Budget 2023: From FAME 2 extension to EV tax revision, what auto industry wants
Finance Minister Nirmala Sitharaman will announce the Union Budget 2023 on February 1 in Parliament. Like many other sectors, the auto industry too has certain expectations from the upcoming budget. Various industry stakeholders, including vehicle manufacturers, component makers and charging infrastructure developers, are hoping for tax relaxations, benefits and incentives in the upcoming budget of 2023.
Mercedes-Benz, being the number one luxury car brand in India, is optimistic that the union budget will be progressive and forward-looking. Santosh Iyer, Managing Director and CEO at Mercedes-Benz India, hopes the upcoming budget will act as a catalyst for India’s long-term growth trajectory. He hopes the current tax incentives and other benefits available for the electric mobility segment should continue for around ten years. "The current tax incentives and other benefits should continue for a period of 8-10 years in order to boost growth in the EV segment, advancing the inflection point for EVs and making the auto industry gain the critical mass for these vehicles. Incentivizing the creation of charging infrastructure will play an important role in expediting EV adoption in the country and boosting customer confidence. Finally, we wish for reconsideration of the current import duties for EV’s to boost their demand, resulting in a faster acceleration for achieving the Government’s vision of a sustainable green mobility ecosystem in the country," he added.
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Mercedes-Benz India also believes that the budget will emphasise on road infrastructure development across the country. Toyota Kirloskar Motor (TKM), one of the key automakers in India, too echoes the same thought. It believes that the budget will focus on infrastructure degradation alongside giving a special thrust to the rural economy. TKM also hopes the budget will focus on keeping a check on rising interest rates, which would be important for sustaining good demand.
Toyota has been a key player in the greener powertrain solution segment in the Indian automobile market. Keeping a focus on that, TKM hopes the budget will announce policy support for electric mobility and alternate fuels like ethanol, hydrogen and bio-CNG.
Electric mobility has found increased mentions in the Union Budget over the last few years. The Society of Manufacturers of Electric Vehicles (SMEV) believes that momentum will continue in this year's budget as well. It hopes there will be more clarity and transparency in the GST structure for electric vehicles' spare parts. Also, SMEV hopes the FAME 2 scheme will be extended further after it expires on March 31, next year, as this policy has helped build positive growth for electric vehicles in India. (Read the full report)
Echoing the same sentiment as SMEV, Tata Motors too, hopes that the government would consider the extension of the FAME II scheme. Not just passenger vehicle manufacturers but EV players in the commercial space are also looking forward to key announcements in the budget. Mahesh Babu, CEO of Switch Mobility Ltd., hopes the government will extend the FAME scheme for a few more years to help sustain the growth momentum in the electric vehicle segment in the country. “India is making an intense push for faster adoption of electric buses, and the segment has seen exponential growth over the years. Given this scenario, one of the key expectations from the budget is continuation of FAME subsidy, for at least few years and a reasonable EV penetration in the commercial vehicle segment," he said.