New Delhi, Jul 4: Barely few hours left for Union Budget 2019 to be presented in Parliament, the expectations are very high of power and auto sector from the Narendra Modi-led government at the Centre.
“The power sector has seen phenomenal growth achieving the electrification of almost 96% of households in the last 5 years. This large growth in the sector can be attributed to the infrastructure boom in India creating more avenues for companies like ours. However, what we expect from this budget is increased focus on renewable energy," said KEI Industries Ltd Chairman cum Managing Director Anil Gupta in a statement.
"With the roadmap to achieve 175 GW capacity in renewable energy by 2022 including 100 GW of solar power, small tax rebates, better rate of interest along with reduction in corporate tax rate by the government will help us achieve this target. In addition to this, increased investment in infrastructure projects in Power transmission and distribution, Railways, Metro Rail, Highways will further boost the demand,” he added.
"The Central government has been consistently supporting and promoting the adoption of electric vehicles and it has had a positive impact on the market. As the industry matures, it will need long term policy support and predictability, which will allow OEMs and ancillary players to make deep investments. We expect the budget this year to focus on 4 areas of concern, that will have impact across the short to long term growth of the electric vehicle industry in India," said Ather Energy CEO Tarun Mehta.
As a manufacturer, we would like the Centre to review the current taxation framework applicable on raw material and the final product. There is an inherent inverted duty structure as the GST input on raw material and other overheads are on average of 18 % wherein the output is pegged at 12%. The proposed reduction of the GST on EVs to 5% will increase this delta. This structure results in significant working capital blockage.
"Even with the existing GST inverted duty refund framework in place, there is working capital blockage on the overheads and capital investments. A comprehensive GST refund structure of electric vehicle manufacturers or a reduced GST liability on the raw material should be assessed for seamless cash flows in the long run," he said.
"For end consumers, the FAME 2 incentive distribution to individuals is limited to only one vehicle per category but in a country where most households own multiple two wheelers, this will limit adoption especially if all two wheelers are to go electric by 2025."
‘Under the Phased Manufacturing Project, the timeline to source indigenous electric motors has been set as April 2020. This will need to be extended by 6-9 months to account for the validation and certification of the components and the vehicles, Similarly, the timeline to localise lithium-ion cells by April 2021 will not be sufficient for manufacturers to scale to meet demand and should be extended to 2023’.
Electric two-wheeler manufacturing company Okinawa Autotech Pvt. Ltd founder Jeetender Sharma said, “In the Interim Budget, the finance minister shared the vision of having 30% EVs in the mobility mix by 2030 to give a boost to e-vehicle manufacturers. The government has placed a definitive emphasis on Electric Vehicles and had already announced a reduction of customs duty on the imported electric vehicles in completely knocked-down or semi-knocked down state, to 10-15 pc from 15-30 pc.
"The Fame-2 Policy is also actively supporting the electric two-wheeler industry. In the upcoming budget we would like to see reduced import duties on lithium-ion cells, motors and motor controllers so that the batteries can be produced locally aligning with Governments’ Make In India initiative. We also want GST on batteries to be reduced from the current 18 percent slab to the lowest possible slab. We hope the government would soon announce a concrete plan of action with its time-bound implementation in order to fulfill its stated vision," he added.
The world is developing at an incredible pace with new technological interventions emerging every day. To move towards a stellar growth adverse effects of current modes of transportation needs to be countered. Government initiatives such as FAME II aims to boost electric mobility by not only providing government subsidy to the customers but also high-speed Made In India electric vehicles. NITI Aayog proposal of sale of only electric vehicles after 2030 have given further boost to e-mobility in the country.
Electric vehicles are easier on the environment than their gasoline-powered counterparts. They have tremendous potential to revolutionize the way commuting takes place at present in India and across the world by not just being economically viable but also environmentally sustainable.
"Switching to EVs will not only help improve the environment but will also prove to be cost efficient in the long run. Providing a solution to the lack of charging infrastructure for electric vehicles (EVs), electric two-wheeler makers are turning to detachable batteries to make the charging process easier. With the shift to detachable batteries the country pace towards electrification will double in no time," he added.
"Supplemented by innovators, entrepreneurs and active government support, the EV sector is progressively paving its way to make this mode the face of transport in India. As more and more countries are consciously taking initiatives to reduce dependence on conventional energy sources, adopting electric vehicles serves as one of the most basic steps towards contributing to a greener ecosystem and promoting the Make In India initiative. This is eventually leading to a paradigm shift, making electric vehicles the future of global transport,” he stated. (UNI)