Union Budget 2025: Green signal for small cars, bikes

Tax relief for the middle class is expected to spur demand for cars, two-wheelers, and electronic goods, such as mobile phones, single-door refrigerators and semi-automatic washing machines.

RC Bhargava, chairman of Maruti Suzuki, said if you put money into the pocket of taxpayers and keep inflation under check, which the budget is doing, then this money becomes available for consumer spending. The car industry has been under pressure for about a year, and companies had been seeking a demand booster.

Shailesh Chandra, MD of passenger vehicles at Tata Motors, said the budget's focus on rural prosperity, coupled with reforms in personal income tax, are likely to help create demand.

The two-wheeler industry may be one of the biggest beneficiaries of the income tax relief. Pawan Munjal, chairman of Hero MotoCorp, said the budget gives a boost to manufacturing, green mobility, and rural empowerment, factors that will help create jobs. "The elimination of income tax for individuals earning up to Rs 12 lakh will spur economic activity and unlock consumer potential, while simplified tax regulations foster ease of doing business...The automobile sector stands poised for a significant leap forward."

White goods sellers also expect greater consumption. Manish Sharma, chairman of Panasonic Life Solutions India & South Asia, said the budget has a focus on putting more money in the hands of people, and this will drive consumption.