Budget 2016 Impact: Tata hikes prices by up to Rs 35,000

Following the announcement of the Union Budget on Monday, Tata Motors has decided to raise the prices of its passenger vehicles by up to Rs 35,000. The price rise, which comes into effect immediately, has been brought into force to combat the infrastructure cess proposed in the latest edition of the country’s budget. Depending on the model, variant and trim, the price change will vary from Rs 2,000 to Rs 35,000.

The 2016-17 budget left a bit of a bitter aftertaste for the automobile industry as several demands like the reduction on excise duty were overlooked. In fact, just like we had deduced from the budget on Monday, the proposals are, conversely, set to deter the cause of the automakers and in turn the car-buyer.

Small petrol, CNG and LPG cars will have an additional 1 per cent of infra tax whereas diesel cars with smaller cubic capacity will get a 2.5 per cent infrastructure tax. Diesel and petrol cars with a higher cubic capacity will be charged with a 4 per cent infrastructure tax, making them even more expensive than they are today.

And to top it all, an extra one per cent tax on all luxury cars above Rs 10 lakh, in a supposed move to curb pollution, was also proposed by the FM.

Confirming the news, a Tata Motors spokesperson said to a website, “In line with the cess levies from the Budget announcement, we are increasing the prices of our passenger vehicles with immediate effect.” The Indian manufatcurer’s portfolio in India ranges between Rs 2.04 lakh and Rs 15.79 lakh (ex-showroom Delhi); starting from the entry-level small car Nano, going up to the premium crossover Aria.

Elsewhere, the country’s second largest car manufacturer Hyundai Motors India is also planning to push its prices by up to Rs 80,000 while Honda Cars India has also announced its plans to hike its car rates by a similar amount.