Budget 2021: Auto industry hopes for sops and breather1 min read . Updated: 01 Feb 2021, 10:12 AM IST
GST reduction, lower customs duty, detailed strategy for PLI scheme are some of the expectations of Indian auto industry from Budget 2021.
Right after the pandemic hammered the Indian auto industry to a historic low, the Budget 2021 is expected to bring some breather for the sector. With the PLI scheme outlined its lion’s share for the segment, the industry stakeholders are expecting a more detailed strategy on the implementation of the scheme.
(Also Read: Budget 2021: Auto industry's wishlist)
In recent times, the semiconductor shortage has impacted the Indian auto industry like its rest of the global counterpart. Hence, the budget should focus on enhancing local R&D along with more innovations, which would not only reduce the Indian auto sector reliance on overseas players for supply chain but boost the local manufacturing as well.
Electric vehicles have been a large agenda for the government for quite some time. The Budget 2021 is expected to bring some much-awaited steps to boost green mobility further. These include the reduction of GST on the electric vehicle components. Also, the auto LPG and CNG industry too seeking a reduction of GST as using such greener fuels would help in reducing pollution.
While manufacturing boost has been in focus, demand creation didn’t get that much attention from the government. The auto industry hopes to see some steps from the Finance Minister in terms of demand creation and increasing disposable income of consumers, which would help the auto sector to post more volumes.
Raw materials and several manufacturing components essential for the auto industry are expected to get a breather through customs duty reduction in the Budget 2021. Such a step would help the automakers to reduce manufacturing costs for the vehicles and eventually pass on the benefit to the customers, which would lead to lesser costs and more demand creation.
So far, the budget 2021 is a budget of expectation for the industry that contributes around 7% of the country’s total GDP and around 22% of manufacturing GDP.