Finance minister P Chidambaram's hopeful declaration a few months ago, which India has the possible to be a small car developed hub for the world can interpret into the Budget 2007 helping this procedure out through a slew of fiscal incentives. More remove cuts and improvement of the sops for R&D can be in the works.

These apart, the government may take a few events outside the budget as well — it will, for example, develop a strategy, which as it offers tariff reductions under free trade agreements (FTAs), it doesn’t put in danger the domestic auto industry even temporarily.