The much-awaited Union Budget 2015-16 has had no major announcements for the automobile sector in particular, but it clearly focused on boosting infrastructure in the country with INR 70,000 crore more to be spent for the same. Finance Minister Arun Jaitley allocated INR 14,031 crore to build 1,00,000 kilometres of new roads in the country. While an amount of over INR 10,000 crore was granted for the betterment of the railways. Also, INR 20,000 has been proposed by him for setting up of a national investment and infrastructure.
Further, the minister said the Goods & Services Tax (GST) is in place and will be in force from April 1, 2016. The finance minister said in his speech, "GST is expected to play a transformative role in the way our economy functions. It will add bouyancy to our economy by developing a common Indian market and reduce the cascading effect on the cost of goods and services. We are moving on various fronts to implement GST from next year."
For promoting green vehicles in India, Finance Minister gave INR 75 crores for the budding electric vehicle (EV) sector, though the amount wasn’t enough and the sector needed way more support. This allocation, Jaitely said, will come in the form of a scheme called Faster Adoption and Manufacturing of Electric vehicles (FAME). Another benefit for them comes in the form of concessions in customs and excise duties on specified parts for manufacturing of EVs and hybrid vehicles (zero basic customs duty, 6% CVD and zero SAD) is being extended by one more year i.e up to March 31 next year.
The decision to reduce corporate tax to 25 percent from 30 percent over a four-year period also comes as an indirect benefit, as this will attract increased investment, higher growth and more job opportunities as well.
Further commenting on the concession given to electric and hybrid vehicles Mr. Sohinder Gill, Director Corporate Affairs, SMEV said “We welcome the announcement on interim NEMMP towards promoting Electric Vehicles and supporting charging infrastructure and R&D investments,” Sohinder Gill, Director- Corporate Affairs, Society of Manufacturers of Electric Vehicles said. “It’s like a life saver for the ailing companies who had invested into the environmentally friendly vehicles but were bleeding heavily because of the lack of government support. In addition to supporting the industry NEEMP will create a significant positive impact on the health index of country by promoting zero pollution electric vehicles and reducing the dependence on the fossil fuel”
Although the industry was expecting much more in this direction approx. INR 1000 crore was demanded for a period of two years, in which a large part would have directly benefited to the customers through reduction of the prices of electric vehicles by around 20 percent and in installing charging stations in several Indian cities.
