'Some good news for auto and commercial vehicle industry'

R. Seshasayee, MD, Ashok Leyland

The National Budget for 2002-03 is a 'low risk; low return' effort, and hence may make a mildly positive impact on the economic growth rate. The budget however articulates a bold plan for globalisation, particularly, on two accounts. One - further liberalisation of capital account convertibility and second - declaration of destination levels of custom duty at 20% and 10% respectively in 3 years' time. Whilst this is welcome, there are no bold initiatives to remove the obstacles in the way of Indian industry being globally competitive, for example, a significant improvement to infrastructure. There is no mention of labour reforms, perhaps, having learnt the lesson from last year's budget. There is no mention of VAT in a comprehensive manner, incorporating solutions for inter-state trade.

From the point of view of Auto and Commercial Vehicle Industry there is some good news - the Golden Quadrilateral, some additional allocation to rural roads. Diesel and petrol prices are coming down although only marginally. The additional depreciation of 15% is useful, particularly when the industry has to make investments in technology upgradation.

I see mild recovery on account of the Budget. I only hope that sentiments don't plummet for other reasons such as the unfortunate incident in Gujarat.

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