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Budget 2024: Green technology, vehicle scrappage aid; automotive sector wish list | Budget 2024 news

Posted on by darion

Budget 2024: While presenting the interim budget, Nirmala Sitharaman emphasised that the central government is keen on expanding and strengthening the e-vehicle ecosystem

automotive components industry, cars, automotive components, vehicles, car manufacturers
Experts are confident that the Center will announce the Fame III program. (Illustration)

Nisha Anand New Delhi

Union Budget 2024: The final countdown to the Union Budget 2024-25 has begun with just seven days left. Various stakeholders met Finance Minister Nirmala Sitharaman during pre-Budget talks, sharing recommendations and reforms for their sectors.

During the presentation of the interim budget on February 1, Sitharaman emphasised that the Centre is keen on expanding and strengthening the e-vehicle ecosystem, which is also one of the key expectations of stakeholders.

Here’s what the automotive sector expects in the 2024-2025 budget:

1) Experts believe the Centre will announce Fame III, a programme aimed at supporting electric vehicles. The Accelerated Adoption and Production of (Hybrid and) Electric Vehicles (Fame) policy is a scheme under which the Centre offers financial incentives for the purchase of certain electric vehicles. Fame II expired on March 31.

2) Ahead of the interim budget presentation, Mercedes-Benz India Managing Director and CEO Santosh Iyer emphasised on the importance of continued capital expenditure on infrastructure projects, which will help the sector.

“Green mobility policy should remain a key focus for the government, encouraging faster adoption of electric vehicles,” he noted.

3) Auto industry body SIAM has demanded additional incentives for scrapping vehicles. In a bid to fuel a green economy, Sitharaman had said in the previous budget that there was enough funds to scrap vehicles older than 15 years.

4) Stakeholders will also be watching to see if the Centre addresses the issue of exempting petrol and diesel from the Goods and Services Tax. The auto industry is eyeing the reform, hoping it will boost consumption. The oil and gas sector is also pushing for the inclusion of petroleum products under the GST, a matter that is mostly opposed by state governments. While decisions related to GST are vested in the GST Council, any hint on the matter from the ministry in the budget could be a positive sign.

5) Industry leaders are also seeking greater incentives for hybrid vehicle models. Moreover, a uniform GST of 18 percent on all auto components is one of the long-standing demands of the sector.