Budget 2017: Higher disposable income could drive two wheeler sales

New I-T rates will leave an additional Rs 12,500 every year in the hands of millions of individuals

Two wheeler makers have a reason to cheer from Budget 2017 as there will be more disposable income in the hands of buyers to make purchases. The new income tax rates will leave an additional Rs 12,500 every year in the hands of millions of individuals.

This, along with declining interest rates post demonetisation, may bring more buyers in the market. The two wheeler industry was hoping to post healthy growth on the back of a good monsoon and revised wages of government employees after Seventh Pay Commission. However, owing to demonetisation, volumes crashed in November and December. However, the decision on income tax could give a new push to volumes.

The share price of Hero MotoCorp, country’s biggest two wheeler maker, was up by almost one per cent to Rs 3,208 at the BSE (1.22pm). Two wheeler companies sold 13.49 million units in the domestic market during the April-December period of FY17, up 10% from the corresponding period of the previous year.