In a decision which will ease the headaches of many in a struggling industry, Finance Minister Arun Jaitley today announced the extension of charging reduced excise duty till December 2014.
The Finance Minister stated that Revenue loss can be made up in the long-term as he hoped the Economy benefits from the extension in duty cuts. The earlier government in it’s interim budget presented in February, reduced excise duty on Scooters, Motorcycles and small cars from 12% to 8%, from 24% to 20% for mid-sized cars, 27% to 24% for large cars and from 30% to 24% for SUV’s. These figures will remain static for the next six months.
Mr Vikram Kirloskar, President SIAM, said, ““We are certain that the extension of the reduced Excise Duty will contribute positively to improve the buyer sentiment and would help in bringing about a sustained recovery in the automotive industry that has been languishing for over two years now. This will go a long way in bringing back growth, investments in the industry as well as encourage higher employment.”
He added,”On behalf of the entire automotive sector, I would like to thank the Government for their very timely and supportive role”.
Welcoming the new government’s announcement, Mr Sumit Sawhney, CEO & MD, Renault India said, ““The new government has shown a positive intent towards the growth of key sectors to revive the Indian economy. The Extension of Excise duty reduction for automobiles announced in February by another six months is a welcome move and a step in right direction by the government, fortifying its intent to support the progress in the auto sector. We would like the government to take a long term view to have a unified excise duty structure and look forward to further reduction in the duty”.
Mr Sawhney added, “Going forward the government will have to take concrete decisions to support the promotion of electric and hybrid vehicles for a better, cleaner India and also look at policies to check Emission and Fuel Efficiency norms, Fleet Modernisation and Scrappage policy for better environment conditions. This will provide the required impetus for the automotive sector which is a key driver for the overall economy / industrial growth. “
Mr Arvind Saxena, President & MD, General Motors India welcoming the announcement by the Finance Minister, said, “It’s a welcome decision and we hope the Government will extend it for the full year in the upcoming budget as the sector continues to be sluggish. We also expect the Government to announce other measures in the budget to revive the growth.”
Thanking the government on the announcement, President ACMA, Harish Lakshman, said, “ACMA welcomes the continuation of the reduced excise duty on automobiles until December 31, 2014. Considering the fact that the industry is yet to tide over the current challenging times, we hope that with this announcement will encourage automotive sales and thus benefit the component sector as well.”
Mr. Sunil Rekhi – Chief Financial Officer – Nissan India expressed his views stating, “We welcome the Union Government’s move to extend the excise duty concession on automobiles for an additional six months. We will continue to pass this benefit to our dealers and customers. However, the recent increase in freight cost, rising fuel prices, high interest rates and the weak monsoon forecast play a dampening effect in the overall economic growth and tough market conditions that is being faced by us.”
Meanwhile Mr. Shirish Kulkarni, Chairman DSK Hyosung, was quoted saying, “We at DSK Hyosung welcome this decision of extending excise duty roll back from 12% to 8% for two wheelers which is definitely a step in the right direction. The announcement of duty reduction earlier this year saw a marginal growth in the automobile industry. This new announcement will go a long way in enabling manufacturers to maintain uniform prices thereby fostering growth in the sector. We hope that the this roll back is not temporary and coupled with similar conducive measures hopefully announced in the upcoming budget enabling the sector to grow at 12-15% at least.