The finance minister Nirmala Sitharaman is set to present the Interim Budget 2024. This Budget, while not expected to introduce sweeping changes, holds significance as a precursor to the broader financial strategy.

Indian automotive industry sector among various segments has a positive outlook over the upcoming budget and has been sharing their suggestions with the government. The Indian automotive industry sector has its expectations grounded on update of potential FAME 3 scheme, PLI sops and revision on GST entry-level two-wheelers. However, the interim Budget is expected to retain a status quo on the GST front on vehicles.

Vinnie Mehta, Director General, Automotive Components Manufacturers Association, said, “I must credit the government for its benign policies especially the PLI and the FAME which have greatly benefitted the automotive ecosystem.”

Vinnie further expressed hope that these policies would further continue to receive generous budgetary allocations from the government. He also pointed out that with reference to GST in the case of EVs, there are a few cases of inverted duty structure. He said, "Some of their components which are being taken up with the GST council."

Vinod Aggarwal, President, the Society of Indian Automobile Manufacturers (SIAM), said, “We are not expecting any special sops from the government. They should not create any sudden disruptions, they should continue with good policies, infrastructure investments, and stability in regulations, and not introduce regulatory norms.”

Anand Bang, COO – Sales & Marketing, Tata Motors Finance, said “As India anticipates the upcoming Union Budget, it is noteworthy to recognise the direct link between government-led infra spending and a flourishing commercial vehicle ecosystem. The demand for commercial vehicles is a crucial metric, reflecting the pulse of the nation’s infrastructure development and driving growth for CV financiers, manufacturers, and OEMs. Policy measures and fiscal initiatives needs to continue to orient with infrastructure development, alongside ensuring robust capitalisation in NBFC sector. As NBFCs are emerging as frontrunners in pivoting the nation’s economic trajectory, the upcoming budget requires to maintain a strategic outlook for NBFCs, particularly accounting their reach, technological advances, and capabilities in understanding the financial needs of the unbanked and underserved populations to fully tap the entrepreneurial aspirations of India Inc.”

Prithvideep Singh, General Manager, Continental Device India (CDIL Semiconductor), said, “The year 2023 has seen a lot of focus from the government to make India a semiconductor hub. As we step into 2024, the electronics and semicon industry expects a continued strategic focus on this sector. Our expectations are particularly high for the quick rollout of SPECS 2.0 and an expansion of the budget allocated to the India Semiconductor Mission. In addition, we advocate for a balanced distribution of funds. With multiple large projects seeking approval, the allocation will soon run out and MSMEs that are critical to building the semi ecosystem may miss out.”

He added, “Simultaneously, we would like to see refurbished wafer fabs get covered under the Indian Semiconductor Mission given India’s large demand for discrete, sensors and other active components. Older fabs will be able to serve this large market in India very successfully.”

Dr Raghupati Singhania, Chairman & Managing Director, JK Tyre & Industries, said “We’re optimistic about the Interim Budget driving sustained economic growth. We expect impressive GDP growth, supported by progressive policy measures for business, investments, and resilience. Focus on last-mile connectivity, infrastructure, and consistent automotive policies would propel sectoral expansion. A robust budget is vital for India’s journey to become the third-largest global economy.”

S Sunil Kumar, Country President – Henkel India, said, “The Interim Union Budget 2024 is anticipated to provide ongoing policy assistance and PLI schemes to the auto and auto component sectors to encourage domestic production. As India ranks third among the world’s largest auto industries, the demand for passenger vehicles, ride-hailing cabs, and electric vehicles is expected to sustain momentum. Promoting the domestic production of high-performance adhesives and sealants can play a vital role in meeting emerging consumer needs and benefitting the auto industry in the long run. A supportive ecosystem can drive innovation, boost manufacturing, and pave the way for a sustainable future for the Indian auto industry. Henkel Adhesive Technologies is dedicated to contributing to this journey by providing state-of-the-art adhesive solutions that enable lighter, stronger, and more efficient vehicles.”

Swapnesh R Maru, Deputy Managing Director – Corporate Planning, Finance & Administration and Manufacturing, Toyota Kirloskar Motor, said, “The proficient and agile handling of fiscal policy issues in the last few years, amidst global volatility and significant geopolitical risks, has successfully shielded the Indian economy from major headwinds. As a result, India has emerged as the fifth largest and the fastest growing major economy globally. The emphasis given to the manufacturing sector through schemes such as PLI and significant focus towards both physical and digital infrastructure along with other measures including efforts to improve the ease of doing business has attracted large inflow of investments. Notably, the automotive sector also saw an upswing.”

“Looking ahead, policy stability and continued emphasis on spurring investment and infrastructure development will not only further enhance country’s global competitiveness but also lead to growth of the manufacturing and service sector, improve supply chain efficiencies and generate higher employment thereby leading to social gains. We remain confident that the Government will continue its push towards shifting the economy and transportation sector to a greener future that is less dependent on fossil fuels and include cleaner energy options that are best suited for our country’s requirements at scale and in the fastest possible manner. This includes policy support to various technologies that utilises natural and indigenous energy sources such as solar, wind energy, biofuels like ethanol and biogas that will help in the creation of economic wealth within the country there by minimising our import dependency and arresting economic vulnerability.”

“Additionally, the education and skilling sectors that capitalises on the country’s demographic dividend also need continued support through sufficient allocations that are aligned to the rapidly evolving technological changes. Implementing hi-tech skilling programs that extend beyond geographical boundaries to reach rural markets will be pivotal in addressing the shortage of skilled manpower and ensuring the production of globally competitive products and services.”

Abhishek Chakraborty, Executive Director, DTDC Express, said, “The attention of the government has been largely on enhancing the logistics and supply chain infrastructure in the country. We expect the expansion on the same vision while making appropriate efforts to make supply chains more robust and versatile. In the upcoming interim budget, we look forward to more strategic reforms and allocations to help establish a comprehensive logistics network spread across air, roads, ports, and especially railways to create a dynamic and responsive supply chain.”

He added, “While the National Logistics Policy (NLP) is streamlining operations, effective regulatory and budgetary support is required to improve the digitisation of processes and unlock greater efficiencies. India’s logistics sector has shown tremendous growth in recent years, with a focus on relevant technological developments. We anticipate the interim budget to focus on shaping the industry with more advanced technologies like artificial intelligence, machine learning, the Internet of Things (IoT), and blockchain among others to streamline operations and unlock greater value.”

“Above all, we expect the government to continue to focus on development of infrastructure and technology and support the Indian logistics sector. Furthermore, we also expect the Union Budget 2024 to emphasise on eco-friendly measures like using clean energy, reducing waste generation, and opting for fuel-efficient vehicles.”

“The government's commitment to heavy investments in infrastructure projects, especially in tier-2 and tier-3 cities, is expected to boost the nationwide infrastructure. However, the increase in the price of raw materials such as cement, concrete, steel, etc. is impacting its rapid progress. As we anticipate the upcoming budget, it becomes imperative to address these rising costs strategically, ensuring that the national infrastructure development continues at a fast pace and aligns with international standards. Similarly, in the real estate sector, the rise in property prices, attributed to increasing construction material costs and repo rates, has significantly impacted housing demand,” Aparna Reddy, Executive Director, AEL, said.

“Reducing the GST charge on essential materials such as steel, cement, aluminium and bringing the petroleum products such as natural gas, diesel under GST and bringing petroleum products such as natural gas and diesel under GST will relieve pressure on developers and contractors driving infrastructure growth in full swing. This will propel consumer demand in the real estate segment as well. Moreover, the government should encourage and foster domestic production of building materials that will bolster the self-reliance agenda and generate employment opportunities. A robust domestic production ecosystem will ensure a stable supply chain, ultimately benefiting the entire industry. Further, it is equally imperative to invest in research and development of eco-friendly construction materials and technologies to reduce the environmental impact caused by construction materials. Incentivising the companies that adhere to eco-friendly norms with favourable policies will drive innovation in this critical area,” Reddy, said.

Jitesh Dodiya, Founder & CEO, Griden Power, said, “The electric mobility landscape in India is on the brink of transformation, with the government's ambitious FAME scheme aiming to accelerate the adoption of electric vehicles (EVs) across the country. A crucial aspect of FAME is the emphasis on building robust charging infrastructure to address the range anxiety that often hinders widespread EV adoption. As we approach the Interim Budget, expectations are high for substantial incentives and support for the development of charging infrastructure. The government’s commitment to enhancing electric vehicle charging infrastructure aligns with its broader vision of a sustainable and eco-friendly transportation ecosystem. The success of FAME hinges on a well-connected and accessible charging network, making it imperative for the budget to allocate significant funds for this purpose. We see the interim Budget as an opportunity for the government to incentivise private sector participation, foster innovation, and encourage collaborations within the industry. Incentives in the interim Budget should extend beyond financial support to include policy measures that simplify the regulatory landscape, making it easier for businesses to invest in and operate charging infrastructure. Additionally, a clear roadmap for the phased deployment of charging stations, especially in urban and semi-urban areas, is essential to ensure widespread accessibility.”

Raman Bhatia, Founder & Managing Director, Servotech Power Systems, said, “The EV Industry holds a strong potential to revolutionise India’s transportation sector and for the EV industry to flourish there should be a strong push for upskilling and reskilling through centrally sponsored schemes to build a skilled workforce in the evolving EV industry. Sustainable growth in the EV sector is contingent upon technological innovation aimed at reducing costs, extending range, and revolutionising charging infrastructure. This evolution pivots on developing Battery Management Systems (BMS) and nurturing domestic capabilities for battery manufacturing. Significant government funding, directed specifically at charging infrastructure in Tier II and Tier III cities, emphasises open data standards and APIs, fostering interoperability and a resilient software ecosystem. Proposals to reduce GST on lithium batteries from 18 per cent to 5 per cent represent a game-changer, significantly cutting down EV acquisition costs and enhancing overall attractiveness.

He added, “Strategic promotion of ICE+EV hybrid vehicles, especially in the smaller segment, is considered vital for achieving economies of scale. State policies, supported by the Central Government, are anticipated to incentivise this through investment policies and centrally sponsored schemes. The targeted implementation of PLI schemes for EV charging companies remains a key focus. Ongoing support, including tax deductions for EV purchasers and extension of FAME-II subsidies or the potential introduction of FAME-III, underscores the unwavering commitment to a green transition.”

The upcoming interim budget is likely to see higher capital expenditure on infrastructure, in line with the past three years, with a focus on green investment to meet the demand for earlier committed projects, and give a push to growth, create jobs, attract private investments and offset the impact of global uncertainty, said experts. 

“The interim budget is a working document and I don't expect a great radical shift in policy. This means that the government will continue to maximise public expenditure on infrastructure, both core and social”, said Vinayak Chatterjee, founder, The Infravision Foundation. He said the government needs to continue higher spending on infrastructure if it aspires for gross capital formation on infrastructure to be 8 to 9 per cent of GDP.

According to the Confederation of Indian Industry, rationalisation of subsidies, revenue augmentation and simplification of taxes could allow the government to increase the capex by 20 per cent to Rs 12 lakh crore. While this will be a moderation from growth in the last two years, it compares well with 12 per cent growth in the pre-pandemic period (2015-16 to 2019-20), it said. 

The PM GatiShakti plan is also expected to remain in focus. The government has evaluated more than 300 central and state projects worth Rs 11.58 lakh crore in two years since the launch of the PM GatiShakti National Master Plan for multi-modal connectivity. 

“While the government is expected to continue with capex on infrastructure, with a major chunk going to roads and railways, I foresee asset monetisation substantially enhancing the funding for new projects, especially roads”, said Jagannarayan Padmanabhan, global head-transport, mobility and logistics at CRISIL Market Intelligence and Analytics.

According to Padmanabhan, the ability to take market risks and the willingness of the banks to fund infrastructure projects are the key challenges ahead. 

“India is at an important inflexion point and given the current global developments and associated headwinds, the government should continue to lay major thrust on public capex (on physical, social and digital infrastructure) in the forthcoming budget”, said the Federation of Indian Chamber of Commerce and Industry. 

The government provided a budgetary allocation of Rs 10 lakh crore in 2023-24, Rs 7.5 lakh crore in 2022-23 and Rs 5.54 lakh crore in 2021-22. India aims to become a $5 trillion economy by 2025.

Rahul Garg, Founder & CEO, Moglix, said, “India is all set to touch USD 4 trillion in real GDP in 2024. The union budget 2024 is likely to sustain the infrastructure spending spree. The full budget in July is likely to see a fiscal expansion. I expect a greater approved budget for NHAI to reduce borrowing and therefore road development project costs. Also, I expect a higher outlay on local manufacturing of railway coaches for Amrit Bharat and Vande Bharat trains, development of railway stations, airports, and ports. Combined with an interest rate cut by the RBI the budget will be one among a long series of budgets for transforming India’s manufacturing and infrastructure sectors and push for India’s green transition. The startup revolution in India has taken off in a big way and a select few matured startups have grown sufficiently to go public. The honorable FM may like to consider the simplification of the regulatory framework for IPOs, for startups to leverage the power India’s equity markets. We are likely to touch a 7 per cent real GDP growth rate comfortably.”