Union Budget will stimulate faster economic growth
Battery swapping and Energy as a Service (EAAS) initiatives will help accelerate the transition towards clean mobility
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The Union Budget 2022 seeks to lay the foundation for the next 25 years, from India@75 to India@100. With PM's 'Gati Shakti National Master Plan', a Rs 100 lakh crore project for building comprehensive infrastructure in India, it will be a significant step towards path to development. The Budget has attempted to focus on each of the sectors and has also tried to stimulate the economy after the pandemic slowdown. The Federation of Automobile Dealers Associations (FADA) welcomes and supports the Government's efforts and initiatives towards electric mobility. There is a clear emphasis on creative, sustainable and innovative business models. Battery swapping and Energy as a Service (EAAS) will surely help accelerate the transition towards clean mobility. The development of special mobility zones for electric vehicles and promoting clean technology for public transport validate government commitment to e-mobility, which would boost confidence in the EV industry in terms of manufacturing, sales, and create a sense of assurance among customers.
The government's plans for developing 25,000 kms of new highways will result in a push for infrastructure spending, which will result in an increase in commercial vehicle sales, as well as an addition of 2,000 kms of road under a new scheme known as 'Kavach' will be an additional benefit to the revival of this segment. With the extension of the ECLG scheme, it is a remarkable move by the government to support the MSME sector coming out of the slowdown caused by pandemics.
The rural India has generally been the key driver for entry level passenger vehicle segment and two wheeler space. With government plans on Rs 2.3 lakh crore direct payment as MSP to farmers, it will work as a booster for two wheeler, tractor and entry level passenger vehicle (PV) sector sales. However, an additional duty of rupees two/litre on unblended fuel from October 2022, could play a spoilsport for the already stressed two wheeler industry.
(The author is president of Federation of Automobile Dealers Associations (FADA))
