SIAM's Reaction To 2013 Union Budget

Updated: Friday, March 1, 2013, 11:14 [IST]

Society of Indian Automobile Manufacturers (SIAM) President, S. Sandilya has welcomed the union budget presented by the Finance Minister saying, under the present difficult economic situation the decisions taken are the need of the hour and will facilitate growth. He particularly praised the announcements concerning reintroduction of investment allowance and focus on infrastructure.

He did however, have a concern regarding Goods and Services Tax(GST), which have still not been clearly defined and commented that the auto industry was looking forward to full implementation of GST.

Another announcement appreciated by SIAM is the allocation of additional funds under JNNURM scheme, which will aid in purchase of up to 10,000 buses. Furthermore, the Finance Ministry has accepted a proposal sent by SIAM concerning lowering of excise duty on commercial vehicles (CV), from 14 percent to 13 percent.

Yet another SIAM recommendation which the Finance Ministry has accepted is about extension of concession for import of electric and hybrid electric vehicle parts till 31st March 2015.

The SIAM is not too concerned with the announcement to increase duty on luxury cars and bikes as it understands the decision has been taken to raise more revenue and to encourage local manufacturing, value addition and employment.The same goes for increase in custom duty on importing used cars, which clearly conveys that India is not ready to accept second hand old vehicles from other countries.

However, the main area of concern is the excise duty hike for passengers cars and SUVs. SIAM had recommended reduction of excise duty for passenger cars by 2 percent, which could have led to significant improvement in sales. While the price increase of SUVs will dampen sales and impact market sentiments further.

Mr. S Sandilya thanked the Finance Minister for accepting SIAM's recommendations and hoped for speedy implementation of policies.