The Union Budget for 2014-’15 was announced yesterday and the situation does seem to be brightening for the automotive industry in India. Finance minister Arun Jaitley stated that the Goods and Service tax (GST) will be introduced this year, small and medium enterprises (SMEs) will be given an investment allowance and the much debated retrospective tax was left untouched. We have the reactions of a few key people in the Indian automotive industry listed below:
"The Union Budget is growth oriented and presents a progressive roadmap to spur investments and infrastructure development. The ongoing excise benefits, along with the Finance Minister’s proposal to boost savings through revised tax structure, will surely strengthen consumer sentiment. We hope the Government will continue its pro-reform outlook and will soon introduce a roadmap for the implementation of GST to benefit business environment as well as the auto industry.”, says Vinay Piparsania, Executive Director, Marketing, Sales and Service, Ford India.
"We appreciate his considerations and his aim to achieve 7-8% GDP in 3 to 4 years. Structural reforms, including FDI liberalization in defense and insurance, initiatives to support local manufacturing and commitment to remove retrospective taxation, are significant steps from a larger macro-economic perspective. The industry really needs a robust and streamlined indirect taxation structure that will lend customers the confidence to spend more owing to the taming of prices. In addition to the Government’s willingness to give a fillip to the Indian auto industry, we were expecting a move towards making green vehicle technology a reality so that we could get the opportunity to bring our world-class electric and hybrid vehicles to our Indian customers’ doorstep.”, commented Kenichiro Yomura, President, Nissan India.
"Given the condition of the economy, the direction given in the budget is a positive one and the call for fiscal prudence is a welcome move. The government’s intentions to introduce CenGST and the DTC after review are very encouraging news. The steps outlined for the manufacturing, power, coal and mining sectors should spur economic activity going forward. Having said this, a monitoring mechanism should have been in place to ensure timely implementation of the projects in these sectors. The focus on rural roads, highways and expressways are welcome decisions. Some of the other announcements made by the finance minister on the taxation front are also positive steps. The challenge now is the implementation of the proposals.”, said Arvind Saxena, President and Managing Director, General Motors India.
“The Finance Minister has delivered a well defined and prudent budget with specific focus on infrastructure, manufacturing and rural schemes. Though there were no big bang announcements, the intent of the budget is clear. It is a move towards the right direction and there is an attempt to put a lot of placeholders through the various Rs. 100 crore schemes. In fact, I see this budget as a blueprint to the direction the Government will take over the next nine months. The extension on reduction of excise duty had already been notified. We did expect an announcement on incentives for electric vehicles which did not come through. A firm date for GST implementation would have been welcome.”, remarked Dr. Pawan Goenka, Executive Director, Mahindra & Mahindra.
“The Union Government recognizing the need for revival of investment cycle had already extended the Excise Duty Cut on Capital Goods for another 6 months in June, 2014 itself. The Budget’s focus on infrastructure sector, encouraging banks to lend long term funds to infrastructure sector, extending the benefit of investment allowance to Small and Medium Enterprises and emphasis on manufacturing growth should help revive the capital goods sector. While PPP in relation to many new projects has been announced, however, a roadmap for execution of existing held up projects could have helped turn things quickly.", commented Vipin Sondhi, MD & CEO, JCB India.
“ACMA also welcomes the announcement of the intent for implementation of GST and DTC at an earliest, as well as measures to encourage the Micro, Small and Medium sector (MSMEs) including revision of its definition. MSMEs constitute over 70% of ACMA’s membership and scaling-up has been a challenge for the sector. Extending 15% allowance to companies investing more than Rs. 25 crores in new plants and machinery will help attract investments in manufacturing sector.”, said Harish Lakshman, President, ACMA.