The Union Budget 2021 was revealed by Finance Minister Nirmala Sitharaman on 1 February. The budget aimed at a post-pandemic economic recovery and the automotive sector was one sector that was feeling the bite of a slowdown even before the virus changed life as we know it. The budget introduced some crucial policies for the automotive sector that are expected to work in favour of both the consumer and manufacturers.
The EV sector in the country is still in the nascent stage and it needs all the support it can get from the government. Here’s what a few EV startups think about the Budget 2021.
Dr. Irfan Khan, Founder and CEO of eBikeGo
“We at eBikeGo are very thrilled with this Union Budget 2021. This budget is totally one of its kind. We thank the Hon’ble Finance Minister for announcing the Scrappage policy, which would help in encouraging the adoption of greener vehicles. Setting aside an amount of `2,217 crores for 42 urban centres with a million-plus population is a good move. The fund could be utilized to spread awareness about the benefits of using e-vehicles to the environment and its contribution to make the air clean. The government’s plan for strengthening the public transport sector under PPP models with an outlay of ₹18000 crores for operating 20000 buses is encouraging for the EV industry. This scheme will boost the auto sector and provide jobs for our youth. It will also create ease of mobility in our cities,The scheme could strengthen the EV industry if more e-buses could be supported through the scheme. In this budget a capital investment of Rs5.54 trillion in developing infrastructure around the country has been announced, which is expected to boost the demand for heavy and medium commercial vehicles”
He added, “The voluntary vehicle scrappage policy announced to phase out old and unfit vehicles will encourage the sales of new vehicles. It is good to see that the government is looking at addressing the concerns regarding GST inverted duty structure. We look forward to more details on the inverted duty structure and the Production-linked incentive (PLI) scheme announced by the Finance Minister.”
Tarun Mehta, Co-founder & CEO, Ather Energy
“The voluntary vehicle scrappage policy announced to phase out old and unfit vehicles will encourage the sales of new vehicles. It is good to see that the government is looking at addressing the concerns regarding GST inverted duty structure. We look forward to more details on the inverted duty structure and the Production-linked incentive (PLI) scheme announced by the Finance Minister.”
Suhas Rajkumar, Founder, Simple Energy
“The auto and EV industry welcomes the Union Budget 2021. The voluntary vehicle scrapping policy for CV and PV is a great move by the Government. It will push the mindset of people to adapt to cleaner commute and open the market for brand new vehicle infusions which can be EV and help the manufacturing industry to grow. It will also help in promoting fuel-efficient vehicles and reduce overall pollution in cities.”
He added, “Some good initiatives include a reduction in customs duties on certain auto parts, and not to forget the extension of tax holiday for startups for one more year. Assurance to smoothen the GST with removal anomalies like the inverted duty structure will certainly support a lot of businesses.”
Ms.Bunisha Khajamohideen, Co-Founder, Terabite Ekarts
“It’s good to know that our government supports the auto sector with its scrapping policy, which in turn helps people move towards green vehicles. Also, the announcement on tax incentives for start-ups is absolutely welcoming. Auto/EV startups that cater to masses like street vendors will provide more relief to the society at large, thus making them self-reliant, also contribute to Atmanirbhar Bharat initiative.”
Jeetender Sharma, Founder & Managing Director, Okinawa Autotech
“The Budget 2021-22 effectively sets the roadmap for the next five years with a slew of measures for overall economic growth. We are glad to see the government’s continued focus on Atma Nirbhar Bharat and Make in India. The increase in customs duty on automobile parts will rightly encourage domestic manufacturing. We are thrilled to see the highest ever CAPEX of Rs. 1.08 trn for the Ministry of Roads. Evidently, the budget comes with an increased focus on strengthening the infrastructure of the country, which is a welcome move. Furthermore, the commitment of ₹1.97 lakh crore for PLI schemes covering 13 sectors, also comes as a cheer for the industry. All in all, the budget is definitely rewarding.”
He added, “The pandemic has had an inevitable impact on the Auto industry and we were also expecting the government to look at reducing the GST and reconsider the current taxation framework applicable on raw material and the final product in case of EVs which could have provided the much-needed impetus to the industry. The government could have also looked at aggravating the domestic demand by further incentivising individual and commercial consumption of EV pan India. Nevertheless, we are ever so optimistic and certain that this fiscal year will unfold immense growth opportunities and we are geared up for the same.”