The Society of Indian Automobile Manufacturers (SIAM) has welcomed the budget, calling it 'forward looking' and addressing both the social sector as well as the industry in an 'inclusive fashion'.
Concessional customs and excise duties on select parts used in the manufacturing of electric andamp; hybrid vehicles have been extended for a year, which is a positive move, said Vikram Kirloskar, President, SIAM.
SIAM is particularly grateful to the Finance Minister for having accorded approval to the Scheme on Faster Adoption of Electric and Electric Mobility (FAME), he added.
Although the initial allocation of Rs. 75 crores is very modest, industry hopes that over the next a few months, more resources would be allocated for promoting this new and green technology area, which can be a game-changer for the automotive industry.
SIAM had earlier requested for a rise in the customs duty on commercial vehicles from 10% to 40%. The effective rates have been increased to 20% which is a welcome change. The reduction in excise duty on the chassis of ambulances from 24% to 12.5% is also a positive step.
The budget has focused on the overall development of the society and has brought in several reforms to ensure an improvement in the consumer sentiment as well as disposal incomes which shall benefit the automobile industry. A re-affirmation of the date of implementation of GST from April 2016 shall help the manufacturers develop more concrete long term plans on the products and investments. The reduction in the corporate tax from 30% to 25% over the next 4 years lays down a clear roadmap which removes the uncertainties for industry.
The budget lays huge emphasis on development of the infrastructure throughout the country and shall boost the prospects of a wide range of industries including the automobile particularly the commercial vehicles industry. A strong focus on the rural development including substantial allocation under MNREGA would also ensure improved demand from the non-urban centers which benefit the auto industry.
Kirloskar said that in the forthcoming budgets he would expect emphasis on renewal of the fleets through fiscal incentives. Fleet renewal would help both the industry and the society in terms of the environment, health etc, he added.
Excise duty has been rationalized and increased to 12.5% after subsuming the education and higher education cess. He said that the industry would have liked to do away with the NCCD which too can be looked into in the next budget.
Overall the budget looks to bring in systemic changes which are important in the overall second generation reform process. The Budget shall also provide more purchasing power in the hands of the consumers through various measures by different development schemes. This shall help the overall market scenario and boost consumer demand, he added.
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