Now that the Budget 2018 is finally tabled by Finance Minister of India, Arun Jaitley, it is safe to say that the last full budget by the BJP led government ahead of the 2019 General Elections didn’t bring anything special to the automobile industry. While there were huge expectations from the budget, ranging from ease in GST to relaxation for electric vehicles, there was no mention of the auto industry as such by Arun Jaitley in his whole speech. However, the new budget will surely impact the auto industry as some indirect factors will come into play. We have jotted down the missed expectations, indirect factors affecting auto industry and some quotes from the industry post budget.Also Read: Pre Budget Expectations From Auto Industry!What the Budget 2018 Missed?
There was a huge demand from automakers to allocate more funds under the FAME (Faster Adoption and Manufacturing of Electric and Hybrid Vehicles) scheme. However, Mr. Jaitley failed to address the same in his budget speech. Neither there was any mention for the relaxation in taxes on electric vehicles.
The only thing we were expecting from the budget was rationalization of GST rate i.e. currently 12% for EVs and 28% for EV batteries. Also, we had requested that GST should be made at least either 0 or 5% for initial years. But we didn’t find any mention of the same. Perhaps it will be covered in the policy, later. Overall we are happy with the outcome of the budget."Positive Outcome from the Budget 2018
As mentioned above, there was no specific mention of the automotive sector in his speech, however, Mr Jaitley did talk about the reduction in the corporate tax. The tax has been reduced to 25% for companies with a turnover of 250 crores and above. Since most of the auto companies play in a bracket over this figure, they will benefit from the tax cut. Whether or not these benefits will be passed on to the buyers, will be a thing to see in the future.
Mr Parveen Kharb, Co-Founder, Twenty two Motors said, "We welcome the budget’s emphasis on businesses and startups and the overall mission of Make in India initiative. Government’s focus to strengthen the road rail connectivity will encourage investments from private and other streams in the auto sector which will provide boost to the overall economy. The announcement of Rs 50 trillion for road, rail, air, inland waterways development will fuel the infrastructure development- the growth driver of Indian economy"
Last is the excise duty cut of Rs 2 /litre on unbranded diesel and petrol as mentioned in the budget.
Congratulating the Union Finance Minister, Arun Jaitley, President ACMA, Nirmal Minda, said, “The Budget unveiled by Hon’ble Finance Minister is indeed inclusive and pro-manufacturing. The component sector is delighted that the duty on select items such as engine & transmission parts, brakes and parts thereof, suspension and parts thereof, gear boxes and parts thereof, airbags etc. have been enhanced from 7.5/10% to 15%. These items account for more than 50% of USD 43.5 billion domestic component industry’s turnover and over 30% of its USD 11 billion exports. The industry is extremely competitive in these areas and this measure will not only encourage investments but also encourage technology development in these areas."
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