By Sunjay Kapur
We are looking at the Budget 2020 as an enabler with the following measures:
Incentivizing R&D
In light of the quantum of innovation and disruption the automobile industry is undergoing, not just in India but across international frontiers, it is imperative there is sustained and intensive focus on R&D. On the one hand a corpus fund could give momentum to development of e-mobility components or throw up answers for meeting climate change challenges. Important but relevant in the context of R&D is removal of import duty on prototypes which are crucial for testing; and retention of weighted tax deduction on R&D expenditure. I believe that the retention of weighted tax of at least 150 per cent or ideally 200 per cent on R&D spends will be the boost that the industry is looking for.
Vehicle Scrappage Policy
Logistical efficiencies, emission concerns and consumer transition into new-age technology can all be addressed by a comprehensive vehicle scrappage policy. Eradication of old, polluting vehicles via an incentivized scrappage scheme, maybe reduced road tax and registration charges will benefit all stakeholders in the long term. In addition, it will nudge consumer focus towards BSVI vehicles and EV adoption.
To conclude, high taxation, a stagnant economy, stressed rural sector has affected consumer behaviour and economic activity in the last year. This Budget must consider the cost factor for both manufacturers and consumers. I believe the above measure, if properly incentivized, implemented and extended to all stakeholders, can turn the fortunes of the industry.
(Sunjay Kapur is the Chairman of Sona Comstar & Vice-President of ACMA. The views expressed are personal.)
Source: IANS
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