EVs for the win

The lat­est union bud­get puts EVs right at the top of the govern­ment’s pri­or­i­ties when it comes to the au­to­mo­tive in­dus­try

Evo India - - BRIEFING -

THE AU­TO­MO­TIVE IN­DUS­TRY HAS BEEN strug­gling with poor sales num­bers and dwin­dling growth fore­casts for the past sev­eral months. It is said that a slow rate of growth for the au­to­mo­tive in­dus­try of­ten tells a story about the econ­omy as a whole. The new govern­ment that has come to power has an­nounced a slew of mea­sures to com­bat that. De­scribed be­low are the most sig­nif­i­cant steps in that re­gard.

Con­tin­u­ing the push for the adop­tion of EVs by the pre­vi­ous govern­ment, the bud­get pre­sented by the new govern­ment has made EVs much more af­ford­able. The Union Finance

min­is­ter pro­posed a GST cut from 12 per cent to 5 per cent on EVs while also promis­ing a com­plete cus­tomer duty waiver on e-drive as­sem­bly, on­board charg­ers, and charg­ing.

Trou­bled NBFCs were re­lieved as the Finance Min­is­ter pro­posed guar­an­tee on the pur­chase of loans from NBFC by banks for one year. The govern­ment has also pro­posed to cover losses of upto 10 per cent. This should have a pos­i­tive ef­fect on lend­ing, es­pe­cially for the com­mer­cial ve­hi­cle seg­ment.

A 2 per cent in­ter­est sub­ven­tion for MSMEs will cer­tainly help au­to­mo­bile deal­ers and small com­po­nent man­u­fac­tur­ers. Also, a lower cor­po­rate tax rate of 25 per cent to cor­po­ra­tions with a turnover of up to `400 crore will pro­vide ben­e­fits for 80 per cent of the auto com­po­nent mak­ers and au­to­mo­bile deal­ers.

1,25,000 km of ru­ral roads are to be up­graded with an in­vest­ment of over `80,250 crore in the next five years. The move will help stim­u­late ru­ral econ­omy and will be great news for last­mile mo­bil­ity.

How­ever, there are pro­tec­tion­ist mea­sures in the bud­get too. For in­stance, cus­toms duty has been in­creased from 25 per cent to 30 per cent on CBUs, with the ar­gu­ment that such a move will en­cour­age lo­cal man­u­fac­tur­ing.

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