The Impact Of Budget 2020 On The Indian Automobile Industry

0
253

Auto enthusiasts were caught in anticipation as the Finance Minister, Nirmala Sitaram announced the union budget for 2020. This can be regarded as 2019 not being the best year for the automotive industry. There was a general slowdown with serious dips in auto sales. So what can we expect from the new budget? Will consumer sentiments improve and will there be more finance available to make new auto purchases?

Read on to know the possible impact of the budget on the Indian Automobile Industry:

Boost in the sale of electronic vehicles–In a bid to boost the sales of electronic vehicles, automakers have put forth several measures. This includes a reduction in the currently levied GST and the import duty of the car parts. There is a growing emphasis on the need to drop the import duty costs especially attached with lithium batteries. These changes can promote the use of electric vehicles not only for the purpose of public transport but among private vehicle owners as well.

Possible reduced GST (Good and Service Tax) –According to some experts, the new budget may bring with it reduced GST rates on automobiles. It must also be noted that this form of tax makes for a big part of the government’s earnings. Additionally, the previous year did not see a slash in GST slabs within the automobile industry. Reduced rates in the coming may not be a factor of low possibility.

Possible drop in demand – According to experts, there may be a possible drop in the purchase of automobiles in the coming months. This can be regarded as the shift to Bharat Stage 6 emission norms (BS-VI). The BS-VI norms will have an immediate impact on the total price or automobiles on the market. This new inclusion will lead to an increase in the cost of several new vehicles. The increase will range anywhere between 8 to 10 percent and it will be more prevalent among diesel vehicles.

There have been several proposals made by automakers and a lot can be expected to change within the Indian auto industry. Car loans are more widely available today and they can indeed make auto funding easy and simple. Apart from that, only time can tell of the prolonging impact of the union budget and other regulations.