Budget 2021: Lower GST, better infra, push for EV form part of Auto playersâ€™ wishlist

All eyes are on the Union Budget 2021-22, to be presented by Finance Minister Nirmala Sitharaman on February 1, 2021. The Auto industry saw a roller-coaster time during the pandemic period, with a few months where no vehicle sales took place. However, in the ‘unlockdown’ period, vehicle sales are surging as people are now looking more for personal mobility instead of going back to public transport due to fear of the getting infected.

Banwari Lal Sharma, CEO, CarWale & BikeWale:

“Although the pandemic has caused ripples across industries, it has turned out to be an ill wind for the automotive industry to some extent. With increased focus on personal mobility, sales of PVs saw a considerably uptake towards the second half of 2020. Also, the lockdown compelled auto players to realise the significance of digital transformation for the sake of customer convenience, process automation, easy operations and a truncated car buying and selling journey.”

“However, while we continue to march forward, we expect Union Budget 2021 to address some fundamental issues that the industry has been dealing with. Firstly, GST rates need to be lowered to 18% to boost demand across all segments of PVs and CVs in India and to assuage the burden of taxation on first-time buyers. Focus on augmenting the financing framework for implementing ‘soft approvals’ on loans for car buyers, on par with consumer durable loans will go a long way in boosting demand. Also, introduction of vehicle scrappage policy is the need of the hour. Although this may take some time to culminate, in the interim, the Government can announce incentives for self scrapping of End of Life vehicles that are in contradiction with the emission requirements. Recycling parts of these scrapped vehicles will also allow domestic manufacturers to cater to the widening demand-supply gap.”

“We believe that it is important for both the industry and Government to work hand in hand with each other to steer this revolution and are positive that the upcoming Budget will lay equal emphasis on infrastructure development, digital adoption and strengthening stakeholder sentiments.”

Sandeep Aggarwal, Founder & CEO, Droom:

“The aftermath of COVID-19 has not only accelerated the need of owning a vehicle, but inclination towards online buying for an automobile to avoid physical contact. No country has ever created economic growth unless it has given transportation freedom to its people. With that, we hope the Union Budget 2021 will continue to invest heavily in road infrastructure and won’t criticise automobiles for pollution, because great road infrastructure will result in no pollution and no congestion on roads.”

“In India, only 5% of Indian households have a car, and 25% of Indian households have two-wheelers vis-a-vis 60% of households with cars in developed economies.”

“The auto industry expects relief from the Union Budget 2021-22 in the following multiple areas as well:

Demonetisation, GST, and confusion around EV and BSVI have really tempered automobile demand last several years. The Government should aim to announce things in this Budget that can simplify the automobile industry including direct and indirect taxation, whether making it more complex.
I really hope that the Government makes enough rules so that inter-state transfer of vehicles has a very low entry barrier and digitisation of extremely important industry for the economy.

All-in-all, time is now ripe for the Government to take initiatives to digitise the highly important industry, which is Automobile.”

Suhas Rajkumar, Founder, Simple Energy:

“The year 2020 was a never-seen-before scenario. We did see the GDP contract as the whole world was at a pause. Amidst the pandemic, a lot is expected from the Government in terms of the support they can give to the auto industry. EV manufacturers would certainly hope for few policy changes, ease of finance, and reduction of GST slabs from the upcoming Union Budget. These costs eventually increase the cost of manufacturing and of owning the EV, which again slows down its adaption. Undoubtedly, the Government has shown its support with various initiatives to boost the usage and adaption of EV like the National Electric Mobility Mission Plan 2020, capital subsidies under FAME, etc., to name a few, and we are expecting them to take more supportive steps on the policy framework, which will help the EV sector in the long term.”

Chirag Jain, CEO, Get My Parking:

“The mobility industry is going through rapid transformation, but that change needs to be reflected by the Government infrastructure. Government parking lots are an underutilised real estate, which need funds for upgrading into smart mobility hubs. These hubs can then be the platform for movement of people, goods, and services. From e-commerce delivery and logistic warehousing to EV charging and other automotive services – they all can be built on top of the Government parking infrastructure by private players – provided that these spaces have more amenities like water, sewage, electricity, security. A special fund needs to be dedicated for transforming 100 parking lots into smart mobility hubs for each Tier 1 city.”