Here's How Automotive Industry Reacted To The Union Budget 2023-24
Vinod Aggarwal, President of SIAM and MD & CEO of VECV, said, "33% increase in capital outlay with an effective provision of Rs 13.7 lakh crores will spur growth in the economy resulting in positive impact on the Auto sector. The Auto industry is fully aligned with the initiatives on Sustainability and Decarbonisation and increased focus on Hydrogen, Ethanol Blending, Bio Gas, Electric Vehicles and Battery Storage. Announcement for funding various Government Departments for replacement of old vehicles is also commended. Another appreciable feature of the budget is putting more money in the hands of the individuals by some lowering of effective personal income tax rates that should increase consumption and consequently lead to more demand. All in all, this is a growth-oriented budget with positive impact on the Auto Sector.”
Four-Wheeler Manufacturers
Santosh Iyer, Managing Director & CEO of Mercedes-Benz India, said, “The Union Budget 2023 should drive demand as it focuses on boosting consumption by increasing the disposable income of taxpayers. Further, an increased capital expenditure on infrastructure, particularly roads, should also create demand for the automotive sector. The change in basic custom duties is however going to impact the pricing of some of our select cars like the S-Class Maybach and select CBUs like GLB and EQB, making them dearer. However, as we locally manufacture most of our models, this will not affect 95% of our portfolio.”
Iyer, elaborated, “The focus on sustainability in the budget is commendable and initiatives like extending customs duty exemption of capital goods and machinery to manufacture lithium-ion cells for EVs is a step in the right direction, as it will consistently drive green mobility in the country.”
Venkatram Mamillapalle, Country CEO & Managing Director of Renault India, said, “Union Budget brings cheers to the automobile industry as it will positively give push to sales. The budget has laid special emphasis on the Vehicle Scrappage Policy which will not only boost the sales but will also enable in achieving clean and green environment for overall sustainable development. Additional, funds infusion in the scrappage policy is a remarkable step and is in the right direction to achieve India’s goal of being carbon neutral by 2070. This policy would eventually help the entire eco-system of automotive industry as this will translate into growing orderbooks of OEMs, increased output and job creation.
Another significant announcement made by the government on the customs duty exemption being extended to capital goods and machinery required for the manufacturing of lithium-ion batteries used in EVs. This step is a boost for companies that are / would be manufacturing electric vehicles locally as it will help reduce the cost of EVs.
The automobile industry will witness an increase in sales with the introduction of new tax rebate limit on personal income which has been raised from INR 5 lacs per annum to INR 7lacs per annum. This step is likely to help the sector as more disposable income with salaried customers may give supplementary push to demand for personal vehicles.”
PB Balaji, Group CFO of Tata Motors, said, "The well-rounded and pragmatic Union Budget 2023 provides further impetus to the auto industry that has been recovering post the pandemic while also giving it a helping hand to transition to a greener future. Overall, this confident, finely balanced budget will spur consumption, will crowd-in investments without raising inflationary fears and build further confidence amongst global investors in India’s sustainable growth story and take rapid strides towards achieving ‘Amrit Kaal’.
Turbo-charging investments: Strategically, the budget envisages a whopping increase of 33% in capex outlay to Rs 10 Lakh Cr which would provide further impetus to India for becoming a globally competitive economy. This defining feature of the budget would have a cascading effect on private sector investments, economic growth, employment generation and structurally lower long-term inflation. Continuing the 50-year interest free loan to state governments for one more year would also encourage further investment in infrastructure. The stepped-up investments have a direct bearing and a significant positive for Tata Motors Commercial Vehicle business.
Accelerating the green transition: The outlay of almost Rs. 55,000 Cr towards energy transition and National Green Hydrogen Mission for a low carbon and green economy and customs duty exemption on import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles are progressive and welcome moves. The excise duty cuts on blended CNG will help reduce the cost of running a CNG vehicle. Additionally, adequate fund allocation towards scrapping old central and State Govt vehicles will drive replacement demand and augurs well for the auto industry whilst bringing down carbon emissions from older generation vehicles. These steps firmly reiterate the Govt’s commitment and vision to achieve net zero carbon emissions by 2070 and will galvanize this nascent industry. Given Tata Motors’ commitment to green mobility, these interventions augur well for our business."
Anish Shah, Managing Director & CEO of Mahindra Group, said, “This is an outstanding budget as it is disciplined, growth-oriented, inclusive and sustainable. The Finance Minister has done a commendable job by tabling a budget that is big on consistency and driven majorly by capex. The steep increase in capex, to the tune of Rs 10 lakh crore, will ensure the continuum of cyclical recovery. Capex spending is good because it has a higher multiplier effect: every rupee spent on capex has a multiplier of Rs 3 as compared to just about Rs 0.9 for revenue expenditure. That apart, higher capex also creates jobs in the hinterland. The focus on core infrastructure, including increased funding for railways and clean energy, as well as the government's ambitious plans for the agricultural sector, will help to improve rural incomes. Above all, it is encouraging to see the government setting the pace for climate action by announcing a "green budget" that will pave the way for a greener, cleaner planet.”
Rajesh Jejurikar, Executive Director (Auto & Farm Sectors) of Mahindra & Mahindra, said, "The Budget has struck the right balance between managing growth and fiscal prudence. The reduction in income tax and other taxes will put more money in the hands of consumers, driving consumption and growth in the economy. The Government’s focused investments in infrastructure will support long term sustainable economic growth. The budget enhances the positive sentiment in the country when the global environment has uncertainty."
Vikram Gulati, Country Head and Executive Vice-President of Toyota Kirloskar Motor, said, “The Hon’ble Finance Minister Smt. Nirmala Sitharaman has presented an exceptional budget by balancing the need for sustaining rapid growth, while maintaining an eye on fiscal prudence. Given the fact that there is an outlay of Rs. 10 trillion towards Capex which represents 3.3% of the GDP, and a 33% Y-o-Y increase, this will definitely contribute to a robust economic growth. While doing so, the Government has aimed at a fiscal deficit target of 5.9% for the upcoming year with a clear glide path to bring the fiscal deficit below 4.5 per cent of GDP by 2025-26.
The Budget which not only focuses on inclusiveness, youth empowerment and skill development, but also aims to give impetus to “Green Growth” with sufficient outlays for supporting the recently announced National Green Hydrogen Mission, doubling of allocation for FAME 2 scheme and for providing viability gap funding for Battery Energy Storage System (BESS). The support for 500 new “WASTE to WEALTH” plants under the GOBARdhan scheme towards leveraging compressed biogas will also encourage a Green and circular economy.
Further, the announcement towards fund allocation for scrapping old vehicles of Central and State Governments will not only help the environment and reduce fossil fuel consumption, but will also generate demand for new vehicles. Priorities of this year’s budget clearly resonates the Government’s vision for overall development of our country in an inclusive, environmentally responsible manner towards a technology driven and knowledge based economy. The added reforms announced towards the ease of doing business, as well as simplifying the direct tax administration, as well as introducing new tax slabs, are bound to lead to greater disposable income, which will generate demand and are supportive for the growth of the economy.”
Two-Wheelers Manufacturers
Atsushi Ogata, Managing Director, President & CEO of Honda Motorcycle & Scooter India, said, “The budget presented today shed light on the enhanced focus on vehicle scrapping, green mobility and Net-Zero carbon emission goals which outlines the future of mobility in the country, giving a roadmap to boost the Indian auto sector. We are optimistic that such initiatives will usher in growth for the industry. "
Jeetender Sharma, Managing Director & Founder of Okinawa Autotech, said, “The elaborate focus on capital expenditure, infrastructure development, green growth, rural development health, education and skilling will support the nation to play a dominant role in the new world. We compliment Finance Minister for providing a big boost to green mobility. The exemption on custom duties on the import of capital goods and machinery required for the manufacture of lithium-ion cells will lead to faster adoption of electric vehicles in the country. This will further aid the development of an efficient EV ecosystem. Further, the push for the scrappage policy will support the overall growth of the entire automobile sector. The budget outlays the strong foundation for India’s long-term vision under ‘panchamrit’ and net-zero carbon emission goals for 2070 to usher in a green industrial and economic transition. We also believe that the relief in personal income tax will improve the consumer confidence & purchasing power in the country.”
Yatin Gupte, Chairman & Managing Director of Wardwizard Innovations & Mobility, said, “We welcome the forward-looking budget presented by our Hon’ble Finance Minister. The budget has rightly been referred to as the vision of Amrit Kaal. This year’s budget brings a big boost to the India's economy by covering all the verticals for the holistic development of the nation. The sanctioning of Rs. 35,000 crores for energy transition is a significant step toward India's net zero goals and will undoubtedly provide a much-needed push to a sustainable tomorrow. Tax exemptions on capital goods, lithium-ion batteries, and further reduction of customs duty will accelerate green mobility and rapid transition towards electric vehicles, making the sector stronger than before. We are eagerly looking forward to the government’s ambitious vision for upgrading the EV infrastructure ecosystem. Further relaxation on personal taxes and push for the job creation will bring sustainability in the market and increase purchasing power. Domestic consumption is a prime driving force for the economy. With the infrastructure boost and effective capital expenditure, the industry is optimistic that this budget will definitely augur well for the economic recovery and overall growth of the country."
Rahul Jain, Director of Crayon Motors, said, "This is an impressive and well-planned budget. The budget demonstrates the government's commitment to green growth. They have clearly stated that this is one of their top seven priorities. The extension of subsidies for another year, as well as lower duties on lithium batteries, are encouraging developments for India's transition to green mobility. The infusion of 9000 crores into the Credit Guarantee Scheme, combined with lower credit costs, is a much-needed boost for the MSME sector. References to ease of compliance, rationalisation, and digitisation will improve the ease of doing business even further. Overall, the budget has prioritised green initiatives, and we are excited to contribute to making the world a greener and cleaner place for everyone."
Anmol Bohre, Co-founder & Managing Director of Enigma, said, "It is really great to see how environmental sustainability has been one of the top 7 priorities in this budget. The Pro-EV budget focuses on much-needed initiatives such as Customs Duty reduction from 21% to 13% on capital goods and machinery required for Lithium Batteries and an extension of the subsidies on EV batteries for one more year. This will certainly encourage each EV manufacturer to contribute to Government initiatives to achieve mass EV adoption by 2030. This will also encourage investments in the EV sector which help new players to continue with innovation.”
Muzammil Riyaz, Founder of EVeium Smart Mobility, said, "In the last year alone, EV Sector has seen many ups and downs. At present, EVs contribute to only 2 per cent of the total auto sales in India and extensive support from the government is required to chalk out sustainable growth of the sector. To achieve the ambitious mission of e-mobility in India, initiatives announced in the Union Budget this year including - Customs Duty reduction from 21% to 13% on capital goods and machinery for Lithium Batteries, and an extension of the subsidies on EV batteries for one more year are going to help. These will certainly encourage each EV manufacturer to contribute to the industry initiatives to achieve mass EV adoption by 2030."
Anshul Gupta, Managing Director of Okaya Electric Vehicles, said, “The Union Budget 2023-24 is pro-development, with sustainable planning; energy transition for a cleaner tomorrow and inclusive growth through tech-enabled economy at its core. Moreover, the impetus on the EV sector in budget is quite encouraging for all Industry players. Drawing from its core, the decision to exempt Lithium-ion cells of custom duties for another year is a welcome move, as its majorly impacts the affordability of EVs in India. Furthermore, the viability gap funding announced to support the Battery Energy Storage Systems, along with a framework of Pumped Storage Projects, is designed to reduce the revenue required to recover costs and offer better returns, especially for the Private sector.”
Raj Mehta, Founder of Greta Electric Scooters, said, "While there is no major announcement for the EV sector, the Budget's focus on green growth involving energy transition, achieving the net zero target of 2070, is encouraging for the industry. Initiatives will not only help reduce carbon intensity but will create employment. Exemption of customs duty is another welcome move. Another element that resonated with me was the Green Credit Programme I believe this will add fuel to companies' endeavour to adopt green practices, and it will contribute effectively to reducing our carbon footprint. Finally, the reduction in Income tax slabs is definitely something to cheer about."
Tushar Choudhary, Founder & CEO of Motovolt Mobility, said, "The Union Budget for 2023-2024 has a strong focus on green growth and sustainability. The "Green Growth" priority sector is a step towards India's resolve to achieve Net Zero by 2070. The government has granted infrastructure status to the EV sector, paving the way for easier access to credit for companies making EV components. This will reduce production costs and help expand India’s manufacturing capabilities in this sector. The scheme announced to scrap old vehicles and replace the old polluting vehicles will encourage more people to switch over from petrol/diesel cars to electric ones. The Indian Government is committed towards introducing green mobility solutions such as e-rickshaws, e-bicycles, and other clean energy transport systems in cities across the country with an emphasis on green growth with a focus on green fuel. We are delighted to see such initiatives included in the Union Budget 2023."
Commercial Vehicle Manufacturers
Satyakam Arya, Managing Director & CEO of Daimler India Commercial Vehicles, said, “The FY 2023-24 Union Budget shows consistency and an intent for growth. The 33% increase in CAPEX outlay underlines the fact that the Budget is pro-growth and the increase is to step up on the 7% growth achieved in the previous fiscal. Main highlights which stood out for us as a commercial vehicles manufacturer was the eye on digitalization by leveraging 5G, which can help optimize costs and improve efficiency in the sectors it is implemented; the INR 19,500 crore outlay for green hydrogen development is a step in the right direction for the future of heavy-duty trucks and largely, the logistics industry; INR 35,000 crore for renewable energy transition projects is also an interesting initiative but how this pans out in the medium term will mark its significance; the PM Awas Yojana that is planned for boosting rural housing would create more jobs and bring more projects for the CV industry. We also feel that the concept of the Green Credit program can be beneficial if thought through and implemented well. Our overall view of the FY 2024 budget is that it is expansive and pragmatic. The budget clearly indicates a penchant for sustainable growth with a potential of aligning with long-term objectives. While the infrastructure push is a fiscal multiplier, it also gives the CV industry plenty of projects to look out for in the medium term. However, we were also expecting more on the National Logistics Policy, its strategy which was drafted exceptionally and we were eager to see it get implemented or at least have an outlay. A more specific mention on the continuity of the Scrappage Policy would have given a direction to the industry, not just for preparing to replace phased out vehicles with new ones but to encourage the proliferation of scrappage companies to expand their businesses.
There is no doubt that India’s economy is more resilient and can withstand headwinds coming from slowing global economies but execution of direction is important to set the country on the path to achieve more success. India is also a great opportunity for global investors to consider investing in our country, to enjoy the long term benefits of an economy that is getting stronger by the year. The FY 2023-24 Budget shows consistency but the near-term capital inflow is worth monitoring and improvising on in order to transform consistency into healthy momentum.”
Mahesh Babu, Chief Executive Officer of Switch Mobility, said, “The government’s focus on infrastructure with enhanced capex of INR 2.7 lakh crore for roads and highways and the budgetary allocation for vehicle scrappage, will certainly accelerate the growth of the CV market in India. Meanwhile, in the EV sector, the government’s move to provide customs duty exemption for import of specified capital goods and machinery required for manufacture of lithium-ion cells for batteries is a welcome move, that will play a vital role in making local cell manufacturing cost competitive in the long run. Additionally, green growth being one of the top 7 priorities, with an allocation of INR 35,000 crore, is a step in the right direction. This will not just aid economic growth but will also accelerate the growth of the auto industry, especially EVs, as the country transitions towards net zero by 2070.’’
Nishant Arya, Vice-Chairman of JBM Group, said, “We welcome this pro-growth Budget 2023 that is aimed at providing strong impetus to growth, job creation and will bring a major cheer to the middle class. More specifically, the budget aims to boost the domestic EV manufacturing sector with its decision to increase Customs duty on importing EVs. This is a reflection of the government’s larger move towards Green Growth.
Alongside this, we welcome the government’s decision to remove Customs duty on capital goods/machinery for manufacture of lithium-ion cell in EV batteries and extending the subsidy on electric batteries for another year. Significantly, EVs will now be cheaper. This will make a large contribution to not only green mobility but also to overall sustainability. This budget is true to its name, ‘1st Budget for Amritkaal’. The key highlights of the budget are ‘Infrastructure’, ‘Consumption’, and ‘Sustainability’. We appreciate the government’s decision of 33% hike in capex outlay at Rs. 10 Lakh crores which will set the ground for ‘New India’.
Further, it is also a good decision to extend timeline by 1 more year (upto 31/03/2024) for the incentive under concessional tax regime, under Section 115BAB as the cumulative impact of the persistence of the COVID-19 pandemic has resulted in some delay in setting up and the commencement of manufacturing or production by newly established companies.”
Vehicle Financing Company
Pankaj Gupta, CEO of Mufin Green Finance, said, "With lithium cost soaring up, an exemption on the Lithium- ion battery from Custom duty comes as a major relief. We belief the success of the green growth would be dependent on alternate storage and the Budget announcement of setting up a battery energy storage system with capacity of 4,000 MWh with aid of viability gap funding would further help in establishing India as an EV hub. But the most needed thing for EV penetration is EV financing which should be moved to priority sector lending."
Karmveer S Dhillon, Founder at Perpetuity Capital, said, “I am happy to share that the regulations and policies introduced in the financial budget 2023-2024 will help the automobile industry in India gain its momentum back. With the support of government policies introduced in the budget, the EV market in the nation will thrive multifariously. The finance minister introduced a prominent reduction in the various components of the EV market which will promote the sales of green automobiles, especially in the tier-2 and tier-3 cities of India, which are emerging as potential markets for the overall EV industry. As per the market analysts, the significant reduction announced on the import duty of battery cells will encourage the enhancement of the EV manufacturing domain across the nation. It is discernible that the current budget has introduced a plethora of incentives to enhance the utilization of clean energy in the nation. It is fair to state that the Union Budget with its niche announcements in the field of green energy intended to increase the adoption of EVs will help India accomplish the goal of Zero Carbon Emissions by 2070.”
Nehal Gupta, CEO at AMU Leasing, said, “The Union Budget ‘2023-2024 has been quite dynamic for the NBFC (Non-Banking Financial Company) and Green Energy sector. As per the industry experts, the honorable finance minister has strategically introduced the regulations which will ensure the financial inclusion of enterprises, and self-employment will be encouraged in the domain of clean energy. The framework will promote the inclusion of women and diverse groups of society to venture into EV mobility streams. It is good to see that GST on various EV components has been reduced which will strengthen the EV sector in tier-2 and tier-3 cities of India by promoting the inclusion of sustainable energy in the value chains. To further enhance the EV industry in the nation, the budget has introduced the green credit program to boost the individual and corporate capacity of sustainability and green awareness along with the strong capex spur of 30%. The exemption of the taxes introduced on the imports of cells and batteries will prompt the Battery Energy Storage system (ESS) growth. With the announcement of leverage on taxes for various MSMEs, the financial budget has encouraged various startups to venture into the EV domain.”
EV Battery Manufacturers
Pankaj Sharma, Co-Founder & Director of Log9 Materials, said, "The proposed Customs duty exemptions on the import of capital goods and machinery required for the manufacturing of lithium-ion batteries bring in a new lease of life for all battery manufacturers as it would help accelerate the country’s production capacity and also gives the much-needed momentum to the country’s vision to become self-sufficient in its EV needs."
Samrath Kochar, Founder & CEO of Trontek, said, "The budget is pragmatic and has taken the right steps towards advancing green mobility adoption in the country. Extension of customs duty exemption on Li-ion cells and removal of customs duty on imported machinery used for manufacturing Li-ion cells will bring down the cost of EV batteries thereby promoting EV adoption. Going forward, we are certain that the Government will also look at bringing a PLI scheme for battery pack manufacturers and also reduce GST on batteries to benefit the many MSMEs operating in the EV sector."
Nishchal Chaudhary, Founder of BattRE Electric Mobility, said, "The Union Budget 2023 increases the tax rebate limit on income from ₹5 lakh to ₹7 lakh. This will offer more disposable income with the salaried citizens and is likely to increase overall consumption and spends. EV is definitely going to be a beneficiary."
Allied Sector
Prashanth Doreswamy President and CEO of Continental India, said, "Keeping the big picture in mind, Union Budget 2023 addresses the need to strengthen India’s macroeconomic scenario and inclusive development. The budget has tried to strike a balance between fiscal consolidation and growth, by continuing its focus on capital expenditure and creating fiscal space by cutting revenue expenditure. In addition, it has eased the tax burden on the middle-income category consumers, promoting more inclusive recovery.
The goal of 2070 as the deadline for net-zero carbon emissions is ambitious, and to achieve this, the government has provided several direct and indirect benefits. The Green Credit Programme will encourage companies to take environmentally sustainable and responsible actions. Further, the government’s budget announcement to make EVs more affordable will encourage the growth of the EV segment bolstering investments and innovations in the space.
Announcement regarding scrapping and replacement of nine lakh government vehicles is a welcome move, which could account for nearly six percent of commercial vehicles and passenger vehicles sales. This may lead to incremental demand for the automotive industry by approx. 1.5 percent over next three years, considering a spread of three years to replace and likely to drive EV adoption. The government’s initiatives to encourage new-age technologies such as AI are welcome. This will galvanize an effective AI ecosystem and nurture a quality talent pool and will improve India’s competitiveness in the global economy.
The rebate on personal income tax will help increase consumers’ purchasing power and have a positive impact on the two-wheeler market and the entry-segment passenger vehicle market. With the automotive sector being one of the largest contributors to India’s GDP generating direct and indirect employment, the industry had more expectations from the Budget. Policy thrust on R&D and incentivizing R&D efforts would have opened new doors for the growth of the automotive sector".
Sumit Garg, Co-founder and MD of Luxury Ride, said, "The much-awaited anticipation around the Union Budget has come to an end. The policies chalked out for the automobile industry incurring increased duty rate is very unlikely to have any impact on the entry-level luxury vehicle segment. The condition of levying duty on engines with more than 3000cc petrol capacity will have a nullifying effect on the luxury cars as there are meagrely any cars in India exceeding the 3000cc capacity. Furthermore, the vehicle scrapping policy is an appreciative step on the part of the government. It comes as a silver lining that not just serves the novel cause of ushering towards a greener planet but at the same time, it will give an impetus to the surging demand for cars."
Girish Nagpal, CEO & Co-Founder of MetroRide, said, "Government's focus to encourage manufacturing of products locally will boost the national manufacturing infrastructure. It’s great to see a clear focus & plan to achieve the net-zero carbon emission target by 2070. The Green Growth initiative & announcement of Rs 35,000 crore for priority capital investments towards energy transition and net zero objectives are a welcome move. An outlay of ₹19,700 crore National Green Hydrogen Mission will reduce dependence on fossil fuel imports in the long run. Batteries are a key component in the sustainability sectors. Basic Import duty on goods and machinery used in the manufacture of lithium-ion cells has been waived which will encourage production of EVs & batteries locally and will benefit the ecosystem immensely. The current budget is well structured with provision for every sector. With proper allocation of resources, the future economic growth of the country seems promising."
Rajeev Singh, Partner and Automotive Sector Leader at Deloitte India, said, “Despite all the uncertainty globally, todays Budget is very progressive, future looking and should drive consumption. From Auto Sector perspective, the increase in outlay for Capital Spending, increase in spending on Infrastructure, setting up 50 new Airports, creation of 100 Transport Infrastructure projects, central support for replacing old vehicles should all drive demand of vehicles. Focus on Agriculture & Rural India are also all steps in reviving rural economy which impact 2W and entry level cars. Overall, the focus on Green India should also assist in transitioning of Auto Industry to Clean Mobility”
Rajat Mahajan, Partner at Deloitte India, said, "The custom duty on imported vehicles with invoice value less than $40000 has increased from 66% (incl cess) to 70% for CBUs and 33% (incl cess) to 35% for SKD. This can lead to increase in the end customer price within the premium and luxury segment. The ex-showroom price after loading top GST bracket for cars and accounting for margins, can go up by 1-2% if the OEM passes this in entirety. Similar impact will be seen in the imported (SKD and CBU) EVs . Global MNCs who are banking on buoyant consumer demand in the premium and luxury space will be affected. However, to ride on this revived demand most OEMs may decide to absorb this cost in the short run.
Pranav Goel, CEO & Co-Founder of Porter, said, “we applaud the extremely well-thought and positive development measures taken by the Government of India to further the roadmap for sustainable growth and incentivize the industry for adopting sustainable practices. The investment plan of INR 75,000 crore for 100 critical transport infra projects including the capital outlay of Rs 2.40 lakh crore for railways will enhance the multimodal logistics ecosystem, aiding the sector to be more streamlined.
We are elated with the move to expand the scope of Digilocker. With this, the KYC process will be simplified and the move to use Permanent Account Number (PAN) as a common identifier for all Digital Systems of specified government agencies will encourage an efficient maintenance system for enterprises and MSMEs moving forward. Moreover, with the revamped credit guarantee for the engines of our economy, MSMEs will have the right access to growth, thereby enabling the nation's growth.
The push for green growth in budget 2023, promoting green energy, green mobility including other sustainable initiatives will help in reducing carbon intensity of the economy and will provide for large green-scale job opportunities. Policy interventions like replacing the old polluting vehicle will pave way for efficient use of energy across the sustainable logistics ecosystem.
With India being the 3rd largest ecosystem for startups globally and ranking 2nd in innovation quality among middle income countries, the tax benefits for the startup community will play a pivotal role in shaping the high growth sector.”
Samarth Kholkar, CEO & Co-Founder of BLive, said "We applaud the finance minister’s endeavours in displaying the country’s serious inclination towards ‘Green Growth’; the allocation of Rs 35,000 crore towards achieving net zero goal and energy transition is a welcome move. Having said that, we were hoping that an extension of the FAME 2 subsidy would be announced at the Budget 2023-24. This scheme of the Government of India has been instrumental in promoting EV sales owing to the subsidy it offers to the end customers of two-wheeler EVs.”
Olivier Loison, Managing Director of Alstom India, said, “India’s economic growth rate is the result of a resilient economy and prudent fiscal policies of the government. The Union Budget for 2023-2024 continues its focus on this path and the commitment to ‘green growth’ approach, will further boost the economy. Infrastructure is the most critical aspect of any economy and the highest ever capital investment outlay of 10 lakh crores is most commendable. Combined with the enhanced capital outlay of Rs 2.40 lakh crore provided for railways, these steps will go a long way in upgrading infrastructure, assets, systems, and facilities by leveraging technology and promoting a sustainable approach.
More importantly, the government is promoting greater private sector participation in infrastructure and railways. This is critical for the growth of the sector as it will help enhancing accessibility and mobility, connecting people and communities, integrating markets, and facilitating trade, and generating greater job opportunities. We are glad to see the continued focus on infrastructure projects to improve connectivity and facilitate movement of goods and products across the country, will support in the development of indigenous industries, thereby contributing to the ‘Make in India’ ambition and making India ‘Aatmanirbhar’. This will lead to an uptake in sustainable and modern urban mobility solutions, like metros, in Tier II & III cities as well. To encourage logistics, we expect more impetus on freight movement by rail, which will create the demand for more electric locomotives of high horsepower, which will increase capacity and speed of goods transportation, while reducing emissions, to bring better efficiencies of scale and attain the vision of net zero emissions.
The National Hydrogen Mission will support India’s ambition of becoming the world’s first Green Railways, with a growing fleet of hydrogen-powered passenger trains. As the world’s first and only hydrogen train manufacturer with passenger service, we are following with great attention Indian Railway’s interest for hydrogen trains in coming years. Alstom would be glad to contribute to the transition to zero-emission solutions in India.”
Sudhindra Reddy, Co-founder of Turno, said, "We are happy to see systemic measures from the government for a faster adoption of electric vehicles. The Budget has extended customs duty exemption for the import of capital goods and machinery required for manufacturing lithium-ion cells for batteries used in electric vehicles. This will help lower the landed cost of EVs for end consumers. Furthermore, the budget has laid emphasis on the vehicle scrapping policy with additional funds being allocated for replacement of old vehicles. This will largely benefit the commercial vehicle segment by advancing the aid for sustainable and affordable options for EV transition.
Through the 'green power initiative', the government aims to move towards renewable energy alternatives which will further reduce the emissions from EVs on the road sourcing electricity from conventional sources. All these efforts will help our country achieve various SDGs such as combating air pollution, enhancing renewable energy and more."
Mridu Mahendra Das, Co-founder & CEO of Automovill, said, "Auto and auto service sector have been facing various challenges. In the current scenario when new age entrepreneurs are trying to explore businesses in unorganised sectors like auto services or similar, it becomes difficult to follow procedures of traditional business, as it comes at a cost, and you only have so much bandwidth in terms of resources. Therefore, we value a lot that the budget has taken the same into consideration and by reducing more than 39,000 compliance it has made an effort to add to the ease of doing business in India. Additionally, the tax benefits on their incorporation is being extended by another year and the carry forward of losses to set off against future profits will now be allowed for 10 years instead of 7 years, which is going to provide a lot of relief to startups."
Dhananjaya Bharadwaj, Co-founder and CEO of ParkMate, said, "The Budget 23-24 addressed by Finance Minister Nirmala Sitharaman reinforces the excellence of the Budget introduced last year. The Union budget correctly emphasised the need for a greater accentuation on innovation, research, and development, which are vital to India’s ambitious goal of becoming a $5 trillion economy. A special proposal to establish three AI centres will motivate entrepreneurs aiming to launch AI startups. Moreover, it is worth mentioning that the planned infrastructure target is aligned with broader environmental and social goals. Like the rest of the startup community, we fully embrace the Budget 2023"
Rahul Dhoot, Managing Director of Dhoot Transmission, said, "The automobile industry, which contributes a sizable chunk to the country’s GDP, has been given a futuristic thrust. The government’s focus on green and clean mobility and allocation of funds for replacing government vehicles will go a long way in transforming the automobile industry. The lifting of duty on lithium-ion batteries and the decision to scrap old polluting vehicles bodes immense growth for automobile manufacturers and will give a fillip to the electric vehicles industry which in turn will invigorate the components industry."
Nimish Trivedi, Co-Founder of Evera, said, "With the Budget 2023 focusing on seven main priorities or the "Saptrishi," and the "Green Growth" strategy being the key focus, it prioritises adopting green fuel, energy, and building practices to reduce carbon emissions and create a cleaner and greener tomorrow.
The budget has aligned with India's green visions by proposing a capital investment of Rs 35,000 crore in energy transition, net zero, and energy security by the Ministry of Petroleum & Natural Gas. The government also targets to reach an annual production of 5 MMT by 2030. Further aligned with the car scrapping policy mentioned in Budget 2021-22, the government has taken a step towards the better by replacing old government vehicles. This move also will profit auto companies, giving them new orders, increased output, and opportunities for job creation.
The finance minister Nirmala Sitharaman also highlighted the role entrepreneurs play in the economy. Today, the country has the third-largest startup ecosystem globally and is the second among middle-income nations in terms of innovation quality. We commend that keeping this in view, the government has proposed to carry forward losses on change of shareholding of start-ups from seven years of incorporation to ten years".
Lalit Singh, Chief Growth Officer of TelioEV, said, “Excited to see the budget's focus on green growth and the pro-EV initiatives, particularly the reduction of customs duties on lithium batteries and extension of subsidies for EV batteries. These actions will drive demand for electric vehicles and align with the budget's goal of promoting eco-conscious lifestyles. The policy to replace old, polluting vehicles will further accelerate the transition to EVs. Overall, a well-rounded, progressive budget that will encourage investments in the EV sector."
Suresh KV, President & Region Head of ZF India, said, “The 2023-2024 Union Budget is welcome and leads us towards a cleaner and more sustainable mobility solution for a greener and cleaner India. This budget highlights significant positive initiatives for the automobile industry through a slew of announcements supporting state government and municipalities in scrapping pollution-causing vehicles. The scheme makes way for faster electric vehicle adoption and helps transition to cleaner mobility in the long run. Along with that, the prioritization of green growth will aid all energy-generating sectors – wind, hydro and solar. The national green hydrogen mission, which was recently launched with an investment of Rs 19,700 crore will help the economy transition to low carbon intensity and reduce reliance on fossil fuel imports which would help guide the industry’s services toward smart logistics of the future. The increased outlay for infrastructure will also assist the transportation sector as a whole with a positive effect on logistics, light vehicles, industrial vehicles and commercial vehicles. At ZF we welcome this forward-looking budget that focuses on digitalization, green growth strategy and cleaner mobility solutions for India’s inclusive development”.
Sunil Puri, Managing Director - India & SAARC Operations of CASE Construction Equipment, said, “The bolstering of infrastructure development are among the seven priority areas in the union budget's proposal. With 50 new airports being targeted, INR 2.7 lakh crore being allocated for road infrastructure and INR 2.4 lakh crore for railways, the government is placing the right onus on infrastructure development, as it has in recent years. We are also enthused by the announcement of an urban infrastructure development fund and the opportunities presented for private investment in infrastructure through newly established Infrastructure Finance Secretariat.”
Rajeev Sharma, Chief Strategy Officer of Mitsubishi Electric India, said, "The budget 2023 is oriented to economic growth of the country. I am sure that 33% growth in capital expenditure will result in balanced development. This is a smart move since it will help the country achieve its goal of becoming a 5 trillion-dollar economy and a global powerhouse. I believe that the announcement of setting up 100 labs to effectively develop 5G services and the vision to promote Artificial Intelligence in overall industries is a strong step by the government. This will further lead to automation in the industries which will help in propelling India’s growth and promoting smart cities. The union budget 2023 has come up with positive announcements for different sectors to support the Make In India initiative and can result in balanced growth in the near future.
Kavan Mukhtyar, Partner and Leader - Automotive at PwC India, said, “For the Automotive sector, the Budget directionally has come in support of cleaner mobility with the electric vehicle industry to be the main beneficiary. Measures announced on scrappage policy, batteries and hydrogen projects are in line with the Government's commitment to net zero and reduced dependence on fossil fuels.”
Inderveer Singh, Founder & CEO of Evage, said, “The government's commitment to a ‘green growth’ approach is a step towards building a cleaner and more prosperous future for all Indians. It is encouraging to see the concerted efforts of the government to achieve the net zero target and its vision of Amrit Kaal – an empowered and inclusive economy. The government in its budget has taken some significant steps like increasing import duty on electric vehicles - aiming to promote domestic manufacturing going ahead, and income tax reprieve - allowing the consumers to have higher disposable income which in turn will facilitate greater EV adoption. However, we were hoping to see more support in the form of updated incentives and improved manufacturing assistance for the viability of EVs in the commercial sphere. There is a strong need for a government-mandated standard, defining the residual value for EVs. The absence of this standard is one of the biggest hindrances in acquiring affordable financing for fleet operators and commercial EV manufacturers. This would help accelerate the mobility revolution in our country and accelerate the manufacturing of sustainable, safe, and innovative automobile solutions for a greener future. India is at the precipice of scale and growth: manufacturing and sustainable mobility:
♦ With a nominal GDP of $3.8 trillion, India currently ranks as the fifth largest economy and has immense potential to scale the manufacturing sector and be the global leader.
♦ Until now we have been known as a service-led nation but with strong visions like ‘Atma Nirbhar Bharat’ we would soon tap into the potential to succeed in operations globally.
In line with the government’s vision we at EVage are creating indigenous products and constantly working towards reimagining mobility to transform lives and businesses. The future of India is bright for the coming decade, and now is the ideal time that we can scale and become the powerhouse of manufacturing for the world.
Gautam Khattar, Principal at Price Waterhouse & Co LLP, said, "While there has been a customs duty increase of 10% on imported vehicles (including electric vehicles), the effective increase is around 4% as the social welfare surcharge which was earlier levied on such vehicles has been exempted. Nevertheless, this should incentivise domestic vehicle manufacturing in a segment which is largely used by Indian consumers and is also climate friendly. How this increase impacts the ongoing FTA discussions, is however yet to be seen."
Amitabh Saran, Founder and CEO of Altigreen, said, “We welcome Budget 2023-24 and the government's dedication to promoting environmental sustainability, as stressed by Finance Minister Nirmala Sitharaman. The announcement of the extension of subsidies on Electric Vehicle batteries for 1 more year coupled with the decision to continue the concessional duty on lithium-ion cells for batteries for another year is helpful; however, we look to the government to extend these for 3 years to provide a stable policy environment for the industry."
Akshit Bansal, Founder & CEO of Statiq, said, "The union budget for 2023-24 will pave the way for the green empowerment of the country and reflects the progressive attitude of the government toward sustainable development. We welcome the vision of the government of India in establishing and boosting the focus on green growth. As India’s new budget envisions 7 priorities, green growth is among the top priorities of it. In its budget, the government has announced a large sum of Rs 35,000 crore to be allocated towards achieving the net zero goal and energy transition. The government has set its target to reach green hydrogen production of 5 MMT by 2030. This will encourage the private sector involved in green renewable energy-based products to expand their business and invest more in the business of green energy. The government’s green growth efforts will help in reducing carbon impact, promote green alternatives and create space for employment. It will enable the use of green-based products at a larger scale among the common public. The government’s green signal to green growth will give an edge to companies like electric vehicle manufacturers to market their products and enhance the opportunities for industry players to cater to their target audiences. This will also help in meeting the carbon offset program of various companies in the green sector.”
Raghav Arora,Co-Founder & CTO of Statiq, said, "The big push for artificial intelligence in the union budget 2023-24 signifies that the government is ready to go on a large-scale technological ride. This decision is going to prove constructive for existing and emerging startups. The government’s announcement of setting up 3 centres of excellence for artificial intelligence (AI) to research and develop cutting-edge applications in India will be a major breakthrough for tech-involved companies. These centres will be set up in top educational institutions where students will also learn new innovations in artificial intelligence, upskilling them to become experts in artificial intelligence and its related trends. It will create a space for potential employment opportunities as well. This move will cater to the government’s vision of ‘Make AI in India. Make AI work for India’. With the help of AI advancements, there will be an effective AI ecosystem in which companies can grow beyond expectations. In this system, leading industry players will contribute to conducting research and developing innovative solutions in different sectors"
Manav Kapur, Executive Director of Steelbird International, said, "Finance Minister Nirmala Sitharaman has tried to stimulate the auto sector of India with some smart moves in the Union Budget 2023-24. First of all, this budget paves a smooth path for the EV transition by extending the customs duty exemption to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles. Whereas measures announced for skilling and research in AI, Robotics, 5G, Mechatronics and 3D printing will trigger quality production across the sectors, and the auto components industry will also benefit from incorporating these cutting-edge technologies in various operations. On the other hand, the rebate limit on personal income tax has been increased from ₹5 lakh per annum to ₹7 lakh per annum; this initiative will directly affect the demand side with the better purchasing power of potential customers. Moreover, the announcement of replacing old government vehicles will further enhance demand for new vehicles. So, overall it is a smart budget where due attention is given to all the major sectors."
