In order to increase the demand in the auto sector, which is facing a major drop from nine consecutive months till July 2019, the Government of India has announced a number of measures to face the challenge. In a press conference, the Finance Minister of India Nirmala Sitharaman stated that the condition of the BS4 vehicles has created a state of big confusion in the industry in concern with the government’s emphasis on the electric vehicles.
In order to clear the confusion, the finance minister Nirmala Sitharaman said that the Government of India has taken a rigid decision that all the BS4 vehicles that are purchased by March 2020 will remain operational till the time they are registered for. Revision of the one-time registration fee has been postponed till June 2020. The finance minister also added that the government of India has increased the depreciation value on vehicles to 30 per cent.
The various departments under the government of India have been told to buy new vehicles in order to replace older vehicles. Previously, there was a ban on all the government departments from purchasing new vehicles.
The finance minister also stated that the banks have agreed to link auto loans with the repo rates. This clearly states that the consumers can soon have options of getting cheaper auto loans which are definitely going to boost the demands in the auto sector.
Sitharaman also mentioned that the government is soon going to come up with new policies of scrappage.
The auto sector is witnessing a slowdown for more than a period of nine months and in response to the slow sales, all the companies have jumped up to job cuts and production cuts in order to keep costs in check.
The Automobile industry witnessed the most devastating decline in nearly a time span of 19 years in July 2019, a drop up to 18.71 per cent was witnessed in the auto sales, and it impacted by making over 15,000 employees go jobless.