The Ministry of Finance has all geared-up today to present the Union Budget 2017 in India. Automotive enthusiasts, auto industry experts and consumers in general are waiting for the Auto Budget 2017 with bated breath. The budget 2017 is of utmost importance for the Indian auto industry as the industry expects the government to rollout the implementation of GST, provide subsidy and lower excise duties for electric and hybrid vehicles and lower the interest rates on auto loans for rural customers while the auto industry also expects the government to cut down excise duties on overall commercial and passenger vehicle taxes. Also Read: Auto Budget 2017: Electric and Hybrid Vehicle industry may boost from Union Budget
The Indian automotive industry accounts to 23.9 mn units of vehicles according to SIAM, which includes vehicles like passenger vehicles, two-wheelers, commercial vehicles and three-wheelers. On the other hand, the auto industry provides direct and indirect employment to over 29 mn people in India according to SIAM, while the industry contributes to 7.1% of India’s GDP. Here are the expectations of the Indian automotive industry from the Auto Budget 2017. Read More: Auto Budget 2017: How GST could benefit the India automotive industry
Excise Duty – The auto industry is plagued by various levels of taxes, which has a cascading effect on the overall cost of the vehicle. The industry expects the government to lower the excise duty taxes on vehicles, thereby bringing in a uniform cost structure. This will result in lower vehicle costs, which will help the industry to grow in a better way.
GST – The industry expects the government to soon implement GST, which is proposed to come into effect from July 1, 2017. The implementation of GST will rationalise the tax structure for the automobile industry, while it will subsume multiple taxes and levies. Read More: Auto Budget 2017: Union budget changes that could benefit the used car sector
Old Vehicle Scrappage – The Indian automotive industry expects the government to implement a strong scrappage policy for vehicles which are above 10 years old. A strong scrappage policy with healthy incentives will help the industry and can be a game-changer in India. However, the policy should be carefully evaluated befor implementing it in the industry.
Lower Interest Rates – The industry expects the government to lower the interest rates on auto loans for passenger as well as commercial vehicles. The government should focus on boosting rural sales of vehicles. This will not only help the industry, but will also provide direct employment in rural areas. Read More: Budget 2017: Road sector needs higher allocation to boost construction and complete pending projects
Hybrid & Electric Vehicles – Car and bike manufacturers in India expects the government to imply lower taxes on hybrids, mild-hybrids and electric vehicles. Under the FAME scheme of the central government, quite a few companies have come forward to introduce their range of hybrid and electric vehicles. The industry still expects greater benefits for the segment to grow in India.
Infra Road Development – The industry expects larger allocation of funds for the development of infrastructure and roads, which will help the auto industry to grow in a better way. Also Read: Budget 2017: Govt to consider raise in income tax exemption limits
Speaking about the proposed Auto Budget 2017, Mr. YK Koo, MD & CEO, Hyundai Motor India, said, The automobile Industry has been facing multiple challenges and is adversely impacted, resulting lower customer sentiment. To steer the growth, we are looking forward to positive initiatives on ease of doing business from Union Budget 2017-18. Reduction in excise duty rates towards timely GST mplementation along with lower corporate and income tax will benefit the industry. The new uniform tax structure will create a robust business environment and help the industry to positively contribute for National GDP.”
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