With the closing of the financial year 2021, the global economy is on its way to recovering from the severe hit by the pandemic since the year 2020. One of the worst-hit sectors was the automotive world, which expects a lot from the Union Budget 2022. Here are some significant expectations from the automotive world:
Improvisations for Electric Mobility
As per automotive experts, the Union Budget must focus on bringing the growth of EVs. Backed by multiple Indian and Foreign investors, this industry has the potential to revive the automotive world at a faster pace. The government must focus on the implementation of Electric Power for transport effectively, which would also help to curb pollution to a great extent.
Today, the public feels skeptical to go for electric power because of their anxiety towards the existing charging infrastructure and low dominance in the market. If the manufacturing norms are eased, more EVs could be introduced, which would give the customer the faith to have hands-on experience with this technology. The government has already taken a few measures to promote EVs, but they need to go that extra mile to ensure public safety.
Also Read: 2022 Nexon EV To Get More Powerful- New Details Emerge
Tax Incentives
Lower GST rates for EV and Hybrid components
Even though the GST on EVs was slashed down to 5%, the taxation on the components continues to be 18-28%. A relief in taxation on components would lead to a significant decrease in the manufacturing costs of an electric vehicle, thus bringing them at par with IC engine vehicles.
Reduce GST for preowned vehicles
The used car industry expects the GST slab to be lowered to 5% for preowned cars. As per the existing tax regime, 12% tax is levied on a sub-4-metre vehicle and 18% on others. Slashing the tax would reduce the buying prices of preowned vehicles significantly and fetch more car buyers. FADA (The Federation of Automobile Dealers Association) claims this to create a win-win situation for the Government, Dealers, and Vehicle Owners by ceasing tax leakages.
Propose solutions for Chip Shortage
Automotive manufacturers urge to provide a solution for increasing wait times by easing up norms to pace up the supply chain of silicon chips. The longer waiting periods have led ready-to-ship vehicles to be held back in stockyards or customer deliveries by omitting several features, which further leads to loss of customer faith and satisfaction in their brand.
Some OEMs like Tata have already taken a leap forward by proposing in-house manufacturing of silicon chips.
Also Read: Tata To Set Up $300 million Semi-Conductor Assembly Unit in India
Aim Long-term growth for the auto industry
As per Mercedes Benz India, Union Budget 2022 should aim at long-term growth for the auto industry, prioritising employment generation, manufacturing infrastructure development, the introduction of latest technologies and increased decarbonisation efforts. The company retailed 11,242 units in 2021, a growth of 42.5 per cent over 7,893 units in 2020 and aims to grow more with time.
So, what are your expectations with the Union Budget 2022? Share your views in the comment section. Let's get into a discussion with this in our 91Wheels Telegram and 91Wheels Whatsapp group, where you can know more about vehicles, conduct discussions on your favourite ride, and much more! You can also subscribe to our Youtube channel for our exclusive video content on the latest from the world of cars and motorcycles. Also, connect with us on Facebook, Instagram, and Twitter for more about vehicles!
