Union Budget 2022: Hits and misses for India's auto sector
Union Budget 2022 was presented in Parliament on Tuesday morning by Finance Minister Nirmala Sitharaman in which she touched upon several highlights from the road map charted for the Indian economy. While the pandemic years had brought with it various challenges, the outlook ahead is one that is largely seen with a sense of cautious optimism.
For the Indian automotive sector, the challenges had begun appearing on the horizon even before Covid-19 rared its ugly head. The situation has - and continues to be - largely grim even if there has been a big push in the world of electric mobility.
As far as electric mobility is concerned, there were some key announcements in Budget 2022 which has been lauded at large by the auto sector. But for the overall auto sector, however, there wasn't much reason to cheer.
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Here's a look at some of the hits and misses for the Indian auto industry from Union Budget 2022:
Hits
India's push to promote clean transport technology has been gathering momentum for quite some time now. Budget 2022 added a bit more thrust with battery makers set to gain from a new swapping policy for electric vehicles.
Little wonder then that EV players welcomed the move. “The introduction of the battery swapping policy to improve the country's EV infrastructure is a positive and progressive step that could potentially address the range anxiety issue, which is one of the impediments to a mass-market transition from internal combustion engine-based vehicles to electric vehicles," said Jeetender Sharma MD of and Founder at Okinawa Autotech.
Yogesh Bhatia of LML Electric echoed the sentiments. “Clean and sustainable mobility is critical for reducing fossil fuel dependence and combating climate change," he said. “We applaud the government's efforts in this area and look forward to seeing concrete steps taken to address the barriers to EV adoption."
(Read more reactions here)
There's also some cheer for the transport and infrastructure sector with the finance minister announcing plans of 25,0000 kms of national highway in 2022-23. Boost in connectivity, many regard, would promote not only economic development over all but give an impetus to the tourism sector as well.
Misses
Car manufacturers are likely to feel left out. Facing unprecedented challenges from the global shortage in semiconductor chip and rising input costs, there wasn't much in Budget 2022 that assured of relief. Live Mint reported that the S&P BSE Auto Index was the worst performer among 19 sectoral gauges after Tuesday’s budget announcement.
