Auto index drops sharp, sector looks forward to Union Budget

Post-demonetisation, huge uncertainty over the sales prospects has been looming large over the automobile industry in India. The Auto index dropped more than 13 per cent and touched 19214 in the month of November. Now, the auto industry is pinning hope on the upcoming union budget as it will uplift consumer sentiment and infuse positive environment for auto industry including the electric vehicles.

Automobile industry players are working toward extension of the incentive scheme for electric mobility under the FAME scheme and hoping for a positive response from the upcoming union budget with a long-term plan for at least next five years.

The government had launched the FAME India scheme in 2015 with an aim to encourage eco-friendly vehicles. It predicted Rs 795 crore support for the first two fiscals. Faster adoption and Manufacturing of Hybrid and Electric vehicles in India (FAME India) falls under National Electric Mobility Mission Plan.

The government has cleared room for GST implementation and it will be all set go from July 1. Post GST, the whole cost of manufacturing vehicle will be reduced by easing off the cascading effect of tax-over-tax. This easy and consistent tax structure will simplify the way of doing business for those in the manufacturing industry.

Going forward, there will be additionally focus on infrastructure development and government initiatives for development and promoting of electric vehicle will also create promising environment for this industry.