NEW DELHI: The Union Budget 2009-10 on Monday failed to enthuse the slowdown-hit auto industry. Though some reduction in excise duty on large cars and utility vehicles has been announced, the industry leaders said a complete package was the need of the hour for the revival of the industry, particularly for passenger car and commercial vehicle segments. The industry has, however, welcomed continuation of CENVAT cuts that were announced in December last.
In his budget speech, Mr. Mukherjee announced the reduction of excise duty applicable to large cars and utility vehicles of engine capacity of 2000 cc and above to Rs. 15,000 from Rs. 20,000 per vehicle. Similarly, the excise duty on petrol driven trucks and lorries has been reduced from 20 per cent to 8 per cent; while on chassis of such trucks and lorries, the reduction is from 20 per cent to 8 per cent.
Commenting on the budget, Society of Automobile Manufacturers President, Ravi Kant, who is also Managing Director of Tata Motors welcomed the reduction of the additional levy on large cars and utility vehicles and hoped that further rationalisation of tax rate would take place and the excise duty on utility vehicles and cars, other than small cars, would go down. While these proposals will have a positive impact on the automobile industry, these will be visible in the medium term and long term rather than having any immediate impact, more so for the commercial vehicle segment, which is going through severe downturn.
Hyundai Motor India Managing Director H. S. Lheem said their demand for I ncentives for promoting exports have been ignored. “I am very disappointed as no attention was given to the exports of the auto industry. We expected some incentives for exports. It is the time to promote exports not only for the vehicle industry, but also for the auto component sector,” he added.
Similarly, General Motors India President and Managing Director Karl Slym said the budget failed to meet the expectations of the auto industry. “We were expecting some rationalisation of taxes. But these have not happened,” he said. The automotive industry is one of the growth drivers of the economy and as such some tax relief would have helped the industry to generate some volumes,” he said.
Expressing his disappointment, Ford India Managing Director Michael Boneham said: “The majority of demands of the automobile industry have not been addressed. The opportunity to rationalise excise duties on the passenger car segment has not been considered.”
Automotive Component Manufacturers Association of India President J. S. Chopra said overall, the Budget was neutral for the auto-component industry as it did not contain anything new for the industry. The small reduction in the excise duty on large cars and petrol driven trucks would have a very marginal positive impact on vehicle sales.
Source : The Hindu