After a forgetful year for the automobile sector in which most of the big companies in the market saw their sales figures go down, the expectations from the Union Budget 2020 are that much higher. On one hand, the automobile sector would look out for incentives to gain back its lost footing, while on the other it would want the government to boost its development prospects for the future. With the Budget all set to be announced on February 1, here are some automobile-centric expectations from the Union Budget 2020:
Incentivise Electric Vehicles
Both the sellers and the buyers in the automobile market are looking from incentives from the government as far as Electric Vehicles are concerned. There is a need for the government to incentivise the buying and selling of such cars if they see EV as the longterm future of the Indian automobile market. Minister of Road Transport and Highways, Nitin Gadkari, has on several occasions stressed on the fact that India is moving towards and EV-friendly market. Electric highways are being built. To practically make EV an option for an Indian buyer, the government will have to make him believe that it is in his financial and economical interest to purchase an EV.
GST rate cut on vehicles across segments
The automobile sector would be looking to have the GST on vehicles decreased from 28% to 18%. This could result in the increase in demand in cars that has fallen in 2019 when the sector a whole saw its worst crisis in over 2 decades. More so because Indian automobile industry is entering a new phase of BS-VI compliant vehicles from April 1, 2020. This has led to a price rise across sector and reduction in taxes could bring down the price and increase the demand, is what the makers would be hoping for.
One of the most important demands of the automobile sector is the development of the infrastructure. Better roads, better connectivity of fuelling stations in remote areas, more efficient means of finance amongst other things. With the coming in of EV, add charging stations to it, EV infrastructure is a whole different segment altogether. Investment in the EV infrastructure today is likely to reap rewards on a long term basis.