Budget 2023: Auto Inc.’s Priorities Include Infrastructure Improvements and Tax Reform

By Newsatic Last updated Jan 12, 2023

Any further sop in the financial budget will operate as an adrenaline boost to further accelerate the retail sales of cars for India Auto Inc, which is already on a strong recovery spree with passenger vehicles racing toward record-breaking sales.

On February 1st, when Finance Minister Nirmala Sitharaman delivers the Budget 2023, all eyes will be on her. Both individuals and companies want to ring in the new year with a lot more hoopla and hope to profit from some sort of relief or benefit in the upcoming fiscal year.

For the transportation and logistics industry, the Budget 2022–23 was heralded as a historic budget. The national highway network expansion goal was expanded by 25,000 km, and a budget of Rs 20,000 crore was set aside for it. Then there was the 1.4 lakh crore allocation for the construction of the railroad infrastructure. or the 100 freight terminals that will be built over the course of three years.

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Building Infrastructure to Support Growth

In an interview with Express Mobility, Vinod Aggarwal, President of the Society of Indian Automobile Manufacturers (SIAM) and President & MD of Volvo Eicher Commercial Vehicles (VECV), expressed his optimism that the government would continue to prioritize rapid infrastructure development.

The government should continue to invest more money on infrastructure projects, growth initiatives, and similar initiatives. As a sector, we would be pleased if the government kept up its growth-oriented strategy and continued to be a little more lenient in handling its deficits. Infrastructure and other CAPEX projects should continue to get more funding from the government. Similar to last year, a very good allocation of Rs. 750,000 crore was made, and we require that as the economy grows. The capital investment is necessary. The government could see ways to alleviate the problems for the consumers in rural areas. There should be measures made to entice them back if they are affected by the price-sensitive environment and are delaying purchases

Vinod Aggarwal President of the Society of Indian Automobile Manufacturers (SIAM)

Justification of the GST Structure

The long-awaited Goods & Services Tax (GST), which would have replaced central and state taxes by bringing much-needed transparency to the manner taxes were collected, was finally implemented by the Indian government on July 1, 2017. The new tax system charges goods and services in one of four brackets: 5%, 12%, 18%, or 28%.

There has been a demand for the auto sector to be rationalized and for them to be placed in the lower tax category.

“If one must have a wish list, I would like to see the GST tariff system for the car component business rationalised. The component industry had 219 tariff lines when the GST was first announced in 2017, of which 40% were subject to an 18% GST. We have collaborated with the government throughout the years, and as a result, 60% of these tariff lines are now at 18% and 40% are still in effect. Because we are an intermediary business, I’m optimistic that when the government’s revenue position improves with increased compliance across sectors, it will take a position. Vinnie Mehta, Director General, Automotive Components Manufacturers Association (ACMA).

Direct Customer Benefit from FAME Subsidies

In India, the electric car market is expanding quickly. In 2022, the nation registered 83,585 electric vehicles on average each month. This is true despite the ecosystem’s difficulties with electric two-wheelers.

The FAME policy subsidies should be immediately passed on to the customers, according to Sohinder Singh Gill, Director General of the SMEV (Society of Manufacturers of Electric Vehicles) and CEO of Hero Electric. Instead of a time-based strategy, we may have one that encourages EV adoption until it reaches a level of about 20 percent, at which point the subsidy could be reduced.