Budget Not on Expected Lines for Auto Industry: SIAM

Budget Not on Expected Lines for Auto Industry: SIAM

Budget Not on Expected Lines for Auto Industry: SIAM
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 Although SIAM was expecting direct benefits from the budget, it said the increase in customs duty for CKDs and SKDs of electric vehicles and CBUs of Commercial vehicles are positive steps for Make in India

The Society of Indian Automobile Manufacturers (SIAM) - the apex industry body - said it was looking forward to some direct benefits from the Union Budget, but asserted that the budget speech by Finance Minister Nirmala Sitharaman was not on expected lines. "The auto industry was expecting some direct benefits in the budget, which could have helped in reviving demand in the context of the current slowdown and huge investments made by the Industry for transition to BS-6 and from that aspect, the Budget speech was not what we were expecting," said Rajan Wadhera, President, SIAM.

Wadhera said an incentive-based vehicle scrappage scheme, budget allocation for diesel buses procurement by STUs and NIL customs duty for lithium-ion batteries have not been considered. However, he pointed out that the increase in customs duty for CKDs and SKDs of electric vehicles and CBUs of Commercial vehicles however are positive steps for Make in India.

He added while the announcements made with respect to rural economy and infrastructural development are steps in the right direction, a quicker execution on ground can act as an enabler for increased economic activity and subsequently lead to an increase in vehicle demand.

Meanwhile,the Automotive Component Manufacturers Association (ACMA) - the apex body representing India’s auto component sector, expressed satisfaction on the measures announced in the Union Budget especially for the focus on development of rural economy, manufacturing, infrastructure & logistics, education & skilling, tax reforms & ease of doing business and encouraging digitisation. "“The three levers of Aspirational India, Economic Develop and a Caring Society enshrined in the Budget will be the bedrock to propel us further,” said Deepak Jain, President, ACMA.

Jain stated that the Rs. 1,000 crore handholding scheme announced by the government for mid-sized companies including those in the auto components will give a thrust to export development, R&D and technology upgradation. The scheme which has also been a long-standing request of ACMA, will help the component sector remain relevant and competitive. This has also been a long-standing request of ACMA, he noted.

Vipin Sondhi, MD & CEO, Ashok Leyland sounded upbeat about the budget. "“The budget overall covers a wide spectrum of areas such as health, skill, infrastructure, agriculture which will boost the economy. The allocation of Rs. 2.83 lakh crore for Agriculture, Irrigation and Rural Development will assist the rural economy and will be good for the CV industry in the long run."

He added that the infrastructure push of Rs.100 lakh crore over the next 5 years, including increased allocation of funds for roads and highways and the proposal to develop five new smart cities in collaboration with states in PPP mode, will drive positive sentiments for the commercial vehicle sector by increasing demand.