The electric vehicle (EV) industry has welcomed the Union Budget 2020-21, even though there were no specific announcements to boost the industry.
The electric vehicle industry has had a lot of expectations from the Union Budget 2021-22, particularly on GST reduction, import duty reduction on lithium ion battery cells, as well as extension of the Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) II scheme. The FAME II scheme came into effect from April 1, 2019 and the EV industry was expecting some sops to help the industry, including financing solutions to help boost the industry. While there have been no specific Budget announcements which are likely to boost the industry, the industry overall has welcomed the Union Budget 2020-21 with cautious optimism.
“The Budget 2021-22 effectively sets the roadmap for the next five years with a slew of measures for overall economic growth. We are glad to see the government’s continued focus on Atma Nirbhar Bharat and Make in India. The increase in customs duty on automobile parts will rightly encourage domestic manufacturing. We are thrilled to see the highest ever CAPEX of ₹ 1.08 trillion for the Ministry of Roads. Evidently, the budget comes with an increased focus on strengthening the infrastructure of the country, which is a welcome move. Furthermore, the commitment of ₹ 1.97 lakh crore for PLI schemes covering 13 sectors, also comes as a cheer for the industry. All in all, the budget is definitely rewarding,” said Jeetender Sharma, Founder & Managing Director, Okinawa Autotech.
Finance Minister Nirmala Sitharaman announced a scrappage policy for old vehicles, which will be voluntary, and will give a fillip to new vehicles. Along with the announcement of the scrappage policy, and budgetary allocation for improving India’s highway infrastructure, the overall auto industry has welcomed the Budget, even though EV-specific measures were not announced during the Finance Minister’s Budget presentation.
“The voluntary vehicle scrappage policy announced to phase out old and unfit vehicles will encourage the sales of new vehicles. It is good to see that the government is looking at addressing the concerns regarding GST inverted duty structure. We look forward to more details on the inverted duty structure and the Production-linked incentive (PLI) scheme announced by the Finance Minister,” said Tarun Mehta, Co-Founder & CEO, Ather Energy.
However, the absence of any EV-specific announcements were a dampener for the electric vehicle industry. But industry leaders are optimistic that the coming financial year will usher in growth opportunities.
“The pandemic has had an inevitable impact on the auto industry and we were also expecting the government to look at reducing the GST and reconsider the current taxation framework applicable on raw material and the final product in case of EVs which could have provided the much-needed impetus to the industry. The government could have also looked at aggravating the domestic demand by further incentivising individual and commercial consumption of EV pan India. Nevertheless, we are ever so optimistic and certain that this fiscal year will unfold immense growth opportunities and we are geared up for the same,” added Jeetender Sharma of Okinawa Autotech.