Congratulating the Finance Minister on her maiden Budget, Mr. Rajan Wadhera, President, SIAM has said that the automotive industry is happy that the Finance Minister has extended wholehearted support to electric mobility, but this will not help the automotive industry in emerging from the current steep slowdown it is facing today.
We warmly welcome the various additional measures announced to promote EVs like reducing the GST to 5%, exemption in customs duty on EV parts and specially the Income Tax deduction on the interest component paid for loans taken for purchasing EVs. All these were recommendations given by SIAM and we are grateful to the FM for having accepted them. These measures will certainly help in making EVs more affordable and attractive to the consumers, which is in line with the recommendations made in the Economic Survey.
However, the auto industry is currently going through a very difficult time and the industry was expecting some form of a stimulus package in the Budget in line with what had been done by Government during the previous two similar slowdowns. It is disappointing that the FM has not recognized the distress in the auto sector and not come out with any kind of support or stimulus, said Mr. Wadhera. However, the initiatives for improving liquidity in the market by capital infusion in the Banks should help the industry to some extent.
Furthermore, the industry had expected that a voluntary scrappage policy would be announced which did not happen. There was also no announcement of extension of the 200% weighted deduction for R&D expenses.
In fact, increasing the duties on auto parts and putting an additional cess on petrol and diesel could drive up costs of vehicles, specially where volumes are low and localization in not viable and the overall cost of operations of transport which could further aggravate the slowdown in the industry, cautioned Mr. Wadhera.
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