Led by Bajaj Auto Chairman Rahul Bajaj, the automobile industry has praised Finance Minister Pranab Mukherjee's decision not to raise excise duty on vehicles in the Union Budget today.
"It is a good Budget. I congratulate Pranab Mukherjee for not raising excise duties on vehicles," Bajaj told PTI here.
"We are very happy the government has realised the importance of electric and hybrid vehicles also," he said, adding, "The automobile industry will continue to grow."
In the 2010-11 Budget, the Finance Minister had announced a 2% increase in excise duty on large cars and sports and multi-utility vehicles.
Maintaining excise duty at the same level will help boost sales volumes, Bajaj said.
Mahindra & Mahindra (Automotive Sector) President Pawan Goenka had a similar view, stating, "The Finance Minister has taken the right decision of not increasing excise duties on vehicles. It will help grow the industry further in the coming days."
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While presenting the Union Budget today, Mukherjee said the standard rate of excise duty will be maintained at 10%.
"Finally, the Finance Minister has realised that hike in excise duties will result in lower demand for auto industry," Atul Auto Director Vijay Kedia said.
"It is a practical Budget. The Minister has also allotted more funds for infrastructure development schemes, which would help to boost the auto sector, specifically commercial vehicles," he said.
The government today also proposed the establishment of a National Mission for Hybrid and Electric Vehicles to encourage the manufacture and sale of alternative fuel-based vehicles.