Budget 2024: Auto industry eyeing higher scrappage incentives, FAME 3
The Indian auto industry is eagerly awaiting the Union Budget 2024, set to be tabled tomorrow, with hopes of key measures to stimulate growth. The sector has been grappling with multiple disruptions in recent years, and seeks government support in the upcoming budget. Tax sops for hybrid cars, the FAME 3 scheme for electric vehicles, and better incentives for scrappage policy are some of their demands.
Tax benefits for hybrid vehicles: A hot topic
The Indian auto industry is currently engaged in a heated debate over tax benefits for hybrid cars. Automakers like Toyota are advocating for these benefits, arguing that hybrid technology allows cars to emit fewer pollutants than pure petrol or diesel models. However, other manufacturers such as Tata Motors have countered this view, stating that hybrid technology, despite its electrification aspect, still emits pollutants and cannot be compared with electric propulsion systems.
UP government bolsters case for hybrids
The recent announcement by the Uttar Pradesh government, waiving registration fees for strong hybrid and plug-in hybrid vehicles, has strengthened the argument for carmakers seeking tax benefits for hybrids. This policy move is seen as a significant boost to automakers advocating for such incentives. The industry views this as a positive step toward promoting cleaner and more sustainable modes of transportation in India.
Auto industry eyes FAME 3
The auto industry is also anticipating the announcement of FAME 3 (Faster Adoption and Manufacturing of Electric Vehicles) in the upcoming Union Budget. Following the successful implementation of FAME 1 and FAME 2, a third phase is expected to further stimulate the growth of electric mobility in the country. The government's goal is to achieve a 30% penetration rate for EVs in total auto sales by the end of this decade, with FAME 3 playing a crucial role.
Scrappage policy incentives on industry's wishlist
The auto industry is also hoping for an incentive boost for the vehicle scrappage policy. The Indian government has already introduced this policy, aimed at retiring old, polluting cars and replacing them with a new fleet. However, the industry believes that additional incentives for vehicle owners who opt for this policy, could further support this strategy and contribute to a cleaner environment.
