Auto industry: survival drive

"If one looks at the long-term prospects, then this budget has some good things. Completing the Golden Quadrilateral road project before schedule, privatisation of ports (sea and air) and the 15-per cent additional depreciation will help investments. The road project will see a good demand emerging for the auto industry," says Hyundai Motor India president A P Gandhi.

The current fiscal is witnessing the lowest-ever industrial growth. But there is no proposal in the budget to propel an industrial investment in the short term. "Viewed from the short-run perspective, this is a so-so budget. The personal taxation benefits have gone for a sixer. The mutual fund industry will be greatly affected by the measures proposed in the budget. The mood is not upbeat, and it is reflected in the Sensex," he says.

The budget maintains the status quo for the auto industry, says an industry analyst with the Chennai-based Mutual Fund. Import duties have come down by 5 per cent to 30 per cent. Says Vinay K Piparsania, vice president, External Affairs: "The duty reduction will result in a better component quality." But the 15-per cent Cenvat on CNG and diesel engines might make an impact on commercial vehicle manufacturers.

"The writing on the wall for Indian companies was there for quite sometime: If you dont want to be in the global market, then nobody can save you. Its time the Indian industry got used to this. We at Sundaram Brake Linings are working as if there will be zero import duty by 2005," says Sundaram Brake Linings CMD K Mahesh.

 "Sinha had no choice, as his hands are tied. After Bal Thackerays warning, labour reforms is out of question at least in the short run," say Mahesh. "But I am disappointed with this budget. This budget hassles shareholders of all the companies. Instead of making the companies pay the dividend tax, asking the shareholders to do that is going to be a cumbersome process for individual shareholders."