This budget may help every Indian to own a car? Here’s how

For an industry that has already faced the brunt of demonetization and now facing ban on sale of 2000+ cc powered cars, it’s not easy to pull up its socks and perform out of the blue overnight. Yes, we are talking about India’s automobile industry. The importance of this industry cannot just be overlooked. Based on present statistics, this sector contributes 7.1% of overall GDP and almost 49% of the manufacturing sector GDP. One of the most important employment generators in India, automobile sector already has 32 million people working directly or indirectly. There are numerous factors that tend to be speed breakers of the growth of this industry. Among those are India’s stretched monsoon season, limited rural consumption, commodity prices and tax and regulatory policies of the government.

Will the Budget of 2017 will be able to address the major bumps on the growth path?

Dinesh Supekar of PwC India, a multinational professional services network, told Business Insider, “Since the government wants to keep a check on pollution along with the growth of the sector, it will be better if some regulations can be made to scrap off old vehicles plying on the road. An incentive based regulation is best for it. This will curb pollution drastically. New cars are mostly fitted with technologies that are at par with emission norms. Putting an end to plying of old cars will benefit in two ways. Firstly pollution will come down and along with that demand for new cars created. This will boost sell of new cars keeping a check on environment.”

“The shadow of demonetisation has affected car sales, much more so in the premium and luxury segments than the mass market ones. The upcoming budget can bring in relief for the automotive sector with further rationalisation of income taxes which would increase the disposable income in the hands of tax payers, especially the middle class. Also continued investment into road and city infrastructure is much needed, which will not only help car owners but is also a massive employment generator. Clarity on GST implementation and overall stable policy outlook will bring in the much needed optimism and positivity into the economy in general. People will be more prone to spending on larger items like cars when they have faith in long-term sustainable growth rather than on-the-spot announcements like the demonetisation one,” said Dhruv Chopra, Chief Marketing officer, Carwale, an authoritative source of new car pricing.

Another issue that this year’s budget needs to address is car hike. Already Maruti Suzuki and Hyundai have announced that they would be increasing the price of cars produced this year. “India is the third largest automobile market in the world, yet only 4% of the households have a car and 25% of the households have a two-wheeler and local public transportation is limited only to the metros. I really hope the budget actually paves way for millions of Indians to achieve the dream of owning a vehicle, going to a good school for education and facilitates transport independence,” said Sandeep Aggarwal, founder & CEO of Droom that deals in old as well as new car.

Shubh Bansal, Co-founder of Truebil, a marketplace for pre-owned cars told Business Insider, “Scheme for the exchange of cars older than 10 years will be good. Apart from that implementation of GST and low tax slabs, tax rebate not just for consumers but also for NBFCs providing loans to car buyers, increase in disposable income, excise duty reduction would boost the automobile sector.”