With a rise in economic slowdown, among the sectors to be worst hit is the FMCG sector that has witnessed continuous fall in sales. Reports on the auto industry crisis have been doing rounds for quite some time and it’s probably the worst in the past two decades. According to a report by India Today, over 2.30 lakh auto sector jobs fell prey to the economic slowdown.
There has been a perpetual fall in the sale of passenger cars with the latest number going down by 35 per cent, as released by the Society of Indian Automobile Manufacturers (SIAM).
Now in another setback to the automobile sector, one of the country’s largest car suppliers Maruti Suzuki has announced to nullify contracts of 3,000 temporary employees due to slowdown in demand.
Maruti India chairman RC Bhargava blamed high taxes for the decline in car sales. He said safety norms added majorly to the car prices which eventually affected buyers’ affordability.
India’s auto sales are in the ninth month of its decline with the automotive manufacturers adopting cost-cutting measures to keep costs in check.
The auto sector till July 2019, witnessed 18 per cent overall dip in sales with the passenger cars being the worst hit among other categories. For commercial vehicles, sales declined by 25 per cent while for two-wheelers the sales declined by 16 per cent as compared to last year.
Keeping in view the persistent economy slowdown, Finance Minister Nirmala Sitharaman also announced some measures to reviver economy. The measures comprised relief to major sectors including the automobile sector.
The Finance Ministry on August 23 declared to withdraw enhanced surcharge on foreign portfolio investors (FPIs) and domestic investors. The move has been taken to boost investment in the capital market.
Several revival steps were announced for the automobile sector too. For example, BS-IV vehicles bought till March 31, 2020, will remain functional for registration. The government also announced to defer the revision of one-time registration fee till June 2020. Other than that, the government has also announced to lift the ban on the purchase of new vehicles by its departments.
A few days ago, Parle-G also expressed concerns over the decline in sales of its basic Rs 5 biscuits and cited a possibility of termination of at least 10,000 employees.