This year budget seems to be not giving enough momentum to the Auto Industry. Growth witnessed in last couple of years may be totally missing in this year with the various proposals in the budget.
Most hurting factor could be the increased Excise Duty which will ultimately result in increase in the cost of acquisition. To meet its fiscal deficit targets Govt. is determined to reduce its subsidy on petroleum products and that means increase in fuel prices. These will be the negative drivers for the auto industry.
Car market is just out of blues from a disastrous year and now Tractor market is plunging. It seems the bumper crops of last year, are becoming roadblocks in the growth of Tractor demand. Due to excessive supplies of crops, rates have started falling and the farmers are not having enough money to buy more Tractors.
CV has already started struggling for the numbers. Other than Diesel Cars, nothing else looks to be growing. Are we headed to tough times ahead. To maintain momentum of reducing poverty we need another 5 years at least of high GDP growth of around 8% plus.
