By Prashanth Doreswamy
The Union Budget of 2021-22 will be crucial for the Indian automotive sector's effective revival. I firmly believe that the Indian automotive sector is poised for growth with the right policies and support.
Manufacturing is expected to be a vital focus area of this budget. This is crucial, post-Covid-19. Towards this, it would be good to have more clarity on the Production-Linked Incentive (PLI) scheme, which can create a significant impact in boosting manufacturing in India.
Specific to the automotive sector, we are in the midst of one of the biggest technology transitions in India and the world. There is a brilliant opportunity for the Indian automotive industry to capitalize. In terms of emission technology, we are already on par with Euro 6 norms, with BS-VI introduction.
To smoothen the transition, we also need to focus on the Scrappage policy, which is expected this year. The government should introduce the Scrappage policy by offering a one-time incentive to rebate in taxes for replacing vehicles that are greater than 15 years and facilitate taking them off the roads. Tightening and scrappage norms for vehicles can support demand creation and help boost demand in the coming months.
Supporting demand creation is very important for the growth of the industry. Demand has picked up post the lockdown. However, there is a concern about rising vehicle prices with the introduction of new safety technologies. It would help to have some incentives for OEMs and the end consumer.
(The author is Country Head, Continental India & Managing Director, Continental Automotive Components (India) Pvt Ltd)