The Interim Budget 2024: Automotive Viewpoint
On February 1st, 2024, the finance minister of India, Mrs Nirmala Sitaraman, presented the interim budget for the current upcoming financial year, till the Lok Sabha elections conclude. The 2024 interim budget focuses on EVs, agriculture, and social development. It emphasizes EV ecosystem support, post-harvest activities, and a comprehensive maternal healthcare program. Key points include infrastructural expansion, MSME support, and tax relief for small taxpayers. Fuel taxes remain unchanged due to stabilized global prices, aiding fiscal deficit targets.
Let us dive deep into the same, from the perspective of an auto-enthusiast and what it brings to the automotive industry:
The government is planning to go all out when it comes to the EV ecosystem expansion. With a major focus on the development of charging stations throughout the country, the vision for 2047 includes a substantial shift towards EVs. The electric vehicle market in India is expected to grow to 1 crore units by 2030 and currently, Tata Motors is playing as a lead in passenger electric vehicles. In a major policy shift, E-buses for public transport networks are to be encouraged fueling up the electrification process.
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The Indian car sector applauded Finance Minister Nirmala Sitharaman's 2024 Interim Budget, which emphasises assistance for electric vehicles (EVs). Notably, e-bus promotion and mandated biogas blending were emphasised. However, the FAME scheme is not being extended, and allocation has dropped by 44.43%. The PLI plan increases to ₹3,500 crore. Shashank Srivastava of Maruti Suzuki emphasises infrastructural barriers in electric vehicle adoption. Sudarshan Venu of TVS Motor praised the government's commitment to green mobility. The CEO of Zypp Electric, Akash Gupta, sees prospects for vendors. Rajeev Singh of Deloitte emphasises the importance of charging infrastructure in promoting electric vehicle consumption. Overall, there is optimism about the potential for growth in the EV market.
It is important to note that the Union Government has also made it mandatory for the industry to blend compressed biogas into CNG for transportation. This means that a phased system will regulate the conversion of compressed Biogas to compressed Natural Gas. Further, to supply environmentally appropriate substitutes for biodegradable production, the government will introduce a biomanufacturing and bio-foundry initiative. Other green energy measures include Offshore wind utilisation, coal gasification and biogas blending.
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The budget also had a mention of the full-fledged focus on the IMEC corridor. While this is a major economic investment, it is expected to bring down both the import prices of goods and the export expenses of commodities. This implies that the prices of electric vehicles and other vehicles will go down, due to cheaper electronic chips and lithium batteries. For sustained economic growth, the growth strategy of “reform, performance, and transform” is being encouraged by the Government.
While there are no changes in tax rates for direct and indirect taxes, there is disappointment among the consumers about the fuel taxes and no mention of them in the Interim Budget. The Revenue Secretary Sanjay Malhotra explained that petrol and diesel excise rates were lowered during a period of high oil prices and that a further decrease in fuel taxes now that world prices have stabilised looks improbable. He further hinted that no such proposal about any changes in the excise duties of fuels is on the table. This decision may aid the government in meeting its fiscal deficit target. Mr. Malhotra also highlighted relief measures for small taxpayers, including the withdrawal of disputed tax demands for certain periods. Additionally, he noted a significant increase in GST collection from the imposition of a 28% tax on online gaming.
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Viksit Bharat envisions a thriving, biodiverse nation with modern infrastructure and opportunities for all. To achieve a developed India by 2047, the next five years will be golden years of tremendous progress. Nirmala Sitharaman said Sab Ka Prayaas' democracy, demography, and diversity can fulfil every Indian's dreams of perceiving a progressive India with cutting-edge cars symbolising prosperity, eco-harmony, and modern infrastructure. The road ahead holds unprecedented automotive development, leading to a golden era for a fully developed automotive landscape by 2047. Fueled by the trinity of democracy, demography, and diversity, powered by 'Sab Ka Prayaas,' every Indian's automotive dreams are within reach.
The 2024 interim budget, presented by Finance Minister Nirmala Sitharaman, unfolds a transformative roadmap for India's future. Prioritising Electric Vehicles (EVs), the government fosters a robust EV ecosystem with a focus on charging infrastructure and E-buses. Green energy initiatives, including biogas blending, propel sustainable practices. The India-Middle East-Europe Economic Corridor promises economic benefits, influencing automotive affordability. While fuel taxes remain stable, tax relief for small taxpayers is highlighted. Viksit Bharat 2047 envisions a flourishing nation, and the budget's emphasis on agriculture, healthcare, and social development aligns with the trajectory toward a developed India, fueling optimism for a golden era by 2047.