What should happen in the budget this time, that everyone will say 'Come and sit in my car'

Budget preparations are in full swing. Due to this year being an interim budget, the government can avoid income tax or making new populist announcements. But will Finance Minister Nirmala Sitharaman give anything special for different industries? Will something like this happen for the auto industry that everyone will say 'Come and sit in my car'

Only a few days are left for Budget 2024. Before Finance Minister Nirmala Sitharaman and her team 'lock-in' in North Block for a few days, many industries have high hopes from this year's interim budget. Especially in the auto industry, where the transition from petrol to battery operated vehicles is going on, companies are facing shortage of parts, there are delays in deliveries to customers and EV sales have not been boosted. In such a situation, what should happen in the budget this time that everyone will say... 'Come and sit in my car'

The government is already doing many things to increase the sales of electric vehicles in the country. This includes FAME-2 subsidy, income tax exemption and PLI scheme benefits for manufacturing companies. But their sales are increasing but their share in the total vehicles sold in the country remains the same.

Sales of electric cars are still just 1%

If we look at the electric vehicle sector segment wise, not only the sales of 2-wheelers have increased. In fact, they have spread even to small towns of the country. But such success has not been achieved yet in the 4-wheeler segment. People have limited options and this is largely limited to big cities. The share of electric vehicles in the total car sales in the country is still only 1 percent.

The main reasons for this are the lack of charging infrastructure, lack of confidence among people about the range and the very high price of electric cars.

What will the industry have to do?

If the auto industry wants to shift from petrol-diesel to electric. So it will have to work on new technology, battery material and better battery management system. So that issues like range anxiety and high-price can be dealt with. More than half of the cost of any electric car is only the battery and its components.

What should the government do?

To promote EV in the country, the government should strengthen the charging infrastructure in every possible way. Although work has been done in this direction, the government should bring more players into it. Instead of big players, small or medium companies should be promoted, so that they can expand rapidly across the country.

Apart from this, state governments can give separate subsidy or exemption to manufacturing companies to promote EV at their level. Apart from this, the government can take a bigger stake on 'hybrid cars' in the budget. These cars can be brought under the ambit of FAME-2 subsidy, so that the problem of range anxiety of the people can be eliminated. At the same time, transition from petrol to EV can be done smoothly.