Budget 2015-16: No direct impact on automotive industry

The 2015 -16 budget has had no direct impact on automotive industry at large other than an announcement in the EV segment. 

"However, increasing disposable income in rural areas will improve penetration of passenger vehicles and two wheelers," says Rajeev Singh, Head of Automotive Sector, KPMG in India. 

Singh adds that credit of 8. 5 lakhs to farmers announced in the budget 2015 will indirectly boost the agricultural equipment and tractors segment. The government is aligning to ensure at least 1 family member will have an economic route to support the family indirectly, this would improve the sentiments of entry level two wheelers.

Investment in infrastructure will go up by Rs 70,000 crores. Revitalization of PPP model of infrastructure, development of 1 lakh kilometers of new roads will have an impact on commercial vehicles which has had a negative growth last year.

Later in the budget, the government proposed allocation of 75 crores towards electric mobility to move to next level of clean technology. The industry can only be hopeful that this would boost the consumer confidence. However, lack of EV infrastructure in India will make it difficult for the segment to move at a fast pace.

The government did not make any big bang announcements but stable investments made across agriculture, infrastructure, manufacturing, various segments of the society, etc. is focused towards a steady growth.