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How will Modi government tackle these 5 big challenges in 24 hours?

New Delhi.
Union Budget 2022: Union Finance Minister Nirmala Sitharaman will present the Union Budget in Parliament on Tuesday. This budget to be presented during the Corona period is very important in many ways, where every sector has high expectations. In such a situation, this budget is very challenging for Modi 2.0 led by Prime Minister Narendra Modi. During this, the eyes of the auto industry are also fixed on this budget. Actually, the sectors which have suffered the most during the Corona period include the auto sector. Let us tell you that the auto sector has a big impact on the country’s economy. It is the largest employment generating sector. In such a situation, today we are going to tell you about the 5 big challenges of Finance Minister Nirmala Sitharaman and Modi government, which they have to face in this budget.

Will the GST rate on vehicles be reduced?

A GST tax of 28 to 60 per cent is levied on vehicles. This tax varies on different categories of vehicles. In such a situation, there has been a demand from the auto companies for a long time that the government should reduce the rate of GST on vehicles. Although this demand is being made for the last three years, but no change has been made in the tax rate by the government.

How will employment opportunities increase?

Prime Minister Narendra Modi launched the Automotive Scrappage Policy in August last year. This decision of the government was well received by the market. While launching it, PM Modi had said that this policy will lead to an investment of about Rs 10,000 crore and thousands of youth will get employment. Actually, the auto sector suffered heavy losses during the Corona period. In such a situation, the eyes of the market are fixed on this budget to promote employment.

How will the sale of electric vehicles get a boost?

In the year 2019, after the announcement of Union Finance Minister Nirmala Sitharaman, the rate of GST on electric vehicles was reduced from 12 percent to 5 percent. A historic fall in the prices of electric vehicles was recorded due to the reduction of 7 percent GST on electric vehicles. In such a situation, there is a demand from EV manufacturers to reduce the rates of GST again. Apart from this, companies are also demanding reduction of tax on battery prices.

How to become self-reliant from China?

The Indian auto sector imported auto parts worth $4.75 billion from China in the year 2018-19. Whereas, 60 percent of the raw material was imported from China to make the vehicles. For information, let us tell you that Chinese auto parts have a 27 percent stake in the Indian auto sector. This is the reason why the auto industry had to face a lot of trouble when imports from China were stopped during Corona. In fact, the supply chain came to a standstill during this period, due to which there was a shortage of parts in the Indian auto sector. The dependence on China can be understood as India imported parts worth $17.6 billion in the financial year 2018-19 to make vehicles, of which 25 percent was imported from China. In order to avoid such a situation again, Indian companies are constantly trying to reduce their dependence on other countries. In such a situation, the market has been continuously demanding help from the government in this area. In such a situation, it has to be seen whether the government will fulfill this demand in this budget?

government will give any relief

The Indian auto sector has been facing continuous ups and downs in the year 2019. In such a situation, there is a constant demand from the market for financial help and reducing the tax. This demand has increased even more during the Corona period.

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