Union Budget 2013: Expectations of the Indian auto sector

Thursday 28 February 2013, 12:02 PM by

Just few minutes left for the declaration of 2013-14 Union Budget of India and the entire domestic population is hoping for an easement in their pocket expenses for this year. The budget affects almost all sectors of the economy and is one of the most important events in deciding the future of a government in the country. Further, wraps will be pulled off the 2013-14 Union Budget by P. Chidambaram, Finance Minister (FM), Government of India, on February 28, 2013. Apparently, the domestic automobile industry has pinned great many expectations from Chidambaram's budget for 2013-14.

Almost all major Indian auto makers want the government to allow a further reduction in the excise duty levied at the moment. Currently, 12 per cent excise duty is charged, which the automobile sector is asking to be lowered down to 10 per cent. The cutback is expected to benefit companies that manufacture vehicles on the Indian turf. However, the Original Equipment Manufacturers (OEMs) could pass down a cut in excise duty for its consumers, in order to support slackening sales in the domestic auto sector.

According to the 2012 Union Budget, the Indian central government assigned funds worth Rs. 12,522 crore for the Jawaharlal Nehru Urban Renewal Mission (JNNURM). The JNNURM is likely to benefit the entire Indian automobile industry and an extension to the same is eagerly anticipated. An extension in the scheme will be helpful for firms like Ashok Leyland and Tata Motors. The companies operating in the farm equipment sectors are also wishing for an increase in the agricultural credit in the 2013-14 Union Budget. At present, the credit stands at Rs. 5,75,000 crore and an increase could prove handy for the growth of entire industry. This will facilitate allocation as per the rural development programme, besides boosting sales of tractors and two-wheelers in the country. The prominent beneficiaries will be Mahindra and Mahindra (M&M) Limited, BACL and BAL.

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