Union Road and Transport Minister Nitin Gadkari has assured financial backing to the auto sector in the wake of sluggish sales. He asserted that the crisis-hit industry will be provided with maximum possible support from the government and said he will discuss GST reduction for the auto sector with finance minister Nirmala Sitharaman.
Speaking at annual SIAM convention, Gadkari said the auto sector currently requires a boost in vehicle sales and added that he would propose a reduction in GST for hybrid vehicles to the finance ministry. In 2017 also, the transport minister had raised concerns over auto industry sales saying if the sales didn’t trigger up, the industry would be bulldozed.
He added that the government was not planning to ban petrol and diesel vehicles underlining that there was no such plan. He said he was keen to discuss several incentives via-a-vis automobile makers with the finance minister. To boost auto sales, Gadkari urged the manufacturing companies to have in-house finance companies.
With a view to generating demand for commercial vehicles, the road and transport ministry would give out 68 projects worth Rs 5 lakh crore, added Gadkari. Underlining tax reduction demand on petrol and diesel vehicles, Gadkari said the road ministry would consider their demands at the annual SIAM convention, adding that a reduction in tax will be of great help to the industry.
The economic growth has hit a six-year low with the GDP narrowing down to 5 per cent as opposed to expected 5.8 per cent. The worst-hit has been the automobile sector that has more than 30 per cent contribution to the GDP. Besides the Auto sector, consumables have also hit a six-year low with a decline in sales.
Maruti Suzuki, the country’s largest car manufacturer has witnessed a slowdown in sales of passenger cars. Yesterday, the car giant announced a two-day shutdown of car production from Gurguram and Manesar plants observing September 5 and September 7 as no production days.