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What auto companies seek from Budget 2013

February 13, 2013 16:12 IST

Recent initiative by Department of Heavy Industry to release the National Mission for Electric Mobility is a welcome move. It has several recommendations on how to fast-track the introduction and manufacture of electric vehicles (including hybrids).

Government’s decision to deregulate diesel prices will help bring a balance in the sale of petrol and diesel cars.

Liquidity and high interest rates impacted the sector for the major part of the financial year, which led to a subdued consumer demand.

The following are key issues in the auto sector that sector wants the Finance Minister to address:

Diesel tax: The government should restrain itself from imposing any additional levy on this segment. This measure would give some relief to players with significant diesel variants in portfolio.

Road map for GST implementation: A clear road map for GST implementation is necessary. The constitutional amendments were supposed to be taken up and the platform for implementation was supposed to be operationalised by August 2012, but it got delayed.

Reduction of excise duty and service tax
: Any further proposed hike in excise duty and service tax could push the economy back into the inflationary mode and also increase the overall cost for the auto industry.

Infrastructure development
: Continue to emphasise on infrastructure growth and rope in private sector participation in infrastructure investment. The government can explore increasing the budgetary allocation towards the National Highways Development Project.

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