martin schwenk md ceo mercedesbenz india by martin schwenkwith the union budget barely a couple of days away the automobile industry has submitted several requests to the government some of them pertain to the entire industry while some others are specific to the automotive industryfor the economy as a whole we expect higher government spending on infrastructure roadways etc especially since the economy has shrunk on account of the lockdown these will support and sustain a faster economic revival over the next few yearsthe consensus in the automotive sector is that higher spending proposals in the union budget would lay a strong foundation for good growth in the next four to five years therefore government spending is imperative now else the stimulus required for economic revival will be missed notwithstanding the lofty predictions by the world bank in our view the absence of substantial government spending and fiscal incentives for manufacturing will lead to the deferment of economic revival advt the first appeal specific to the auto sector is that there should be no levying of any new taxes for the automobile industry in the next couple of years this is critical for an industry that is reeling under low sales volumes because of the pandemic and the prepandemic slow market one of the positive aspects that we have seen developing in the last few years has been the rising interest and awareness on emobility and there is a potential for the growth of green mobility in india subject to certain incentives that ought to be provided to both the manufacturers and the customersthe market size for evs in india is still at a nascent stage and it needs to grow the government has been supportive by incentivizing the road tax for green number plates and this has been a welcome move this road tax incentive should continue and should grow in the coming yearssimilarly we recommend a reduction in the import duties for evs which we are confident will accelerate faster adoption of evs and in the turn encourage luxury oems to introduce local manufacturing of technologically advanced and worldclass evs in the country we have also called for suitable policy intervention and fiscal support on the development of public charging infrastructure or fast chargers this as of date is a major issue in india high taxation has remained one of the factors limiting the growth of the premium and luxury segment in this market we do not expect the government to reduce gst rates for the automotive industry however a reduction in the compensation cess stacked up to 22 for luxury and premium cars should be phased out the additional cess on top of gst for luxury and premium cars essentially makes the effective tax up to 50 this high tax regime thus makes the premium and luxury cars unaffordable to a large section of potential customers impairing the volume growth of the segment advt we remain confident that the policy makers recognize the relevance of the