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The Union Budget for the financial year 2022-23 was presented by the Finance Minister of India, Nirmala Sitharaman, on February 1, 2022. Talking about the Indian automobile industry, there was a lot of expectations from the Budget 2022. The Modi Government made several major announcements regarding the automobile sector and in this article, we will be sharing with you their key takeaways. Here’s how the Budget 2022 will affect the Automobile Industry in India.
The Finance Minister of India made several key announcements for the all-around development of various sectors. But, when it comes to the automobile industry, the proclamations were quite limited that will directly impact the sector. The government presented an expected roadmap for the infrastructural development of the country as well as to boost the adoption of green mobility.
Here’s how the Budget 2022 will affect the Automobile Industry in India:
New Battery Swapping Policy: This is probably the biggest announcement for the automobile industry in the Union Budget 2022. The Indian government has revealed that a new Battery Swapping Policy will be introduced soon. If implemented properly, this might benefit the entire EV ecosystem in India at large. This move will allow the companies to set up battery swapping stations. Moreover, the OEMs can plan to sell their products at affordable prices using BaaS (Battery as a Service) policy.
Rs 20,000 Crore for Infrastructure Development: The Union Finance Minister of India has announced that Rs 20,000 crore has been allocated for infrastructure developments. This will help to boost the economy of the country and will result in fast & efficient movement of people and goods. It is also expected to create a good demand for heavy commercial vehicles in India.
EVs in Public Transport: While the Indian government didn’t make any major announcement to push the sales of private EVs in India, the Finance Minister has encouraged clean & electric vehicles in the public transport sector. This move is expected to help the electric bus and electric LCV (light commercial vehicle) manufacturing companies. However, there won’t be any major impact on the overall EV industry.
Defence R&D Now Open to Private Players: In a bid to push private-public participation in the defence sector of India, the Indian government has allowed the OEMs (Original Equipment Manufacturers) to make bids for supplying auto components to the defence sector. It is worth noting that companies like Tata Motors and Mahindra are already working with the Indian defence sector since a long time.
Rs 2.73 Lakh Crore for Rural Markets: Finally, the last major announcement in the Union Budget 2022 that will directly or indirectly impact the automobile industry is the new MSP formula. The government has announced a Rs 2.73 lakh crore MSP (Minimum Support Price) payment along with other benefits to boost the vehicular demand in the rural markets, which include the sales of commuter two-wheelers, affordable cars and farming equipment like tractors, etc.
What are your thoughts on these announcements made by the Union Finance Minister for the automobile sector? Do let us know in the comments section below. Also, you can connect with us on our social media platforms, The Unbiased Blog, The Automotive Blog, and Nikhil Chawla, for all things tech and auto!