Union Budget 2023-24: Key takeaways for the Indian auto industry
Union Finance Minister Nirmala Sitharaman presented the Budget 2023 in Parliament today, and it promises several concessions to the auto industry. From focusing on green energy and the scrappage of government vehicles to making EVs cheaper, there is something to celebrate for everybody. Here's a list of the top announcements that will greatly benefit the auto sector. Take a look.
Why does this story matter?
- The Centre has decided to lay the foundation of India's future mobility systems, and this is quite evident from the budget presented today.
- While the government has an eye on electric mobility, it is surely betting on green hydrogen to be the winning horse.
- Even infra projects have not been forgotten, as they are key to keeping transportation systems running.
Old government vehicles will be scrapped
Auto manufacturers are likely to be happy as the Centre has decided to allocate more funds toward the vehicle scrappage policy. Sitharaman claims that the Union government will extend its help to the states so that they can scrap old government vehicles, including cars and ambulances, in favor of new ones. This will also aid in reducing air pollution caused by vehicular emissions.
Green hydrogen is the future
India aims to achieve net zero carbon emissions by 2070. To this end, the Finance Minister announced an allocation of Rs. 19,700 crore to the National Green Hydrogen Mission for the production of green hydrogen. Per government estimates, the production capacity should shoot up to 5 million metric tons within the next five years. Hydrogen-powered mobility in India is thus getting a fillip.
EVs will become cheaper
Sitharaman announced that the Centre is waiving customs duty imposed on goods and machinery necessary for manufacturing Lithium-ion batteries. A Lithium-ion battery is one of the most integral components in electric vehicles, and the government's step will give impetus to local manufacturing. As vehicles with more localized components hit the market, the prices will automatically go down.
Infra projects worth Rs. 75,000 crore are on the way
There is no need to pay customs duty on denatured ethyl alcohol anymore, and all cars have to be ethanol-material compliant starting April 2023. Regarding transport infrastructure, Rs. 75,000 crore has been sanctioned for 100 projects.
