What’s In The Interim Budget For Automobile & Technology Sectors?
The Interim Finance Minister Piyush Goyal, while presenting the Interim Union Budget 2019, didn’t go into much detail on proposals for the technology and automotive sectors. However, he did reiterate India’s push to electric mobility and also the setting up of a National Centre of Artificial Intelligence.
Goyal did not elaborate on the steps that would be taken specifically to incentivise electric vehicle production or the setting up of charging infrastructure for the same. Details on that will be expected in the full budget in June.
Push For Electric Mobility
However, just a couple of days before the Interim Budget, the government cut customs duty on import of parts and components for electric vehicles to 10 to 15 percent from 15 to 30 percent earlier.
The Central Board of Indirect Taxes and Customs (CBIC) removed customs duty exemption to battery packs for electric vehicles and also doubled the duty on battery packs for mobile phones.
Henceforth, import of battery packs for electric vehicles will attract 5 percent tax from zero duty earlier. Customs duty on battery packs for mobile phone has been doubled to 20 percent. This is seen as a move to promote local manufacture of batteries under the ‘Make in India’ initiative of the government.
However, reactions from the industry are mixed.
Although the government underlined their view on FAME2 again to encourage Electric Vehicles (EVs) yet a clear date and target are missing. Somehow, the decision of increasing 5 percent duty on batteries will create an obstacle in wide adoption of EVs, but we hope that government will revise the policy framework to attain the target of 30 percent to 40 percent EVs on a conservative scale.Dhivik Ashok, CEO Go GreenEoT
Boost for Artificial Intelligence
The government plans to set up a national portal to promote the development of artificial intelligence programmes.
This announcement is expected to give startups working in the area of Artificial Intelligence a boost. Some global giants like Foxconn have already expressed interest in setting up AI development centres in India.
Industry sees this as a welcome move.
Besides these two announcements, the government also said that the consumption of data has gone up more than 50 times in the past few years, largely because India has the lowest call and data rates in the world.
The government also announced plans to create 1 lakh “digital villages” over the next five years. No details on how these plans will unfold or what these digital villages consist are available at the moment.