Key Takeaways of Budget 2022:
- Battery as a Service to make EVs more accessible
- 25000 km Highway Expansion; Rs 20000 crore allocated
- Roads among the 7 engines of PM Gati Shakti Master Growth Plan
The new year has brought a new Union Budget for 2022, with expectations to boost the economy even further than the previous year. The focus of the budget is to provide a blueprint towards preparing India and its economy for the vision of India at 100 as part of the ‘Azadi ka Amrit Mahotsav’ initiative.
The Finance Minister, Nirmala Sitharaman has presented a growth-focused Budget for this year. Here are the key takeaways that will have an impact on the Indian automotive industry.
Emphasis on Highway Development
In an effort to boost the logistical capacity of India’s road networks under the PM Gati Shakti initiative, the Indian government has stated that the National Highway network will be expanded by 25,000 km within 2022 and 2023. This is an ambitious endeavor by the government, which had constructed a more modest 8500 km of highways in the previous budget.
Efficient EV Policies
With climate action and sustainable development becoming a strong focus for this budget, Electric Vehicles receive a boost in the form of efficiency focused EV policies. To improve EV adoption in cities, a focus on battery swapping policy is being emphasized with the Battery as a Service model. This will help create standards of interoperability to make EVs more affordable and accessible.
Boost for Rural Automotive Demand
The Finance Minister announced minimum support price (MSP) payments of ₹2.73 crore to aid incomes in rural India. This will have an indirect boost for automotive demand in rural India, especially for entry-level cars, used cars, and two-wheelers. The announcement is viewed as a positive to recover the falling rural demand for vehicles, which have made up the volumes for carmakers.
Other Key Announcements
There were some policy announcements that are focused on improving the transport and automotive sector development.
- 400 new generation Vande Bharat high speed trains with better efficiency to be brought in during the next 3 years.
- 100 PM Gati Shakti Cargo terminals to be developed during next 3 years
- Metro systems to be standardised keeping in mind Indian conditions and needs
- PLI scheme extended to solar equipment for higher efficiency solar power modules. This could lead to improved charging infrastructure on highways and cities.
