Budget 2018: The automotive industry has lined up a number of issues to be looked into by the finance minister in the Budget. The issues include cut in GST rates on electric vehicles, incentives to companies to invest in R&D of EVs, subsidies on battery and lithium imports.
Budget 2018: The automotive industry has lined up a number of issues to be looked into by the finance minister in the Budget. The issues include cut in GST rates on electric vehicles, incentives to companies to invest in R&D of EVs, subsidies on battery and lithium imports, rural development to push tractor and two-wheeler sales, lowering of taxes, duty-free imports of natural rubber to arrest spiralling costs and further increase in customs duty on tyre imports, among others. While hailing GST, which significantly improved the logistics movement in India, the industry expects that there will be a substantial funds allocation for the development of infrastructure for EV under the Faster Adoption of Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, given the huge focus of the government. There should also be a tax-friendly regime and subsidiaries given to EV makers for smooth adoption. Allocation of funds to skill development centres will also benefit the industry, said sector experts.
According to Pankaj M Munjal, chairman and managing director, Hero Cycles, “Being the first after the GST roll-out and the second one after demonetisation, the ensuing Budget needs to focus on incentives to companies to invest in R&D of EVs and its charging infrastructure and tax holidays for EV manufacturers. We also hope that the government rewards people using clean mobility transport options with measures such as fiscal benefits and tax breaks.” Suresh KV, country head of ZF India, an auto components maker, said the focus on safety will enable India to cut accident rates and help the automotive industry achieve the Vision Zero goal of zero accidents. The industry urges the government to subsidise battery and lithium imports or incentivise companies to set up this business in India.
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The support infrastructure — charging infra and robust smart electricity grid to take the additional load — also needs to be in place, he said. Jeetender Sharma, MD, Okinawa Scooters, an e-scooter maker, said, “The EV segment today is at a point of inflexion and there is need to take a collective approach from all the industry stakeholders to ensure this vertical drives up to the next stage of growth. The Budget will be closely watched by the industry as it will determine the Centre’s will to see this sector reach the highs that it has been speaking of translate into action.”