Union Budget 2024: Auto Industry Anticipates More EV Incentives

An industry body representing India’s top automakers expects Finance Minister Nirmala Sitharaman to unveil more EV incentives during the presentation of the Union Budget 2024–25 on July 23.

Among the budget expectations is the introduction of the FAME-III subsidy scheme for yet another push to the nascent and stalling electric-vehicle industry in the country. FAME is short for Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles.

"We expect the government to continue its focus on capital expenditure, while maintaining fiscal policy," Vinod Aggarwal, president of the Society of Indian Automobile Manufacturers, said during a media scrum in New Delhi on Friday. "Any budgetary push for the rural economy will also be a plus for the auto sector," he said, amid expectations that the government would do more on the vehicle scrappage policy.

On the flip side, the country's apex dealers lobby has its own set of expectations from the Union Budget. The Federation of Automobile Dealers Associations appealed to the government to consider two key measures in the upcoming budget to stimulate the automotive industry and broader economy.

"Firstly, we urge the finance ministry to introduce the benefits of claiming depreciation on vehicles for individuals paying income tax," FADA President Manish Raj Singhania said in a statement.

The FADA is also seeking a reduction of corporate tax for limited liability partnerships, proprietary and partnership firms.

While the government has already reduced corporate tax to 25% for private limited firms with a turnover of up to Rs 400 crore, extending this benefit to LLPs, proprietary and partnership firms is crucial, as most traders within the auto dealership community fall into these categories.