Indian Auto Industry Pins Hope on Budget To Boost Consumer Sentiment
The general expectation is for the government to take steps to increase disposable income and improve the overall economy.
Representative image. (Photo Credit: Reuters)
Hit hard by demonetisation, the auto industry is pinning hopes on the upcoming Budget to boost consumer sentiment and looking for concrete incentives to promote fleet modernisation as well as electric vehicles.
"Budget is something which we all are hoping that the government will bring measures to boost consumer sentiment," Society of Indian Automobile Manufacturers (SIAM) Director General Vishnu Mathur said.
The general expectation is for the government to take steps to increase disposable income and improve the overall economy, he said, adding that for the automobile industry the demand is for concrete policy on fleet modernisation, especially of commercial vehicles and passenger vehicles.
"We have also pointed out that the incentive scheme for electric mobility under the FAME scheme must be extended as most of the automobile companies have been working towards this direction," Mathur said. In order to promote eco-friendly vehicles, the government had formally launched the FAME India scheme in 2015 offering incentives on electric and hybrid vehicles of up to Rs 29,000 for bikes and Rs 1.38 lakh for cars. It envisaged Rs 795 crore support for the first two fiscals. Faster Adoption and Manufacturing of Hybrid and Electric vehicles in India (FAME India) is part of the National Electric Mobility Mission Plan.
On the taxation side, Mathur said it is unlikely that the GST will be implemented from April 1.
"However, we have been seeking the moderation of taxation for the automobile industry and reduction of slabs from the current four, ranging from 12-30 per cent, to two slabs," he said. SIAM had proposed a base rate for small cars and two-wheelers and another 8 per cent addition to that for larger cars, he added. Hit hard by weak consumer sentiment post demonetisation, monthly automobile sales growth rate in India slipped to a 16-year low in December with total vehicle sales declining by 18.66 percent.
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