Budget reaction 2013: Hindustan Motors
The auto industry has been the worst affected by the ongoing economic slowdown. The current fiscal has registered virtually no growth in the car segment. No wonder, hike in excise duty on SUVs from 27 per cent to 30 per cent has come as an unexpected blow. The last budget too had witnessed excise on SUVs going up from 22 per cent to 27 per cent. The auto industry was expecting reduction in excise across all vehicle segments to combat the current crisis. The 10-year Auto Mission Plan has also been talking of a favourable excise regime for the industry. Notably, cut in excise duty from 12 per cent to 8 per cent had helped the auto industry in somehow bearing the brunt of the 2009 downturn. Nothing of the kind has happened this time. Thankfully, the excise hike is limited to SUVs.
The finance minister has, however, given hope to the auto industry by allocating Rs. 14,873 crore to Jawaharlal Nehru National Urban Renewal Mission (JNNURM) which will lead to growth in public transport. Companies in the commercial passenger vehicle segment should benefit. The move is also in line with the socio-economic reality of the country. One hopes that the finance minister will offer some incentives specially for smaller automobiles, which form the bulk of total auto sales, before the budget is eventually passed. The auto industry is amongst the biggest employers and tax payers. It cannot be allowed to languish for long.