Nitin Gadkari, Minister of Road Transport and Highways, while speaking at the SIAM Conclave, has acknowledged the slowdown of Indian automobile sector is going through and said, it is in need of help. Mr. Gadkari had assured that he will discuss the SIAM’s request of minimizing GST on diesel and petrol vehicles with the finance minister.
Society of Indian Automobile Manufacturers (SIAM) is an auto industry body. Following a 30 per cent offtake decline by passenger vehicle makers last month, the body sought immediate steps from the government, including a reduction rate in GST rates and initiation of scrappage policy. They even said that the commercial vehicle and two-wheeler sales are significantly negative indicating that the market has still not responded to the various measures initiated by the Finance Minister Nirmala Sitharaman in August
SIAM President Rajan Wadhera said in a statement, “All this while, the industry has pulled out all the stops in offering attractive deals and discounts to the consumers. “However, the ability of the industry to provide large discounts is limited and this only highlights the need for government to consider reducing the GST rates from 28 per cent to 18 per cent which would significantly reduce the cost of vehicles and, in turn, create demand,” SIAM President Rajan Wadhera said in a statement.”
He added, There is also an urgent need to come out with an integrated incentive-based scrappage policy covering all segments of the automobile industry as promised by the FM. Mr. Wadhera said, “The festival season is around the corner, it is imperative that these decisions are taken quickly and announced without delay so that the industry could hope for a better festival season that could harbinger a recovery in the industry.” Wadhera said. The series of announcements on credit availability and reducing the cost of credit that were made do not seem to have percolated down to the non-banking financial companies (NBFCs) which support the bulk of finance for the automotive industry, he added.