Not Much Good News from the Budget for Indian Auto Business

The Indian car industry, which recorded negative growth for seven consecutive months until January 2009, has not received any sops from the interim budget. But according to a leading industry lobby, the increased allocation for defence and surface transport ministry would help in increasing sales numbers.

In the defence sector, Jawaharlal Nehru National Urban Renewal Mission (JNNURM) is allocated with Rs.118.4 billion for 2009-10 by the external affairs minister, Pranab Mukaherjee who presented the Interim budget. Launched in 2005, JNNURM aims at improvement of urban infrastructure. Funding under this scheme has been used by the states to upgrade their transport infrastructure.

Out of Rs.141703 Crore allocated through the budget for defence spending for the fiscal, Rs.548 billion is meant for capital expenditure.

The SIAM (Society of Indian Automobile Manufacturers) said that the allocation for JNNURM and the ministry of surface transport could be used for funding the vehicle replacement program and for purchasing new vehicles.

But the industry is not very happy about just an increased defence spending and many are of the opinion that the government should come up with further fiscal and monetary measures to revive the growth of the auto sector.

Sources: http://blog.carazoo.com/2007/10/pre-owned-car-industry-to-get-boom-in.html; http://www.carazoo.com/article/3010200801?page=1