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AUTOMOBILE BUDGET - 2014
Transcript of AUTOMOBILE BUDGET - 2014
Study & Comparison
BUDGET REVIEW 2013
MAIN TALKING POINT ON
AUTO MOBILE BUDGET
REPORT : 18th March 2014
GROUP MEMBERS :
Swapnil Mali CORE (F) 013121
Yatin Patil CORE (F) 013122
Automobile Industry Profile
The industry has emerged as a key contributor to the Indian economy
The industry has grown at a CAGR of 14% p.a over the last 5 years, with sales of 20.7 million vehicles in 2013-14
With the potential to emerge as one of the largest in the world. Presently, India is :
2nd largest two wheeler market in the world
4th largest commercial vehicle market in the world
11th largest passenger car in the world and is expected to be the 7th largest market by 2016
Historic Facts & Figures Of Indian Automobile
The Government of India plans to introduce fuel-efficiency ratings for automobiles to encourage sale of cars that consume less petrol or diesel
The period of concession available for specified part of electric and hybrid vehicles till April 2013 has been extended up to March 31, 2015.
The basic customs duty (BCD) on imported luxury goods such as high-end motor vehicles, motor cycles, yachts and similar vessels was increased.
The duty was raised from 75 per cent to 100 per cent on cars/motor vehicles (irrespective of engine capacity) with CIF value more than US$ 40,000; from 60 per cent to 75 per cent on motorcycles with engine capacity of 800 cc or more and on yachts and similar vessels from 10 per cent to 25 per cent.
In addition, an increase in excise duty from 27 to 30 per cent has been allowed for SUVs with engine capacity exceeding 1,500 cc, while excise duty was decreased from 80 to 72 per cent, in case of SUVs registered solely to be used for taxi purposes.
An exemption from BCD will be provided to lithium ion automotive battery for manufacture of lithium ion battery packs for supply to manufacturers of hybrid and electric vehicles.
The excise duty on chassis of diesel motor vehicles for transport of goods reduced from 14 per cent to 13 per cent.
It’s a poor budget for the auto industry and can be best described as one that doesn’t acknowledge the sector’s problems at all.
The market has been reeling under the effects of a decrease in demand, rising fuel prices and weak sentiment; the Finance Minister (FM) announced absolutely nothing that could rejuvenate demand.
The sector greatly contributes to the Indian economy by way of taxes, investment & employment creation. In the recent past, car companies have announced putting off their expansion & investment plans. This situation is unlikely to change in the near future.
AUTOMOBILE BUDGET 2013
The FM has proposed that the excise duty on SUVs be hiked from 27 to 30%. There is no official definition of an SUV to separate it from MUVs.
High-end customers for imported luxury cars will feel the pinch of the FM’s decision to increase the duty on CBUs to 100% (up from 75%). Effective levies thus go up to about 160% for CBUs.
The duty on high capacity motorcycles (800cc or more) has been increased to 75% (from the existing 60%).
Subsidy benefits for electric cars remain in place till 31st March 2015.
The duty on second hand vehicles has been raised to 125% (from 100%). The Indian government only allows the import of right-hand-drive used cars that are up to 3 years old.
All those who like nothing better than to hit the road will welcome the budget proposal to set up an independent regulatory authority to address bottlenecks and speed up 3,000 kms of stalled road projects in Gujarat, Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh.
Motor Insurance found a mention in the budget. Public sector general insurance companies will now organise "adalats" to settle claims.
The decision to continue the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in the 12th Plan is a welcome one. The allocation for JNNURM is proposed to go up to Rs 14,873 crore from the Rs 7,383 crore provided this year. A significant portion of the allocated budget will support the purchase of up to 10,000 buses.
INTERIM BUDGET 2014
To give relief to the automobile industry which is registering unprecedented negative growth, the Finance Minister proposed to reduce the excise duty as follows for the period up to 30.06.2014:
(i) Small cars, motorcycles, scooters and
commercial vehicles -- from 12% to 8%
(ii) SUVs --- from 30% to 24%
(iii) Large & Mid-segment Cars--rom 27/24% to 24/20%
REDUCTION IN EXCISE DUTY
GOOD AMOUNT OF FUEL SUBSIDIES THAT IS 65,000 CRORE
MORE FOCUS ON BUILDING UP MANUFACTURING CAPACITY
NO CHANGE IN TAXATION
* Says need to bring down the deficit to 3 percent of GDP by 2016/17
* GDP expansion in third and fourth quarters of 2013/14 estimated at 5.2 percent. Growth for the whole year expected at 4.9 percent.
* Fiscal deficit seen at 4.6 percent of GDP in 2013/14, below target of 4.8 percent.
* Fiscal deficit projected at 4.1 percent of GDP in 2014/15
TALK ABOUT INTERIM BUDGET GROWTH AND FISCAL DEFICIT
Babitha shetty CORE (E) 013097
Meet Bhanushali CORE (E) 013098
Akshay Redij LOGISTICS 0131012
Tharniraja S.V. LOGISTICS 013001