Finance Minister Nirmala Sitharaman has revealed the interim Union Budget 2024 in Parliament today, strategically timed just before the upcoming Lok Sabha elections. Marking her sixth Union Budget, Sitharaman clarified that the comprehensive budget will be presented by the new government following the election results. Nevertheless, here’s a look at the key highlights from the 2024 Interim Union Budget for the automobile industry: –
- Delivering the budget, the Hon’ble Finance Minister affirmed that the government would push for the EV ecosystem by facilitating manufacturing and charging infrastructure.
- The government plans to implement a gradual and mandatory blending of compressed biogas (CBG) and compressed natural gas (CNG). This initiative aims to integrate cleaner and more sustainable sources of energy into the existing infrastructure. The phased approach suggests a systematic transition, ensuring a smooth and controlled integration of gas supply.
- In a bid to promote sustainable practices in biomass management, the government is set to offer financial assistance for the acquisition and deployment of biomass aggregation machinery. This support is designed to encourage the efficient gathering and utilization of biomass resources, fostering environmentally friendly solutions and contributing to the growth of the bioenergy sector.
- The government is committed to the expansion of facilities related to the charging infrastructure and production of electric vehicles (e-vehicles). This expansion aligns with the growing emphasis on electric mobility, addressing both the demand for electric vehicles and the necessary infrastructure to support their widespread adoption. By enhancing charging infrastructure and production capabilities, the government aims to bolster the electric vehicle ecosystem, making it more accessible and convenient for consumers.
- With a dedicated focus on enhancing public transportation, the government is set to promote the widespread adoption of electric buses (e-buses). This will be done through the implementation of a payment security mechanism, encouraging confidence among e-bus operators.
- The government has slashed the budget for the Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) scheme by almost 44% to Rs 2,671 crore for FY25. This could potentially impact the pace of electric vehicle adoption in India. This also suggests the government’s intention to continue with the incentives.
- Govt has also allocated Rs 3,500 crore towards the production-linked incentive (PLI) scheme for automobiles and components for the next financial year (2024-25).
Commenting on today’s budget session, Sulajja Firodia Motwani, Founder and CEO of Kinetic Green, said, “Today’s announcements on the interim budget for Viksit Bharat illustrate the government’s steadfast commitment to creating a developed India by 2047. The significant progress gained in all aspects of infrastructure physical, digital, and social over the last decade demonstrates our multifaceted economic management, which effortlessly aligns focus on infrastructure building with aggressive capital expenditure with inclusive and people-centric development.
The allocation of 2.78 lakh crores to the Ministry of Road Transport and Highways is a clear indication of strides toward progress, particularly in fortifying the electric vehicle (EV) ecosystem. The government’s commitment to the expansion and fortification of the e-vehicle ecosystem, promote deployment of EVs for the masses, coupled with support for manufacturing and charging infrastructure, marks a pivotal moment. The government remains resolute in its commitment to expanding and sustaining this ecosystem, fostering entrepreneurial opportunities for vendors engaged in the supply and installation of charging infrastructure. Simultaneously, it aims to create employment opportunities for the youth equipped with technical skills in the manufacturing, installation, and maintenance of these vehicles.
The EV sector was expecting an announcement in the interim budget regarding the continuation of the Fame scheme for demand generation. We are hopeful to have this coming in the weeks ahead. We receive this budget with great enthusiasm, confidence and hope for the coming Amrit Kaal.