SIAM expects push for rural economy, scrappage incentives in Union Budget

With the Union Budget 2024 just around the corner, and slated to be presented in the Parliament on July 24, the automotive industry has started advocating its expectations from a highly-anticipated Budget that comes after the formation of the new NDA government.

As per industry body SIAM or the Society of Indian Automobile Manufacturers, the expectations are that of a growth-oriented Budget that drives demand. “We are expecting to see a growth-oriented Budget that will focus more on capital expenditure,” said Vinod Aggarwal, President, SIAM.

“The government must take initiatives that are good for economic growth, and capital expenditure has a multiplier effect on all segments of the economy. While the allocation of capex in the interim budget was 1 lakh crore, which was 11.1% higher than the previous year, we expect that the focus on allocating more capex will continue,” Aggarwal added.

The SIAM president who will complete his tenure later this year in September,  reiterated that the automotive industry will be the key driver for the continued growth of the economy, emphasising the importance of the rural economy, and increased incentives for the same.

“While there are projections of a good monsoon, if the government comes out with some incentives to further boost the rural economy, it will augur well for the automotive as well as FMCG sector. If the rural economy does better, it will be good for the economy holistically,” he said.

Aggarwal further added that SIAM also expects the government to continue incentivising EVs and come up with schemes like the much-anticipated FAME 3 policy, in addition to its existing PLI schemes for the industry. To further boost demand for new cars, he championed the cause for more incentivisation, by virtue of a scrappage policy. 

“While there is a scrappage policy already in place, we have not seen much impact of it as of now. Therefore, we expect that to give further push to the scrappage of old vehicles, something needs to be done,” Aggarwal said.