With Union Budget 2022-23 right around the corner, automobile industry is expecting certain provisions from the Indian government that will incentivise stakeholders for future investments in expansion of domestic manufacturing, new age technologies, and research and development facilities. To throw light on the market sentiments and better understand the expectations from Union Budget 2022, Grant Thornton Bharat presents its pre-budget expectation survey for the automotive sector.
Commenting on the survey findings, Saket Mehra, Partner and Auto sector leader, Grant Thornton Bharat said, “To make India a preferred manufacturing hub, some immediate measures and a long-term strategy are required. For a sector that contributes almost half of the industrial gross domestic product (GDP) and is experiencing disruptions due to the pandemic, as well as the advent of new technologies around electric mobility and regulatory changes, government support via Budget 2022 is required.”
The survey identified aspects like acceleration of skill development, import substitution, incentivization to foster electric vehicle sales, diversifying sources of finance and building supply chain resilience as some of the key expectations from the upcoming budget. 55% are also expecting a rise in vehicle prices. For 45% respondents, diversifying sources of finance (45%) and focusing on privatisation to drive investments (41%) can help the government effectively to plan and monetise steps towards better infrastructure.
- More than half the respondents (52%) expect aid in domestic chip building capabilities to futher push the country’s Aatmanirbharta quotient.
- 44% feel that electronics as the sub-sector of the auto industry, is likely to receive the greatest thrust this Budget.
- Since the automotive sector contributes significantly to the Indian economy, the industry also seeks ease in doing business. 75% respondents feel that the Budget would focus on improving automative research and development base in India.
- 62% are of the opinion that incentives towards building new-age skills would accelerate skill development in the sector.