So, on 5th July, we will see many changes in the Budget 2019. But, will this affect the automotive sector or will cars and bikes get cheaper?
As the date for the budget is nearing, every industry and sector is waiting for some relief to them. Talking about the automobile sector, the sales have been sluggish and down by 11% for some time now.
The complete automobile industry is in the hope that Finance Minister Nirmala Sitharaman and her team will do something for this industry to improve the sales, that have been declining for the past few months.
The first question that arises is that will the budget 2019 make cars and bikes cheaper? SIAM has reportedly confirmed that the entire industry want lower GST rates in this budget. Currently, vehicles attract a GST of 28%, which should go down to 18%.
This initiative will help in improving the sales of automobiles and also will increase the demand for the same. The lesser the customer has to pay from his end, the more he will buy.
As we all know, the topic of EV cars and bikes is trending for the Budget 2019. We can expect the GST on EVs to be lowered as well, which will in turn reduce their prices. An EV is priced more than double of its petrol-powered version.
Recently, reports came in suggesting that the government might scrape off petrol and diesel-powered vehicles by 2025-2030, in a bid to support full electric vehicles in India.
Currently, EV components attract GST of 18%, which auto makers demand to be lowered to 12%. This will encourage people for buying EVs and also lower the prices of the same.
Also, the industry desires to see a faster process of EV infrastructure in India. Automakers are scared of the 2025-EV deadline as well as poor electric vehicle facilities in India.
Non-Banking Financial Companies (NBFCs) recently were in a crisis, which led to increasing in the interest rates and problems in the liquidity funds. If liquidity is easily available to these companies, they will be able to raise funds at a lower cost and thus loosening the interest rates by a bit.
For commercial vehicles, SIAM has asked the government to increase the customs duty from 25% to 40%, in a bid to encourage local manufacturing. With all these changes, we expect cars and bikes and EVs to get a bit cheaper.
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