The Budget 2024 is expected will be announced next month, and the automotive industry is keenly pinning its hopes on the Finance Minister to announce a slew of policies to drive Make-in-India for the world and support the automotive ecosystem.
Prashanth Doreswamy, President and CEO, Continental India: “The industry is keenly anticipating some favourable announcements in the upcoming budget. In my opinion, there are a few crucial areas that need to be covered to maintain consistency in the industry’s progress. Focus on local manufacturing continues to be an integral part of economic contribution. In the last few years, there were substantial announcements made, starting from Make in India, PLI Scheme, National Logistics Policy, and within the vision of Aatmanirbhar Bharat semiconductor manufacturing and R&D became the key focus areas. The industry will greatly benefit from a balanced approach that promotes domestic innovation and global collaboration to enhance local manufacturing.”
Furthermore, he states that the cost of commodities went through fluctuations which also impacted the automotive sector. The industry is keenly awaiting an announcement on import duty relief which will have a positive impact on the raw material costs thus helping to stabilise the cost of commodities. This will in turn help in boosting growth and competitiveness in the automotive industry, especially the export market. Even with the focus on localisation, there is a need for fair competition while safeguarding domestic interests. Streamlining import processes and reducing bureaucratic hurdles in India can attract foreign investments and enable the smooth flow of technology. A nuanced policy that boosts local manufacturing but does not unduly burden the segments of the automotive industry that are import-dependent is necessary.
“This will further drive a better Ease of Doing Business ranking. India’s rank in the index has been improving rapidly. As a result, many top global players are setting up their manufacturing and R&D centres in the country. Considering the market, direct incentives may not be feasible at present due to the larger economic scenario. The government can introduce a comprehensive policy framework that fosters a conducive business environment and encourages R&D investments while driving sustainable innovation.”
“Any budgetary allocations towards skill development will also be a welcome step. Education and training that align with the growing needs of the sector will be a boon to overall industry growth. Thus, contributing to the economy. In summary, local manufacturing, favourable import policies, and continued focus on skilling will be the primary factors in making the budget successful.”
Anurag Garg, MD & Country Head, Vitesco Technologies: “I am optimistic about the potential growth of the electric vehicle (EV) market in India, despite the current economic slowdown. The government’s commitment to promoting electric mobility is evident through initiatives like the FAME scheme, which plays a pivotal role in fostering sustainable growth by providing subsidies for EV purchases. As we eagerly await the budget 2024, we propose an extension of the FAME II scheme for the coming years. This strategic decision would further incentivise the adoption of electric vehicles and contribute significantly to the nation’s environmental goals. We encourage the government to focus on formulating policies that not only support existing players but also foster an environment conducive to new entrants. I believe that the upcoming budget presents a unique opportunity to propel the electric vehicle sector forward. By extending and enhancing policies that support the industry, the government can accelerate the adoption of electric vehicles, stimulate economic growth, and establish India as a leading player in the global electric mobility landscape.”
R K Misra, Co-Founder & President – Ecosystem Partnerships, Yulu: ” believes that the finalisation and launch of a National Battery Swapping Policy – that provides clarity on incentives, taxation, certifications and network expansion – is key to boosting investors’ confidence. Second, we request GST reduction (to 5%) on the li-on battery packs used by BaaS operators, to bring it on a par with the tax on battery-fitted EVs. Third, we also advocate reducing GST on EV charging and battery-swapping transactions from 18% to 5%. This will benefit price-sensitive retail customers and aid the growth and adoption of institutional set-ups for charging and battery management.”
Nikhil Agarwal, President, CJ Darcl Logistics: “The antecedent budget’s focus on infrastructure augmentation and regulatory simplification, particularly in the realms of thoroughfares and storage facilities, laid a resilient groundwork for industry expansion. Peering into the future, we anticipate sustained backing in technology-driven solutions, prowess amplification, and incentivisation frameworks.”
He further added, “Envisaging a foresighted budget, we picture all-encompassing policies around adoption of EV’s, Alternate fuels and other sustainable practices linked strategic incentivisation. Furthermore, we eagerly await an elaboration on initiatives akin to the National Logistics Policy, holding the potential to act as a linchpin in rationalising supply chains, nurturing ingenuity, amplifying interconnectivity, and embracing sustainability. These measures will fortify the trajectory for robust economic expansion in the logistics domain.”
Mayank Gupta CFO of CarDekho Group: “Looking ahead to the 2024 budget, I believe it could play a pivotal role in enhancing tourism mobility infrastructure The government can consider addressing GST anomalies in self-drive cars, contemplating a personal tax rate cap of 30% through surcharge reductions, and extending long-term capital gains benefits to Employee Stock Ownership Plans (ESOPs). Furthermore, incentivising Environmental, Social, and Governance (ESG) initiatives through tax benefits can potentially contribute towards achieving net-zero commitments and fostering a more diverse and inclusive societal landscape.”
Suyash Gupta, Director General, Indian Auto LPG Coalition: “Since alternative fuel such as auto LPG is the 3rd most used automotive fuel globally; it is a low-hanging fruit to reduce running costs and improve air quality. The Budget (2024-25) should effectively encourage OEMs to introduce LPG vehicles at affordable prices, thereby stimulating customer demand and speedier adoption of the same. This move will have a two-fold benefit – it will not only diversify the fuel and technology options for the public but also enhance the government’s alternatives for public mobility fuel availability. GST reduction on Auto LPG and conversion kits, as well as a relaxation of approval norms for the latter, bears consideration in the budget for 2024-25. Addressing pollution by incentivising petrol and diesel vehicles’ conversion to auto LPG, 60% of whose production is obtained from natural gas, could prove to be a game changer. These measures will stimulate the retrofitment market.”
