Budget should support auto manufacturers with tax rebates

The genuine market players have been plagued with multiple excise duties, cesses and taxes. The sector is looking at a favourable budget which tackles this issue providing relief to not only the buyers but also the genuine providers. The automobile industry should benefit from a complementing duty regime under GST so as to ensure easy interpretation of the laws by the officers from the customs and taxation departments. This will lead to an increased focus on modernisation by the market players. 

With the world moving towards newer technologies, India needs to start innovating with higher efficiency and increased productivity. These things are only possible if the government policies are framed keeping in mind the players that exist in the market. 

Price sensitivity of the Indian consumer, cost optimisation needs of market players and increasing focus on environmental concerns will drive critical changes in the market. With the increasing demand for customisation comes the challenge of managing diverse product lines, with multiple product feature variants. This results in huge investments in technology, manpower and infrastructure. The government has an open opportunity to offer incentives and benefits to such manufacturers and innovators. 

The car infotainment industry in particular invests a lot in technology, manpower and infrastructure in advance to manufacture consumer friendly products. The entire process takes anywhere between 2-3 years, and the hardware rollout goes on for much longer. The new budget policies should be able to support the effort put in by such manufacturers in terms of tax rebates or subsidisation. 

Being ranked the sixth largest country in the world and accounting for 7.1 percent of national GDP, the Indian auto industry still has a lot of scope of improvement and growth. While the budget 2017 should focus on improvement in customer mindset, there should also be market player friendly policies which will make the entire process of innovation within reach especially for the genuine service providers.  

A proper approach towards demonetisation leading to an increase in disposable income, easy interpretation of laws, tax rebates and subsidies for the sector for innovation and production are the core things one should expect from the Union Budget 2017. 
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Pankaj Jagwani is the director of Blaupunkt India