SIAM welcomes the Interim Budget 2019-20 announced by the Finance Minister today. The budget has taken in consideration all sections of the society, especially the distressed farmers and the weaker section of the society, to extend benefits in the form of direct transfers and tax sops. Also, it has equally made progressive expenditure plans through higher budgetary allocation for infrastructural development and social measures.
The increase in income tax exemption upto Rs 5,00,000 is expected to positively impact consumer sentiment and consumption expenditure, which will give impetus to demand for two-wheelers and small passenger vehicles, while overall improvement in the road infrastructure will ease movement of people and goods on the road and have multiplier effect on the economy.
It is encouraging to hear the Finance Minister acknowledging the thriving Indian automotive industry and having faith on it becoming a global manufacturing hub for vehicles in the years to come.
SIAM is happy to note the emphasis laid on electric mobility in the 2030 Vision of Government of India that aims at increasing energy security, reducing oil import dependence and reduce vehicular pollution. SIAM would work with Government in creating an ecosystem that would enable us to achieve the target of becoming the world leader in electric mobility.
Ministry of Finance has recently notified definition and customs duties for Completely Built Unit (CBU), Semi-knocked down unit (SKDs) and Completely knocked down units (CKDs) of all categories of electric vehicles. The move has been welcomed by SIAM, however the customs duty for lithium ion battery has been increased from Nil to 5% for electric vehicle manufacturing. Since cell manufacturing is at very nascent stage at present in India, the current practice of importing cells is expected to continue and hence the change will only lead to increase in cost of manufacturing Electric vehicles battery packs, which is expected to be dampener in generating demand for electric vehicles. SIAM requests a review of increase in customs duty on cells.
SIAM is very enthusiastic of India leading the world economy through high economy growth in the next few years and the announcement by Hon’ble Finance Minister stating target of becoming USD 5 trillion economy in next 5 Years and USD 10 trillion economy in next 8 Years reassures us that the future is bright.