro Rail Policy. The need of the hour is to promote mobility as a service using EVs. We also recommend that incentives must be given for purchasing ‘low speed’ EVs as this will enable the sustained provision of affordable and environment-friendly transportation options for the masses.

“Overall, we recommend a national policy on parking infrastructure for shared mobility and a mechanism to unblock input credits which will lower the cost of operations. We also urge standardizing lithium-ion batteries to promote swapping infrastructure. Further, we suggest rationalizing GST rate on critical components of an EV like the battery or propose schemes to boost local production of batteries.”

Prasad Sreeram, Founder and CEO, COGOS Technologies:

“The Union Budget should provide the following support – (A) Subsidy/incentives for using EVs for Commercial/logistics purposes, (B) Incentives for supplies of essential/food products, and (C) Reduction in excise duty on diesel.”

Anand Ayyadurai, Co-founder and CEO, VOGO said:

“We believe the outlook of mobility sector will be majorly driven by electric vehicles as the world is moving towards greener and cleaner transit solutions. In order to drive this movement, we are hoping to see a reduction in GST on EV batteries from 18 % to 5% along with these subsidies on all Electric vehicles including low-speed Electric two-wheelers. This will not only support the manufacturers and service providers but will also reduce the overall cost of the vehicle for consumers.”

Gaurav Aggarwal, Founder & CEO, Savaari Car Rentals:

“The Tourism Ministry’s budgets have previously been slashed over the last few budgets to a meager Rs 1,500 crore. In order to spur domestic tourism and make India a world-class tourist destination, we expect that the budgetary allocation is at least increased by 50% in the upcoming budget.”

Also read: Budget 2021 expectations (EV industry): Charging infrastructure, localisation, financing & incentives

“The total expenditure on the Ministry of Road Transport and Highways for 2019-20 was around Rs 90,000 crore, growing at a healthy trend over the last 5 years. We would anticipate this to continue and hope that the allocation hit the Rs 1,00,000 crore mark in the upcoming budget.

Dhianu Das, Co-Founder, Luxury Ride:

Used luxury automobile market sees tier 2 and tier 3 cities driving the market in 2021. Hence, we expect the government to make GST less complicated and provide relaxation in GST for ULA dealers and garage owners, and relax the interest rate regime which will further boost demand.

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