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In a bid to boost the pandemic hit economy, through the multiple investment announcement in the financial and banking sector. Finance Minister Nirmala Sitharaman on Monday tabled the first paperless Union Budget for 2021-22 in the parliament.
Here are some reactions of experts from the automobile, and electric vehicles industry:
Sandeep Aggarwal, Founder & CEO Droom:
“Government extending the life of passenger vehicle and commercial vehicle by 5 years each is a good catalyst for the automobile industry. The vehicle is among the top 3 big-ticket items for any human being and larger economic life for it only means better ROI for the users. This also means the used automobile industry in India will be more robust in decades to come.
Government allocation of Rs. 18,000 crores for infrastructure will certainly boost the automobile industry. Also, India adopting global standards for scrapping vehicles will only create a more holistic ecosystem for the industry. No country has ever achieved economic freedom until it has fully democratized transportation and its reach. From the USA to Western Europe and China to Japan all have unleashed their economic growth due to the adaptability towards automobiles and world-class road infrastructure.”
Jeetender Sharma, Founder & Managing Director, Okinawa Autotech:
“The Budget 2021-22 effectively sets the roadmap for the next five years with a slew of measures for overall economic growth. We are glad to see the government’s continued focus on Atma Nirbhar Bharat and Make in India. The increase in customs duty on automobile parts will rightly encourage domestic manufacturing. We are thrilled to see the highest ever CAPEX of Rs. 1.08 trn for the Ministry of Roads. Evidently, the budget comes with an increased focus on strengthening the infrastructure of the country, which is a welcome move. Furthermore, the commitment of ₹1.97 lakh crore for PLI schemes covering 13 sectors, also comes as a cheer for the industry. All in all, the budget is definitely rewarding.
The pandemic has had an inevitable impact on the Auto industry and we were also expecting the government to look at reducing the GST and reconsider the current taxation framework applicable on raw material and the final product in case of EVs which could have provided the much-needed impetus to the industry. The government could have also looked at aggravating the domestic demand by further incentivizing individual and commercial consumption of EV pan India. Nevertheless, we are ever so optimistic and certain that this fiscal year will unfold immense growth opportunities and we are geared up for the same.”
Bhavish Aggarwal, Chairman & Group CEO of Ola:
“Ola welcomes a progressive & growth-oriented budget. Measures under Atma Nirbhar Mission will help create global champions in automobiles, financial services, and technology and foster an environment where India becomes integral to global supply chains. Increased investment in insurance & infrastructure will open new avenues of capital. Improvement in ease of business will transform India into a global innovation hub. We strongly support the government’s clean air focus with our EV plans that will accelerate the world’s transition to sustainable mobility.”
Mr. Nishchal Chaudhary, Co-Founder & CEO, BattRE:
“Though there are no direct incentives introduced for the EV industry, the proposed steep increase in capital expenditure will push the growth and induce a higher consumption, which will definitely boost automobile and EV sales.
From the EV industry’s point of view one expectation that remains unanswered, in the budget, is the reduction of GST on lithium batteries and other raw materials to 5%. The current GST structure leads to a huge working capital blockage, thus hindering growth.”
Amit Kumar, CEO, OLX Autos India:
“This time the budget will go a long way to assuage concerns regarding the economy. For the automobile sector, voluntary scrapping of old vehicles is a welcome move as it will boost supply and demand for pre-owned vehicles. Doubling the tax audit limit to Rs 10 crore will improve ease of conducting business for micro and small enterprises and will benefit the used car dealer ecosystem, many of whom are small to medium-sized entrepreneurs themselves. A heightened focus on developing highways and transportation infrastructure will augur well for the automobile sector as this would boost the need for personal vehicles for last-mile and first-mile connectivity.”
Mr. Rajeev kapur, MD, Steelbird Helmets:
“I believe the budget is being appreciated by each and every sector. The decision of investing in many sectors by the government will lead to more employment which will generate fund flow.
Due to this, this year the economy will surely boost. Being a two wheeler segment, the Auto industry is already on the blooming side and will be on this side this year too. We welcome and appreciate the budget announced by Hon’ble FM Nirmala Sitharaman. I would request to consider the helmet as a safety product and decrease the GST on the same, as Helmet is a life saving device.”
Mr. Ankit Kumar,CEO, Gozero mobility:
“The New Budget announced by the Hon’ble FM Nirmala Sitharaman, has shown that the Govt. of India is looking to make great strides in promoting its indigenous EV industry. First is the Voluntary Vehicle Scrapping Policy, with the intention to phase-out vehicles that are poor in fuel efficiency off the roads. This policy would incentivise owners of old vehicles, which are usually the ones that fit the bill, to voluntarily give up their vehicle for scrap and look towards newer vehicles and more innovative mobility solutions.
This policy would definitely push the EV industry more into the limelight as the public now has more reason to evaluate the economic feasibility of EVs and e-micro mobility options like e-bikes.
Secondly, Rs. 2217 crores have been allocated to tackle the plaguing issue of air pollution, targeting 42 cities that have a population of more than a million. This mission would definitely entail the promotion of sustainable transportation, as vehicular emissions constitute a major share in our cities’ air pollution. Also coupled with the Vehicle Scrapping Policy, the auto industry can be optimistic about seeing the rise of charging infrastructure, and bicyclists and e-bikers could see their dreams of bicycle friendly streets being fulfilled.
Thirdly, the National Hydrogen Mission with the proposal to draw energy from renewable sources ensures that the entire value chain in energy consumption, including for electric vehicles, would be as carbon neutral as possible.
The auto and micro-mobility industry are still holding out hope for more reforms relating to tax structure and import duties on raw materials and components to become more friendly in following announcements in the coming months. Seeing the pledge taken by the government in this Budget, the industry believes that its hopes would be fulfilled this year.”