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| UPDATE:Auto industry cheers continuation of CENVAT cut |
| Press Trust of India / New Delhi Jul 06, 2009, 18:16 IST |
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The Indian auto industry, which has been struggling hard to emerge from the sluggish market conditions, today said that continuation of CENVAT cuts in the General Budget 2009-10 is a good step, but added that there could have been some incentives for exports.
"I am happy on behalf of the whole industry as the Fringe Benefit Tax (FBT) has been abolished, but also little bit unhappy as MAT has been increased. It is a good step that the benefits of the stimulus packages have been continued," Bajaj Auto Ltd Chairman Rahul Bajaj told PTI.
Expressing similar sentiments, Society of Indian Automobile Manufacturers (SIAM) Director General Dilip Chenoy said the Budget has maintained stability in the prices of vehicles "infact it has reduced the prices in case of some vehicles by Rs 5,000".
The government announced a four per cent cut in CENVAT in December as part of its stimulus package, which helped in riving the auto sales up to a certain extent.
The country's largest carmaker, Maruti Suzuki India, Chairman R C Bhargava said: "There are lot of positives in the Budget. The biggest positive of any Budget is continuing with a stable environment. Stability is very important for the industry, which is what he (the Finance Minister) has done."
However, country's largest exporter Hyundai Motor India Managing Director H S Lheem expressed unhappiness with the Budget for not providing any incentives in promoting exports.
"I am very disappointed as no attention was given to the exports of the auto industry. We expected some incentives for exports. It is the time to promote exports not only for the vehicle industry, but also for the auto component sector," he added.
General Motors India President and MD Karl Slym also echoed concerns that the Budget did not meet the expectations of the auto industry as sales still continue to be sluggish.
"We were expecting some rationalisation of taxes. But these have not happened. The automotive industry is one of the growth drivers of the economy and as such some tax relief would have helped the industry to generate some volumes," he added.
On the commercial vehicle front, which has been the hardest hit due to slowdown, Chenoy said nothing specific was done.
Chenoy said that abolition of surcharge on income tax, increase in the tax exemption limit, and abolition of Fringe Benefit Tax (FBT) would help increase consumer savings, boosting the purchasing power.
The Budget today proposed to reduce the additional excise duty on big cars with engine capacities of 2,000 cc and above by Rs 5,000 per unit. It also cut the duty of petrol-driven trucks to eight per cent from 20 per cent at present.
"There are some indications, like increased allocation for JNNURM (Jawaharlal Nehru National Urban Renewal Mission). But whether that cover busses, we have to see now. We expect something has to happen towards CV sector," Chenoy added.
The auto component industry also welcome the thrust on boosting infrastructure development.
"The increase in the outlays for NHAI and JNNURM would fuel growth in the automotive industry in the medium to long term. The auto components industry would be an indirect beneficiary of this growth," Automotive Component Manufacturers Association of India (ACMA) President J S Chopra said.
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