What The Auto Industry Heads Want From The 2011 Budget

Indian automobile industry contributed 10 percent towards the GDP and the expectations with the 2011 budget are high. The auto giants are worried over the possibility of government levying tax on diesel vehicles. Michael Boneham , president and managing director, Ford India expressed his views over the budget 2011.

What are your expectations from the Union Budget 2011-12 for the automobile sector?
Ans: We hope that the Finance Minister abolishes all the minor taxes, including entry tax and octroi and cess and make it as a single tax. India is moving towards GST soon, but a firm commitment from the Government is need of the hour. GST working has to be clearly spelt out to all the stakeholders and implemented in all States simultaneously. This will help the industry avoid any cascading effect of tax on any product.

Do you expect any further increase in the excise duty on automobiles like the 2% increase last year? Would the car prices be increased after the budget?
Ans: We would like to see a reduction of excise duty on large cars and utility vehicles. Ideally, all cars and utility vehicles should attract the same excise duty and other taxes, so that all segments would grow in a robust manner. We hope that the FM considers our long pending request.

What do you expect the budget to bring in for auto loans?
Ans: Given the alarming inflation rates, we hope that any fluctuation in interest rates are avoided as much as possible as that tends to build instability in consumer demand, it impacts consumer confidence and likely to have an adverse effect on buying patterns.

How do you see the petrol / diesel prices to be affected?
Ans: We hope that the FM does not overlook the fact that hiking petrol/diesel prices will automatically impact the prices of other commodities, including necessity items.

Do you think the budget would be a growth oriented one this year for you?
Ans: If some of the recommendations in terms of favourable tax structure, excise duty, auto loans and fuel prices are met, this will definitely prove to be a growth-oriented budget. Adequate impetus should be given to the development of infrastructure as well. While a lot of focus is now on infrastructure - roads, railways, ports, electricity and housing, India is yet to leapfrog to sustain the growth momentum. We must also focus on last mile connectivity issues in major cities as well as Tier II and III cities.