MUMBAI, Jan 18 (The CONNECT) - The auto industry, including the MSMEs and forging industry, expects a good, progressive, and balanced budget due to the rough patches the industry has seen with current chip shortages and the pandemic, says Yash Jinendra Munot, Vice President, AIFI (Association of Indian Forging Industry). One should keep in mind that the industry has not fully recovered from the COVID shocker, having made heavy investment for BS-VI implementation.
As the industry faces a large cash flow block with some value-added products at 28%, this budget should consider rationalisation of the GST rates, which should be uniform at 18%, he says. Additionally, import duties on steel should be reduced to meet the current shortfall and competitive Indian steel prices. Furthermore, as part of the 'Make in India' initiative, Indian companies should be eligible for a benefit on the Duty structure, Munot says.
The government has made continuous efforts to simplify and streamline Indian tax laws, and the industry anticipates consistency in tax and regulatory policies, as well as their interpretation, this year. To achieve Industry 4.0, funds should be allocated through FDI schemes and new investment allowances to encourage investment in technology. “We also anticipate that the scrappage policy, which is currently being held up by the finance ministry, will be passed to boost demand in all segments of the auto sector while achieving pollution goals. Thus, incentives for scrapping old and purchase of new vehicles should be implemented quickly,” Munot adds.
Ashwath Ram, Managing Director, Cummins India Limited says “India must continue its multi-year spend on infrastructure to sustain growth. We cannot slow down spend even if it is slightly inflationary in the short term.”
He calls for increased support for manufacturing “as we are still reeling under the effects of Covid-19 to sustain long term growth and capital buildup”. Liquidity is important for manufacturers to get low-cost capital to invest in equipment for growth. Exporters also need to be encouraged by SEZs coming into Remission of Duties and Taxes on Exported Products (RoDTEP) and the rates of payouts from the schemes to match the actual double taxations costs.
Manufacturing of electrolyzers for H2, H2 in ICE and Flex fuels engines production equipment should come under the PLI scheme. Further, exports focused projects in Manufacturing need some incentives for better scalability and business sustainability, says Ram.