Finance Minister Nirmala Sitharaman on Tuesday assured that the government will respond to the demands of the automobile industry which has had its worst monthly decline in August. Speaking at a press conference in Chennai, Sitharaman said a dip in the GDP is part of the growth cycle and the government is conscious that it must respond.
The carmakers demanded a cut in the Goods and Services Tax rates on automobiles which attract the highest tax rate of 28%. The demand is to cut the tax rate to 18%. Finance Minister Sitharaman said that the GST Council will look into the demand in the upcoming GST Council meeting in Goa on September 20.
India’s passenger vehicle industry suffered its worst-ever performance in two decades as a demand slowdown showed no sign of abating. Domestic sales of passenger vehicles plunged 31.6% in August to 1,96,524 units from the last year, according to data released by the Society of Indian Automobile Manufacturers (SIAM). It was the 10th straight decline in domestic passenger vehicle sales and the worst in the history of SIAM’s compilation of monthly sales data since 1997-98.
Sitharaman also assured buyers and manufacturers that vehicles compliant with Bharat Stage IV emission norms registered before March 31, 2020, will be able to run for the entire registration period of the vehicle.
“The automobile industry in India did have its good time, at least till two years ago. There was definitely a good upward trajectory for the automobile sector,” Sitharaman said, adding that the sector has been affected by the transition to Bharat Stage VI emission norms and a higher registration fee.
Apart from the ongoing troubles in the automobile sector, the Finance Minister also spoke about the Real Estate sector. Sitharaman assured of responding to the demands of the home buyers too. "Government response on home buyers will be sooner than later", she said.
Finance Minister Nirmala Sitharaman earlier had announced the merger of 10 Public Sector Banks into four big Public Sector Banks. She said that there will be a great cost reduction due to network overlaps and cost-saving due to joint ventures. This move to merge banks was announced with a view to bringing the economy back on track and on its way to meeting PM Modi's $5 trillion targets.