The Interim Budget 2024-25 was announced by Finance Minister Nirmala Sitharaman today, while there were no clear specifics announced for the automotive industry, stakeholders see subtle hints towards green mobility.
Here is what captains of India Auto Inc had think about the Budget 2024 –
Vinod Aggarwal, President-SIAM: “The announcement on strengthening the Electric Vehicle ecosystem by supporting manufacturing and charging infrastructure, will boost the development and adoption of EVs in the country. The encouragement of Payment Security Mechanism for adoption of e-buses for public transport networks is also a welcome step.”
Dr. Pawan Munjal, Executive Chairman, Hero MotoCorp: “The emphasis on ‘Garib Kalyan, Nari Shakti, Yuva (youth empowerment), and Annadata (empowerment of farmers)’ by prioritising their needs and aspirations reflects a commitment to the holistic development of all, aligning with the government’s vision of “Sabka Saath Sabka Vikas”. Upholding fiscal discipline has consistently been the hallmark of this government, and this Budget reaffirms that commitment. Through these measures, the interim Budget takes a decisive stride towards realizing the vision of making India ‘Viksit Bharat’ by 2047 – the centennial year of our independence.”
Venkatram Mamillapalle, Country CEO & MD, Renault India Operations: “With the Interim Union Budget 2024 announcement completed, Renault India embraces the transformative vision outlined by Finance Minister Nirmala Sitharaman, steering towards a ‘Viksit Bharat’ by 2047. The promise of expanded manufacturing and charging infrastructure aligns seamlessly with the commitment to delivering innovative, eco-friendly solutions. Moreover, the emphasis on e-buses for public transport, echoes aspirations for fostering a greener, more sustainable future.”
Nirmal K Minda, Chairman & MD, Uno Minda: “This budget supports the ecosystem of electric vehicles and the necessity of the development of a greener, more sustainable automotive industry. The focus on promoting entrepreneurial opportunities for numerous vendors in the supply and installation of EV charging infrastructure is a pivotal step towards building a resilient ecosystem. The government acknowledges that the employment opportunities for Indian youth with technical skills in the manufacturing, installation, and maintenance of electric vehicles are noteworthy.”
Prashanth Doreswamy, President and CEO, Continental India: “The emphasis on EV adoption and energy transition is on par with the global trends and gives an edge and a push to companies to invest in sustainable mobility, the need of the hour. The Skill India Mission is another positive and collaboration with such government initiatives will ensure a better and more skilled workforce that meets the evolving demands of the automotive technology sector. One more positive for sustainability is the embracing of bio-manufacturing. It will provide opportunities for companies to innovate and contribute to a greener growth trajectory. Proactive adaptation and monitoring of the policy developments in the coming months will help companies remain competitive and relevant, while ensuring growth.”
Sunjay J Kapur, Chairman of Sona Comstar and Chairman of CII Europe Committee: “The Union Budget 2024 builds on India’s proactive approach towards transformative growth, especially fostering collaboration and innovation across manufacturing, infrastructure, and technology sectors. With a focus on skill-building and concerted efforts to drive research and development, India aims to catalyse innovative solutions, utilising new technologies and data to fuel growth, particularly in emerging sectors. With a significant increment in capital expenditure target for FY2025, the budget emphasises on the enhancement of infrastructure for multi-modal connectivity, in addition, it promises a sustainable and efficient mobility ecosystem. Notably, the budget supports the expansion of electric mobility by boosting EV manufacturing and charging infrastructure and promoting e-buses, aligning with global decarbonisation efforts. It will provide impetus to make electric vehicles more accessible to the people of India.”
Sandeep Dutta, Senior MD and Lead – India Business, Accenture: “The focus on research and development and new age technologies has the potential to not just accelerate our economic growth but also create new opportunities for talent from India at a global level. Also, the commitment towards net-zero emissions with a focus on solar electricity and e-vehicle ecosystem will catalyse our advances towards sustainable and inclusive development.”
Shamsher Dewan, SVP & Group Head – Corporate Ratings, ICRA: “The government’s focus on supporting agri-related cash flows through rural infrastructure development and improved allocation for farmer welfare schemes continued in the Union Budget. The enhanced outlay for agriculture and allied activities are likely to support rural demand, a critical driver for the automotive sector. Additionally, the disbursement of funds under PLI schemes (enhanced budgeted outlays for both Automobiles/components as well as advanced chemistry cell battery storage) would support cash flows and credit metrics for the automotive OEMs and ancillaries. With enhanced outlays, PLI scheme aims at fast tracking investments in technology and will also increase localisation of auto components, accelerate investments towards a local EV ecosystem.”
“The government’s thrust on development of the electric vehicle (EV) ecosystem continues, with enhanced focus on improving the charging infrastructure, which is expected to help reduce range anxiety and promote EV adoption. The continuation of FAME II subsidies post-March 2024 (allocation of Rs. 2,670 crore for FY2024-25) is also likely to support adoption and raises hopes of continuation of subsidy support going forward. The budgeted FAME II outlay for FY2025 represents the residual allocation under the scheme, which forms part of the Rs. 10,000 crore initial allocation; timely rollout of new subsidy scheme remains key in accelerating electrification transition. In addition, the Government’s efforts to address payment security for electric bus fleet operators will support faster deployment of electric buses.”
Gautam Shahi, Director, CRISIL Ratings: “Policy measures announced in the budget such as setting up of a payment security mechanism and emphasis on increasing support to the manufacturing of charging infrastructure are steps in the right directions for improving the adoption of e-buses for public transport networks. CRISIL Ratings’ expects penetration of electric buses to double to around 8% by fiscal 2025, from approximately 4% in fiscal 2023.”
Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles (SMEV): “The 2024-2025 Interim Union Budget emphasizes a green public transportation system, prioritising a strong charging infrastructure for widespread adoption of electric vehicles. India’s vast expanse requires a comprehensive network with thousands of installations. This commitment is poised to spur employment growth, benefiting startups and MSMEs, with ongoing service and maintenance creating additional job opportunities.”
“However, a noticeable gap in the budget is the absence of continued direct customer subsidies, a critical element that played a substantial role in driving the adoption of electric vehicles across various categories over the last two years. We eagerly await the government’s comprehensive strategy and commitment to sustaining the electric vehicle manufacturing ecosystem. It is anticipated that a combination of fiscal and non-fiscal interventions will be outlined, offering crucial support for the industry in the coming years until it achieves a threshold for self-sustained growth.”
Manish Bhatnagar, MD, SKF India: “The budget reflects a comprehensive vision for a ‘Viksit Bharat’ and lays a strong foundation for sustained growth. The strong focus on electric mobility, underscored by the robust expansion of the electric vehicle ecosystem. The introduction of innovative schemes like bio-manufacturing and bio-foundry reflects a positive stride towards green growth and environment-friendly alternatives in the manufacturing sector. The emphasis on inclusive development, social justice, and economic empowerment aligns with the ethos of ‘Sabka Saath, Sabka Vikas.’ At SKF India, we welcome this move and look forward to contributing to the nation’s progress and leveraging the opportunities presented by these strategic initiatives.”
Anand Bang, COO – Sales & Marketing, Tata Motors Finance: In this interim budget, the Government has distinctly outlined its intent and vision for a ‘Viksit Bharat,’ reaffirming a resolute commitment to continue giving momentum to Infrastructure Capex, adding to the consequent growth and demand within the commercial vehicle ecosystem. A Substantial emphasis has been placed towards fortifying the logistics sector through multi-modal development and connectivity interventions, notably exemplified by the Gati Shakti initiative. We foresee immense opportunities for NBFCs to emerge as growth catalysts, facilitating last-mile credit access and bespoke financial solutions for transporters and logistics players to meet their CV fleet expansion and upgradation requirements driven by India’s robust infra push.”
Kamal Bali, President & MD – Volvo Group in India: “The interim budget by the FM continued with upholding India’s impetus on inclusive and sustainable growth, backed by responsible and efficient governance. It was a pleasant surprise to see aggressive fiscal deficit goals and stable macroeconomic performance, while furthering capex on physical infrastructure as well as DPI. The Rs 1 lakh crore support to technology & innovation is a very thoughtful and a compelling idea that will propel India on course to Viksit Bharat. Likewise is the focus on farm sector and MSMEs. Overall, an outstanding interim budget.”
Satyakam Arya, MD & CEO, Daimler India Commercial Vehicles: “The most prominent takeaway for me was the capital expenditure outlay of Rs 11.1 trillion towards infrastructure development. I would consider this generous allocation to be indicative of a boom for the commercial vehicles industry in the near term. The Indian CV industry is already on an upward trajectory and this CAPEX outlay has the potential to take CV industry volumes higher in the coming 3-5 years, than the previous benchmark. While the interim budget sets the tone, I am keenly looking forward to the post-election budget that should encompass a strategy that refines the Indian economy in the next 5 years, thereby encouraging new investments, boosting employment and providing new business opportunities to various industries. What is also important is a definitive direction on the implementation of the Scrappage Policy, a long-term fuel policy for Indian passenger and commercial vehicle industries, charging infrastructure that will pace up the surge of EVs in the country, FAME-III and manufacturing-boosting incentives (PLI), favourable taxation on green vehicles and steps for ease of doing business, to mention a few – these will have a far-reaching effect on the health of the manufacturing industry as we tread on a path that will lead us to realising the dream of Viksit Bharat in 2047.”
Prasan Firodia, MD, Force Motors: “It is heartening to note the balanced and growth-oriented Interim Budget for the fiscal year 2024-25. The budget focuses on boosting capital expenditure to strengthen the nation’s infrastructure, creating a conducive ecosystem that fosters innovation and entrepreneurship and laying the groundwork for transformative progress in various sectors.”
Swapnesh R Maru, Deputy MD – Corporate Planning, Finance & Administration and Manufacturing, Toyota Kirloskar Motor: “From an auto industry perspective, the government has allocated significant resources to strengthen the green energy sector towards realising nation’s ambitious net-zero target by 2070. Financial support for biomanufacturing and bio-foundry will stimulate green growth and modern innovations playing a pivotal role in fostering a circular economy that benefits agricultural income. The measures towards expansion and strengthening of the EV ecosystem to support manufacturing and charging infrastructure will act as a catalyst for an era that will encourage alternate, cleaner and efficient powertrains on roads.”
Neel Chheda, Senior Executive VP & Head – Auto & Actuarial Analytics, Tata AIG General Insurance: “The interim budget of 2024-25 unveils a visionary initiative to enhance EV ecosystem. By bolstering manufacturing capabilities and charging infrastructure, it aims to drive the adoption of clean and efficient transportation. We can aspire to create an ecosystem that not only benefits the environment but also propels our nation to the forefront of global leadership in sustainable energy. We expect more collaborations with the EV industry enabling solutions that cater to the evolving needs of the e-mobility landscape.”
Sudarshan Venu, MD, TVS Motor Company: “The emphasis on homes for the middle class and expansion of women self-help groups shows the government is committed to development across the board, even as it encourages investment in sunrise sectors and technology. For the automobile sector in particular, the continued infrastructure spending with the push to develop the EV ecosystem is exactly what the industry needs.”
Arnab Banerjee, MD & CEO, Ceat: “In the landscape of Budget 2024, the government’s strategic focus on mobility is indeed promising. The thrust on sustainable mobility, particularly the support for electric vehicles (EVs) and charging infrastructure, aligns seamlessly with the industry’s commitment to innovation and environmentally conscious solutions. The proposal to enhance the EV ecosystem not only accelerates the adoption of green mobility but also opens up avenues for contributing with cutting-edge technologies tailored for electric vehicles. Moreover, the heightened emphasis on infrastructure development is a significant stride. This aligns with the vision to be a key enabler in the transportation ecosystem. The commitment to reducing logistics costs will have a positive ripple effect on the entire supply chain, benefitting the industry at large. In essence, Budget 2024 paints a canvas of transformative opportunities. We are poised to ride the wave, contributing to a future where mobility is sustainable, and infrastructure is the backbone of progress.”
Narinder Mittal, Country Manager & MD – Agriculture Business, CNH India & SAARC: “The Interim Budget has reinforced the upliftment of farmers with the continuation of PM Kisan Samman Yojana, which annually extends direct financial assistance to a substantial 11.8 crore farmers. Moreover, the allocation of financial assistance to support the procurement of biomass aggregation is a commendable move. Encouraging farmers to participate in the bioenergy supply chain not only promotes sustainable agricultural waste management but also opens up new opportunities for income generation. This will catalyse the demand for cutting-edge farm machinery and crop management solutions, facilitating the adoption of modern farming practices powered by cutting-edge technologies. The decision to further promote private and public investment in post-harvest activities will help the agricultural ecosystem in India to flourish, encompassing every stage of the value chain, from production to market.”
Shalabh Chaturvedi, MD, CASE Construction Equipment, India & SAARC: “With the decision to increase Capex by around 11% to Rs 11 lakh crore, representing 3.4% of the GDP, for the fourth consecutive year, the government is reinforcing their focus on sustainable long term growth, enhancing the nation’s infrastructural backbone.”
Priya Hardikar, CFO, KPIT: “Budget 2024 reflects measures to empower our journey towards ‘Vikshit Bharat’ by 2047; be it with the estimates on reducing the fiscal deficit to 5.1% of the GDP or FM’s commitment of Rs 11.1 lakh crore towards comprehensive infrastructure development. The Rs 1 crore corpus, reinstates the country’s R&D potential, the next progression frontier. It shows the leap that the country is taking across several sunrise sectors. We also commend the government’s green growth vision. Furthering biomanufacturing, EV infrastructure, and encouragement of greater adoption of e-buses are all steps critical to reaching the country’s 2070 net zero ambitions. All in all, this budget strategically supports the country’s long-term vision.”
Anshuman Singhania, Chairman Automotive Tyre Manufacturers Association (ATMA): “We welcome the continued push for infrastructure and increase in capex in the Union Budget which will have a positive spinoff for the tyre Industry. The balanced approach adopted by the government is appreciable which will foster growth and innovation. Government’s continued focus on infrastructure and logistics is a highly welcome step from the point of view of the tyre industry. A robust road infrastructure is crucial for the industry as it facilitates efficient movement of goods and people, thereby driving demand for tyres. As the tyre industry moves on the path of sustainability, the incentives aimed at promoting research and development in sustainable materials and manufacturing processes would be highly beneficial to the industry. With sustainability becoming a priority, investing in innovative and eco-friendly practices will not only enhance our competitiveness but also contribute to a greener future. To this end, government’s avowed focus on promoting electric vehicles through incentives is a positive for the tyre industry which is already engaged in R&D for developing fuel efficient tyres with low rolling resistance.”