Budget 2019: Tyre industry finds budget a mixed bag
What will lend an impetus to the auto and tyre sectors is Finance Minister’s proposal to invest Rs 100 lakh crore in the infrastructure sector over next five years.
What will lend an impetus to the auto and tyre sectors is Finance Minister’s proposal to invest Rs 100 lakh crore in the infrastructure sector over next five years. Upgradationn of 125000 km of road length over the next five years under the Pradhan Mantri Gram Sadak Yojana –III augurs well for the transportation sector and thereby Auto & Tyre sectors.
“Tyre Industry was keenly looking to correction in inverted duty either by increasing import duty on finished goods (tyres) or reducing it on Natural Rubber (NR) the principal raw material. Basic customs duty has been increased on some auto parts in the Budget but tyres have been deprived of the relief. It is wished duty on tyres could have been increased too with a view to face the onslaught of cheaper imports”, said K M Mammen, Chairman ATMA.
The duty on variants of butyl rubber, an important raw material for Tyre Industry, which has no domestic production, has been increased from 5-10%. That is a dampener for the Industry and will impact price competitiveness.
Auto sector, which is battling tough times, was hopeful of a stimulus measure. A fiscal support in terms of lowering of GST could have helped. Unfortunately, the prices of petrol and diesel stand increased which will increase cost of ownership especially that of commercial vehicles.