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    Budget Analysis

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    venkatpogaru
    The document discusses the key points from the Union Budget 2015-16 presented by the Indian government and its potential impact on the automobile industry. It notes that the budget aims to focus on governance, financial inclusion, and curbing inflation. It provides some tax relief to companies but increases import duties on commercial vehicles. While the allocation for electric vehicle promotion is small, infrastructure spending and rural credit boost are expected to help tractor and agricultural vehicle sales. Overall, the impact on the automobile sector is assessed to be neutral.

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    Budget Analysis

    Uploaded by

    venkatpogaru
    32 views11 pages
    The document discusses the key points from the Union Budget 2015-16 presented by the Indian government and its potential impact on the automobile industry. It notes that the budget aims to focus on governance, financial inclusion, and curbing inflation. It provides some tax relief to companies but increases import duties on commercial vehicles. While the allocation for electric vehicle promotion is small, infrastructure spending and rural credit boost are expected to help tractor and agricultural vehicle sales. Overall, the impact on the automobile sector is assessed to be neutral.

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    Union Budget 2015 Analysis

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    The document discusses the key points from the Union Budget 2015-16 presented by the Indian government and its potential impact on the automobile industry. It notes that the budget aims to focus on governance, financial inclusion, and curbing inflation. It provides some tax relief to companies but increases import duties on commercial vehicles. While the allocation for electric vehicle promotion is small, infrastructure spending and rural credit boost are expected to help tractor and agricultural vehicle sales. Overall, the impact on the automobile sector is assessed to be neutral.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    32 views11 pages

    Budget Analysis

    Uploaded by

    venkatpogaru
    The document discusses the key points from the Union Budget 2015-16 presented by the Indian government and its potential impact on the automobile industry. It notes that the budget aims to focus on governance, financial inclusion, and curbing inflation. It provides some tax relief to companies but increases import duties on commercial vehicles. While the allocation for electric vehicle promotion is small, infrastructure spending and rural credit boost are expected to help tractor and agricultural vehicle sales. Overall, the impact on the automobile sector is assessed to be neutral.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 11

    Budget Analysis

    Hyundai

    Economic Survey 2015


    FISCAL DEFICIT

    GROWTH

    REFORMS

    INFLATION

    CURRENT
    ACCOUNT
    DEFICIT

    India must meet its medium-term fiscal deficit target of 3 percent of GDP
    Govt should ensure expenditure control to reduce fiscal deficit

    2015/16 GDP growth seen at over 8 pct y/y


    Total stalled projects seen at about 7 percent of GDP, mostly in private sector
    Economic growth at market prices seen between 8.1 - 8.5 percent in 2015/16

    There is scope for big bang reforms now


    India can increase public investments and still hit its borrowing targets

    Lower inflation opens up space for more monetary policy easing


    Govt and central bank need to conclude monetary framework pact to consolidate gains in inflation control
    Consumer inflation in 2015/16 likely to range between 5-5.5 percent

    Estimated at about 1.3 percent of GDP in 2014/15 and less than 1.0 percent of GDP in 2015/16

    Peoples Wish list

    Rationalization of taxes is one key request. Implementation and speedy


    action on GST
    - Hyundai India
    lowering of interest rates, long term stability in excise duty structure and
    introduction of uniform tax structure
    - Honda cars India
    The consumer also has lot of favourable expectations from the Union
    Budget in terms of Direct Taxes which will give extra money in the hands of
    consumer and help revive the consumer sentiments.
    Rollback in excise duty, implementation of GST and introduction of a
    scrappage scheme
    -Renault India

    UNION BUDGET 2015-16


    Salient Features of Budget
    Focus on governance
    Financial inclusion and conquering inflation

    Ordinance for land acquisition, FDI in insurance, reform in coal sector


    FDI liberalisation in defence and construction

    Hassle-free business environment through non-adversarial tax regime


    Focus on curbing black money
    Merger of the Forwards Markets Commission with SEBI
    Decision on capital account transactions centralised with FM
    Revitalise PPP infrastructure

    "The credibility of Indian economy has been re-established. The world is predicting
    it is India's time to fly. We have turned around the economy. It is quite obvious that
    incremental change is not going to take us anywhere. We have to think in terms of
    a quantum jump.

    UNION BUDGET 2015-16

    5 Pros of the budget on the Automobile


    Industry

    GST implementation is expected to be a major boost for the automotive industry: Attract
    good investment in the sector and also create demand.

    Custom duty on import of completely built unit of commercial vehicles increased to 40% from
    10%: This will help the local manufacturers by stemming imports.

    Corporate Taxation cut to start from next year, trimmed to 25% from 30% for next year:
    Companies will have more money to invest.

    Rs 79,000 crore investment in infrastructure including construction of one lakh kilometres of


    new road will give boost.

    Investments and reform in agriculture will help farmers make more money thus boosting
    demand for automobile products in the rural market. Specially this will help the two-wheeler
    industry.

    5 Cons of the budget on the Automobile


    Industry

    Only Rs 75 crore allocated for electric vehicle manufacturing that is seen as a disappointment
    as the industry was expecting much more in this direction.

    There was no announcement for the automotive sector in specific.

    Nothing was offered to give boost to R& D in the automotive sector.

    Increase in service tax cess on the petroleum products will also hurt the industry.

    No announcement to correct the inverted tax structure. Some of the raw material attract
    more duty than the finished goods such as rubber, ally etc. This puts Indian manufacturer in a
    disadvantageous situation.

    Automobile Sector

    Allocation of INR 750 million to promote manufacturing of electric vehicles (EVs).


    Concessional customs and excise duties on hybrid and EV parts extended until
    March 2016. Given the limited resources of crude oil and the need to diversify fuel
    options, this move is commendable. Companies like M&M would benefit from this
    measure. However, the impact would not be significant now, as sales of electric
    vehicles are very low.
    Increase in customs duty on fully-built commercial vehicles (CVs) from 10% to 20%.
    Such significant increase in customs duty would give domestic players like Tata
    Motors and Ashok Leyland an advantage over their foreign counterparts. However,
    the impact would not be significant, as fully built commercial vehicles imports
    Farm credit target increased by INR 500 billion to INR 8.5 trillion. Higher allocation
    to rural financing agencies such as NABARD and RRBs, and to initiatives such as
    MGNREGA, micro-irrigation watershed programs, etc. Such move is likely to be
    favorable for tractor sales and sales of other agricultural vehicles. With more credit
    at hand and potential work under various schemes, demand for tractors from rural
    markets expected to go up considerably.

    The impact on automobiles will be overall neutral because of the budget.


    The budget has waived excise duty on electric and hybrid vehicles to
    encourage auto companies to invest more in green and environment
    friendly cars. It also tilts somewhat in favor of domestic players in the
    commercial vehicles segment

    Tax on royalty payments to foreign companies


    Tax on royalty payments to foreign companies reduced
    from 25% to 10%. The move seemingly aimed at
    promoting manufacturing within national boundaries
    under Make in India campaign.
    Niche Segment- Ambulance manufacturing:
    Reduction in excise duty on ambulance chassis from 24%
    to 12.5%. However, the move would not have significant
    impact on overall CV sales, as Ambulances form a small
    portion of this large segment
    Financing of trade receivables of MSMEs
    Creation of an electronic platform for facilitating financing
    of trade receivables of MSMEs will help improve liquidity
    of auto component manufacturers. Move supposed to be
    aligned towards providing ease of doing business.

    Hyundai Quotes

    Rakesh Srivastava, Sr. VP, Sales & Marketing,HyundaiMotor


    India Ltd
    We welcome Initiatives on ease of doing business, Enhancing the
    global competitiveness of the Indian industry, Skill development for
    creating employment in rural sectors mom, rationalization of taxes for
    GST rollout & enhancing social security. will be a marginal increase of
    basic duties. The service tax increase is not expected to have much
    impact on manufacturing, since there is a facility to offset it.


    Thanks

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