India Budget 2014: Auto Industry Hopes for Extension of Excise Duty Cuts
India Budget 2014: Auto Industry Hopes for Extension of Excise Duty Cuts. In a series of meetings with new ministers of the Modi-led government, auto industry body SIAM has sought continuation of reduced excise duty on vehicles, new foreign trade policy and enhanced export incentives for vehicles, among other to boost the beleaguered sector.
New Delhi: In a series of meetings with new ministers of the Modi-led government, auto industry body SIAM has sought continuation of reduced excise duty on vehicles, new foreign trade policy and enhanced export incentives for vehicles, among other to boost the beleaguered sector.
A delegation led by SIAM President Vikram Kirloskar had met ministers of Commerce and Industry, Road Transport, Environment and Heavy Industries this week highlighting key issues and seeking support from the new government ahead of the Budget that is expected next month.
"The objective of these meetings was to apprise the ministers of the current status and challenges being faced by the industry," Society of Indian Automobile Manufacturers (SIAM) said in a statement.
Specific suggestions made included continuation of the reduced excise duty on vehicles, new foreign trade policy and enhanced export incentives for vehicles, it added.
In the interim Budget, excise duty on small cars, scooters, motorcycles and commercial vehicles were cut to 8 per cent from 12 per cent earlier.
The same for SUVs was slashed to 24 per cent from 30 per cent, while on large cars it was reduced to 24 per cent from 27 per cent earlier and mid-sized cars to 20 per cent from 24 per cent previously.
SIAM further said other issues discussed in the meetings included streamlining and free inter-state movement of vehicles, promotion to electric and hybrid vehicles and prevention of overloading.
Encouraging alternative fuel vehicles, enhancing road safety, emission and fuel efficiency norms, fleet modernisation and scrap page policy were also discussed, it added.
Commenting on the development, Kirloskar said: "We were very encouraged by the response of all the ministers and feel confident that government would take a clear and holistic view of the automotive industry and work towards creating an enabling stable policy framework to ensure sustained growth of the auto industry."
While the SIAM representatives are yet to meet Finance Minister Arun Jaitley, it is impressing upon the ministers of the new government on the key role played by the sector, which accounts for 7 per cent of the GDP, in the country's economy.
"The SIAM delegation also highlighted the potential of the industry to contribute to the growth of manufacturing, exports as well as to the economy as a whole, including rural sector," the statement said.
Last year, the auto industry had clocked a turnover of Rs. 4,00,000 crore, while the total investment in the last five years on the sector is to the tune of Rs. 70,000 crore.
India's automobile industry has been struggling from a prolonged market slump. Car sales in India fell for the second consecutive fiscal in 2013-14 with a drop of 4.65 per cent at 17,86,899 units as compared to 18,74,055 units in the previous fiscal.
In the 2012-13, car sales in India fell 6.69 per cent, which was the first decline in a decade.
Last month car sales in India, however, grew 3.08 per cent snapping two successive months of fall riding on positive sentiments over formation of a stable government at the Centre and lower excise duty in the Interim Budget.