2015 Budget though may have hiked up the prices of other luxury items, the automotive industry has by far been spared by its wrath. However, the duty on imported commercial vehicle like luxury buses and other heavy technology laden trucks have witnessed almost a double duty rise. Arun Jaitley, finance minister has announced a token fund of about Rs. 75 crore towards development of green cars including electric cars. Speaking more on the occasion, he said, “My Government is also launching a scheme for faster adoption and manufacturing of electric vehicles. I am proposing an initial outlay of Rs 75 crore for this scheme in 2015-16.”
The basic excise rate on smaller vehicle including compact cars and entry level sedan has gone up by 12.36% to about 12.5%. The burden in indeed marginal and most carmakers would not even pass it immediately onto buyers as it would range anywhere between a few hundred rupees to about Rs. 1000. However, the bigger vehicle that attracted 27% duty now gets slightly cheaper. Speaking more on the occasion, Pawan Goenka said, “There is an effective excise reduction on larger vehicles by 0.84-0.9% which will lead to a small price benefit which we will pass on to the customer.” He further added, “There is nothing big for the automotive sector. What I was expecting was whether there is going to be a thrust to increase demand, as the industry is suffering from demand creation. The push on Make in India - was there, but not enough. Broadly, what this budget offers is a big push on infrastructure, forecast of 8-8.5% GDP growth, which may put more money in the hands of a common man.”
With the new move, the most to gain out of fresh changes would be the makers of green vehicles. Speaking more on the occasion, Sohinder Gill, a Director at Society of Manufacturers of Electric Vehicles (SMEV), stated, “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.”
