Union Budget 2022-23: GST of 5% on auto rides booked online creates an uneven playing field between offline, online autos
Indian Union Budget 2022: India’s EV industry is projected to grow at an astronomical CAGR of 90 percent and touch $150 billion by 2030
It’s that time of the year again: different industrial sectors are making Budget wish lists in the hope that the government will loosen its purse strings and provide an adequate impetus for growth. While infrastructure spending to boost the economy and increase employment is topmost on the minds of policymakers, the government should not overlook the need to focus on digital economy companies.
As India and the world look to loosen pandemic restrictions, the mobility sector will once again play a critical role in bringing growth back on track. As we move towards the new financial year, we are looking at a Union Budget that will give due importance to digital transformation and help sustain and create jobs and usher in investments, growth and economic momentum.
Implementation of the Code on Social Security to workers
The Code on Social Security (CoSS) passed by the Indian Parliament in 2020 marks India as one of the first countries to establish a framework for nationwide social security benefits and protections for gig and platform workers. It set a precedent by transforming what has been a binary choice between full-time and independent work. In light of the pandemic and the economic recovery process, we urge the Government to expedite the notification and implementation of the Code on Social Security (CoSS) to support gig workers. This will help provide timely support to workers with flexible work options aiding overall economic recovery.
Incentives and easy financing options
The pandemic has seen an accelerated shift towards digitisation of services, and the mobility sector is no different. With more people using their smartphones to get services, the ridesharing industry is poised for a sharp rebound. An incentives-driven strategy that enables easy access to financing and bank loans for vehicle purchase will not only support gig workers but also the auto industry. This will unlock economic opportunities for hundreds of thousands of platform workers.
Progressive EV policies
A sustainable mobility ecosystem needs to be shared, multimodal and electric. Mobility companies like Uber are a vital part of this picture. We are seeing that around the world people don’t switch to EV cars unless there is well-developed, accessible charging infrastructure. We must make sure that EV policies incentivise the development of charging infrastructure and don’t put impractical compliance demands on one side of the ecosystem, something which could crimp the overall growth of EVs in the country.
Level playing field for online auto rickshaws
In 2021, the government announced a levy of 5 percent GST on auto rides booked online. While we appreciate the need for the government to collect revenues, the newly announced tax has a direct impact on the earnings of auto drivers. This tax creates an uneven playing field between offline and online autos and goes against its vision of digitization of services, products, and payments. Reversing this GST will ensure riders, drivers and cities can keep benefiting from the growth in this nascent sector.
The writer is President, Uber India South Asia. Views are personal.
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