Press Release

Union Budget Neutral on Auto-Component Industry

Future Growth Through Infrastructure Focus
Positive Impact on vehicle industry, No direct impact on auto
component industry

The Union Budget announced by the Finance Minister today would not
have any incremental and direct impact on the auto-component
industry, said Mr. J.S. Chopra, President, Automotive Component
Manufacturers Association of India (ACMA)

Welcoming the thrust on infrastructure development in the Budget, Mr.

Chopra said that the increase in the outlays for NHAI and JNNURM
would fuel growth in the automotive industry in the medium to long
term. The auto-component industry would be an indirect beneficiary of
this growth. The focus on infrastructure, through the various schemes,
will have a positive impact on economy. Increased infrastructure
spending will have a direct and positive impact on the automotive
industry. The removal of FBT is also a welcome step, said Mr. Chopra.

Mr. Chopra also expressed satisfaction that the Finance Minister

recognised the challenging times being faced by the domestic industry
during this time of recession and did not further bring down the rates
of Customs Duty this year., which was one of the demands of ACMA.

Furthermore, by retaining the Excise Duty at 8%, the Finance Minister

has ensured that the stimulus provided to the industry earlier in the
year would be continued till the industry fully recovers from the
current recession.

Mr. Chopra also welcomed the Finance Minister’s announcement that

full GST would be implemented in 2010. However, there was no
announcement in regard to further reduction in the CST rate this year,
he added.
ACMA has also welcomed the Finance Minister’s decision to to promote
skill development in the industry by increasing allocation and
promoting the setting up of new IITs and NITs.

Mr. Chopra said that overall the budget was neutral for the auto-
component industry as it did not contain anything new for the industry.
The small reduction in the Excise Duty on large cars and petrol driven
trucks would have a very marginal positive impact on vehicle sales.

Mr. Jayant Davar, Vice President,, ACMA added that the auto-
component industry is a sunrise sector counting on extensive exports
to take advantage of our low cost country (LCC) status. We want the
government to give some kind of kick start to our exports to make
them more attractive to make them international. Nothing happened
there, added Mr. Jayant Davar, Vice President, ACMA

6th July 2009

New Delhi

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