The Indian Automobile Industry is the fifth largest in the world and is expected to be the third largest by 2020. India is thus, an essential destination for all major automakers around the world. In order to make India a very good destination for the automakers’ investments, the Indian Government need to make the automobile industry a cusp of technological innovation and quality as this industry has huge effects on the GDP and job creation scenario in India.
Looking ahead, the Union Budget of 2018 has a huge importance and audience mainly because of the introduction of the Goods and Services Tax (GST) this year. Thus, the Union Budget has even a greater importance as it will be carved in the books of the Indian economy due to this GST switch this year.
The following are a list of the most crucial expectations from the Union Budget 2018.
Increase of budget allocation for the rural economy: India has always been an agrarian economy and the rural population has a major bearing on two-wheelers segment, entry-level passenger segment and tractor segment.
Thus, the Union Budget should provide a major thrust on rural economy and the infrastructure spend. Increased target for financial assistance, credit allocation, irrigation and crop insurance will help in decreasing the fluctuating nature of the rural economy of our country.
Corporate and Income Tax relief/ reduction: The upcoming Union Budget should also bring the income tax and corporate tax down so as to boost the consumption and spending power of people and also to boost the investment power of major companies in India.
Increase in Job Creation: As key sectors for job creation are the Service and Manufacturing sectors, so, one of the most critical expectations from the Union Budget 2018 will be job creation in the economy. Prime Minister’s Startup India program has helped in boosting the job creation process and has helped young Indians in finding their true calling.
Refining the existing GST structure for the automobile sector: Ever since the Indian economy has switched to GST, the automotive sector has been battling with the tax not being simple enough as far as its structure is concerned. Even though, GST has solved the perennial problems of the cascading effect of many taxes, still the Government needs to simplify the GST structure with not more than 2 rates.
Clear Policy and Roadmap for EVs implementation: Ever since the Government has announced complete electrification of cars in India by 2030, all major automakers have been busy in devising new plans and strategies for aligning to this upcoming inevitable revolution of EVs in India.
The Government needs to provide a clear policy roadmap in the Union Budget 2018 for setting up the needed infrastructure and incentives for businesses investing in the EV game.
Incentive Policy for Scrapping Old Cars: The proposed “Voluntary Vehicle Fleet Modernization Plan” of the Government is a great step towards replacing old technology cars on Indian roads. Thus, the Union Budget 2018 is expected to answer this in detail with a clear cut policy and incentives.
Successful implementation will not only help the environmental effects but also reduce fuel consumption by the old cars.
Boosting Exports: In order to boost exports, there has to be a focus on FTAs and investment in upgrading the port infrastructure in India. There needs to be emphasis on creating coastal economic zones and special economic zones with a clear policy.
