In the upcoming interim budget for 2024, the auto sector expects news like a rationalized tax system for luxury cars, sustained emphasis on clean and green transportation, and an extension of the FAME program.
Some of the top auto companies believe that the government should keep up its supportive policies for green mobility while putting a strong emphasis on infrastructure development in the next budget. Following this proposition many MDs of automobile companies made a statement. Let's have a look at that.
Santosh Iyer, Mercedes-Benz India MD and CEO:
The automobile industry is expected to benefit from continued capital expenditure on infrastructure projects. The government should continue to prioritize policies that promote green transportation, accelerating the use of electric vehicles.
Dr Anshul Gupta, MD, Okaya Electric Vehicles:
Today, the electric vehicle (EV) market is leading the way in a revolutionary change, driven mostly by public subsidies and incentives. The FAME (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) plan and the EV tax exemption in India are anticipated by EV businesses and analysts to guarantee continued growth and affordability.
What can be expected?
FAME EXTENSION
The FAME initiative, which stands for Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles in India, has played a significant role in driving the expansion of electric car sales in the nation. Following FAME 1's success, the government unveiled the scheme's second phase, but with a few changes and additions. FAME 2 was unveiled in 2019 while FAME 1 ran from 2015 to 2019.
The government extended the program many times after the second phase concluded in 2022, and as of right now, it is set to expire on March 31, 2024. The government declined to extend it any further due to allegations of widespread misconduct and disregard for the program's regulations. The auto sector, however, anticipates that the government will continue the ecosystem for electric vehicles by adding to it or launching the FAME 3 program.
Constant emphasis on environmentally friendly transportation
The Indian government has been putting more and more pressure on transportation that is cleaner and greener. While the Indian vehicle market has seen a rapid increase in electric mobility across many categories, other cleaner powertrain options, such fuel cell and hybrid technologies, have also attracted attention, but not to the same extent.
Logical tax on high-end vehicles
Over the past few years, the luxury car segment in the Indian passenger vehicle industry has experienced tremendous growth. The industry leader in this sector has been Mercedes-Benz. Noting this, Iyer stated, "the luxury car sector in India has been contributing significantly to the GDP and is prioritizing the implementation of a rationalized tax structure and GST.In general, we anticipate uniformity in diverse policies and avoid any surprises in the forthcoming budget."