Delhi: While some corporate corporate heads and
analysts described it as a non-event others were more
vocal in saying and finance minister P Chidambaram''s
Budget of 2007-08 as very disappointing.
notable aspect about the current budget is regarding
the number of sectors it neglected to touch.
For starters the auto industry an engine of growth in
India in the past five years has not received direct
mention. The mildly positive news concerning automobiles
is the cut in tariff on petroleum and diesel from 8
per cent to 6 per cent.
government has announced indirect benefits in education
and training of the workforce and extension of the benefit
of 150 per cent weighted deduction on in-house R&D
by another five years. The industry incidentally had
demanded a 10-year extension.
indirect benefit to the auto is in provision for the
national highway development programme.
industry had expected excise duty on larger passenger
vehicles to be cut to 16 per cent from 24 per cent and
customs duty on auto parts would be cut to 5 per cent
from 12.5 per cent.
Not surprisingly the shares in Indian auto companies
fell after the release of the Budget 2007 along with
the rest of the market.
auto sector index was down 2.5 per cent. Shares of Tata
Motors were down 4.5 per cent at Rs 785, Maruti Udyog
was down 5.3 per cent to Rs 841, Mahindra & Mahindra
dropped 3.5 per cent to Rs 819.90 and components maker
Amtek Auto was down more than 3.0 per cent at Rs 373.25
at the close of the market today.
his disappointment Maruti Udyog managing director Jagdish
Khattar said the auto sector has been completely ignored.
"Nothing is there for the auto sector in the Budget.
Presently it is a disappointment," Khattar said.