- Union Finance Minister Nirmala Sitharaman announced six measures to tackle slowing automobile sector
- Her announcements targetted at boosting demand and income of the sector
- She also said that many car businessmen had met with the government to seek relief
Addressing the major concerns of the slowing automobile sector, Union Finance Minister Nirmala Sitharaman, on Friday announced the government's measures to tackle its issues. She made six announcements to dispel any misconceptions in the automobile sector. Her announcements targetted at boosting demand and income of the sector. She also said that many car businessmen had met with the government to appraise the current situation and seek relief.
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Here are the major steps were taken by the government as announced by the Finance Minister:
- BS-IV vehicles purchased until 31 March 2020 will remain operational for their entire registration period.
- Revision of the one-time registration fee has differed till June 2020.
- Inventories are currently stocking up in factories. Depreciation value of all vehicles has been increased to 30% from the current 15% acquired from now till March 2020.
- Both electric vehicles and internal combustion vehicles will be registered.
- To boost demand, the government will lift the ban on the purchase of new vehicles to replace old vehicles for government departments. This will boost the income of car manufacturers and then flow into car components' manufacturers' hands.
- The government will consider various measures including scrappage policy. Since we do not have the infrastructure to implement scrappage policy to provide money to those wishing to sell their old vehicle as scraps, we are holding onto it for now.
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Automobile sector slowdown
Leaders from the Indian auto industry had asked the government for a stimulus package, including GST reduction on vehicles. Currently, the sector which has been hit by an unprecedented slump in sales. The passenger vehicles (PVs) segment has been the worst hit, with sales continuing to decline for almost a year now. As per SIAM figures, vehicle wholesale across all the categories declined by 12.35 percent to 60,85,406 units in April-June against 69,42,742 units in the same period of last year. Federation of Automobile Dealers Associations (FADA) has stated that nearly two lakh jobs have been cut in the last three months due to the slowdown.
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(With PTI Inputs)