Budget 2022: Auto sector expects incentives for EVs

The domestic automobile industry is looking for certain provisions from the government in the upcoming Union Budget 2022. It aims to incentivise stakeholders for future investments in the expansion of domestic manufacturing, new-age technologies and research and development facilities.

A survey conducted by Grant Thorton highlighted that 84 per cent of respondents expect direct exemptions and incentives for electric vehicles. On the other hand, 74 per cent of respondents said they seek financial support for start-ups, while 75 per cent want improved automotive research or development base.

Since the automotive sector contributes significantly to the Indian economy, the industry also seeks an improvement in the ease of doing business. Grant Thornton Bharat conducted a series of surveys across sectors. More than 1,000 respondents participated in these surveys across digital platforms.

Amid the ongoing global chip shortages, as much as 52 per cent of respondents said they need support in domestic chip-building capabilities from the government. However, 21 per cent is seeking support in investment in advanced semiconductor research and development.

The survey also showed that 55 per cent of respondents also see a hike in vehicles prices in the Union Budget. Saket Mehra, partner and auto sector leader, Grant Thornton Bharat said, "To make India a preferred manufacturing hub, some immediate measures and a long-term strategy are required."

"For a sector that contributes almost half of the industrial gross domestic product (GDP) and is experiencing disruptions due to the pandemic, as well as the advent of new technologies around electric mobility and regulatory changes, government support via Budget 2022 is required," he added.

The government may also focus on the sub-sectors of the automobile industry including electronics and passenger safety systems in the Union Budget, the survey showed. It also said that incentives for production capabilities and import substitution are the biggest concern for the automobile industry.

The majority of respondents (62 per cent) also said that there is a need for promising strategies to accelerate skill development in the automotive sector. It was followed by underlying knowledge of intensive programmes (27 per cent) and aggressive policy push (11 per cent).

Also read: Budget 2022: Lost money in market correction? here's what to expect ahead

Also read: Budget 2022: Insurance cos seek separate deduction limit of Rs 1 lakh for premium