'Budget 2014 brings 4 advantages to Cars'

Narendra Modi-headed Indian government presented the 2014-15 union budget yesterday. For the automobile industry, there wasn’t much to it, except that the interim budget's excise duty cuts are retained till December 2014 and the long-due Goods and Service Tax (GST) also saw a 'Go Ahead' from the finance ministry. Additionally, an allocation of INR 37,880 crore for the expansion of road network including National and State highways across the country, would leave a positive impact on the automotive manufacturing industry in the long term.

You will get better roads to drive on!

Building better roads-highways and infrastructure will help logistics and transportation in the country. An investment INR Rs 37,880 crore, which includes INR 3,000 crore for the North Eastern region has been provided. Target of national highway construction of 8,500km has been aimed till the end of the on-going fiscal. The bottom-line is that you get nicer roads to tread on, and roads where there aren't any.

Cheaper cars with better quality!

A 15 percent investment allowance has been sanctioned for a three-year period to the manufacturing SMEs that aim to invest more than INR 25 crore in plant and machinery. This move will encourage automotive SME's (mainly the auto-part suppliers) in the country and will enable global auto companies to localise its operation more easily. Now these SMEs manufacture multiple components that are currently in your car. Hence investing in these companies would improve product quality, labour conditions and also decrease prices of components. Also will ultimately help the buyer to get cars on better prices, or even spares at lower rates.

Pay less for smaller cars!

The biggest sigh of relief for the auto industry and even for the consumers, came in the form of continuation of excise duty perks till coming December, which were proposed in the month of February. These cuts proved out be a boon for the drowning sales, and the last month's performance also hinted at signs of recovery. Hatchbacks, compact cars and mini SUVs get more affordable for the masses.

GST will help acquiring taxes!

Committing to expeditiously rolling out Goods and Services Tax (GST), Finance Minister said a solution to the issues relating to the comprehensive indirect tax regime may be finalised in the current year itself. The GST regime aims at subsuming most of the indirect taxes at the central as well as states’ level. This would streamline tax administration and avoid harassment of business and result in higher tax collection both for centre and states.