Budget 2022: Here’s what Auto Industry leaders said

Finance Minister Nirmala Sitharaman on Tuesday in her Union Budget 2022 speech announced a couple of measures to boost the Indian auto industry. These include steps like announcing a new battery swap policy to encourage electric vehicle adoption, opening up defence R&D to private players for auto component development.

The industry leaders welcomed and hailed the government for these announcements.

Vinkesh Gulati – President FADA said, “Union Budget 2022 seeks to lay the foundation for the next 25 years, from India@75 to India@100. With PM’s ‘Gati Shakti National Master Plan’, a Rs 100-lakh crore project for building comprehensive infrastructure in India, it will be a significant step towards path to development. The Budget has attempted to focus on each of the sectors and has also tried to stimulate the economy after the pandemic slowdown. FADA welcomes and supports the Government’s efforts & initiatives towards Electric Mobility. There is a clear emphasis on creative, sustainable & innovative business models. Battery Swapping & Energy as a Service (EAAS) will surely help accelerate the transition towards Clean Mobility. The development of special mobility zones for electric vehicles and promoting clean technology for public transport validate government commitment to E-mobility, which would boost confidence in the EV industry in terms of manufacturing, sales, and create a sense of assurance among customers.”

“The government’s plans for developing 25,000 kilometers of new highways will result in a push for infrastructure spending, which will result in an increase in Commercial Vehicle sales, as well as an addition of 2,000 kilometers of road under a new scheme known as ‘Kavach’ will be an additional benefit to the revival of this segment. With the extension of the ECLG scheme, it is a remarkable move by the government to support the MSME sector coming out of the slowdown caused by pandemics.”

“The rural India has generally been the key driver for entry level passenger vehicle segment & 2wheeler space. With government plans on 2.3 lakh crore direct payment as MSP to farmers, it will work as a booster for 2Wheeler, Tractor & entry level PV sector sales. However, an additional duty of rupees 2/ litre on unblended fuel from October 2022, could play a spoilsport for the already stressed 2W industry.”

Sohinder Gill, Director General, Society of Manufacturers of Electric Vehicles, said, “We welcome the measures announced by the honorable Finance Minister, today. The budget for 2022–23 gives a huge impetus to the electric vehicle (EV) industry. Introducing the battery swapping policy and recognizing battery or energy as a service will help to develop EV infrastructure and increase the use of EVs in public transportation. It would motivate businesses engaged in delivery and car aggregation businesses to incorporate EVs into their fleet. It will create new avenues for companies to venture into the business of battery swapping. Additionally, creating special clean zones will further accelerate the adoption of  EVs and spread awareness amongst the citizens. The move will benefit the whole segment, i.e E2W, E3W, E-cars, and buses.”

“The budget also provides attention to the need for skilled resources in the industry. Introducing new skill programs in ITI will bridge the skill gap that currently exists in the industry. The industry would be happy to work with the government to devise customized courses to meet the demands of the EV industry.”

“Overall, the budget aims at strengthening the whole ecosystem of the EV industry, which will spur the demand for green vehicles.”

Venkatram Mamillapalle, Country CEO & Managing Director – Renault India said, “We welcome the Union Budget 2022, which spells seamless growth for the Auto & Auto Ancillary industry in India. The government’s focus on ‘Aatmanirbharta’ will continue to provide impetus to build domestic capacities and push the agenda of ‘Vocal for Local’. The government’s focus on Battery Swapping policy to be brought with inter-operability standards and push for clean tech and electric vehicles will create the right ambient environment for EV introduction and overall harmonisation of the electric mobility aspiration of the nation. This move will prove to a giant leap for the nation in advocating introduction of cleaner propulsion technologies and will improve air quality and reduce consumption of conventional fossil fuels.”

“The government has laid emphasis for the development of the infrastructure within the country that will further help build capacities for the resurgence of the automotive sector in India and envisages Rs 20K Crore investment outlay in infrastructure projects, under the auspices of PM Gati Shakti that focuses on 7 engines of growth, including building the road transport network in the country. The National Highways network will be expanded by 25,000 km in 2022-23. Better roads will have a certain positive impact on the automotive sector. Finally, the government’s decision of strengthening the rural economy through a MSP payment of Rs 2.73 lakh crore along with other benefits with an objective of aiding the farming sector, will help increase the disposable income, improving the sentiment in rural areas and further improving the demand & aspirations of rural and semi-urban markets of India for personal mobility.”

Sandeep Kalia, Managing Director, Valvoline Cummins said, “With the budget announcement completed, we can see the emphasis on this year’s budget on wider adoption of Electric Vehicles for public as well as private use. While there are no immediate implications for the commercial automobile industry, the budget surely helps boost the EV segment that will help redefine the automobile industry in the medium to long run. With battery swapping being at the core, this year the aim is to increase EV battery production and development which will provide incentives to the private sector. This will help the auto lubricant industry in India to enter the EV markets as adoption and infrastructure will improve leading to more EVs on the road.”