Automotive sector

2021-22 Budget Wish List: Here Are The Key Challenges For The Automotive Sector

Main challenges Sustained recovery in market demand: The market has shown green shoots of recovery with strong growth at T3FY21. Timely relaunch of the NBFC sector: The sector represents a significant portion of retail financing and is essential for driving sales in the commercial vehicle segment.

Currently, this sector is in great difficulty with high NPAs and availability of funding Commercial vehicle industry: Industry and its supply chain have a longer road to recovery

Industry demand

  • GST reduction: Tax cut from 28% to 18% for 1 year
  • Vehicle scrapping policy: An incentive policy for the scrapping of commercial vehicles over 15 years old and revised axle standards are needed
  • Infra projects: Prioritize infra projects, eg. NHAI, irrigation, etc., as part of tax expenditure initiatives
  • Accelerated depreciation of vehicles: Introduce a single accelerated depreciation for new vehicles purchased during FY22
  • Promote localization: Support needed in sourcing automotive components
  • VE Incentives: A one-year easing of FAME II policy conditions to include incentives for buyers of personal vehicles (excluding transport) and an increase per kWh of incentive for two-wheelers
  • Transfer price: Provide relaxation / flexibility in transfer pricing standards (arm’s length pricing), in line with the OECD recommendation, for companies that have faced significant challenges

graphic graphic

Dear reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that matter to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these difficult times resulting from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative views and cutting-edge commentary on relevant current issues.
However, we have a demand.

As we fight the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of providing you with even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital editor

First published: Sat Jan 16, 2021 12:11 am IST