Heavy Industry Minister Santosh Mohan Dev assured the annual conference of the Society of Indian Automobile Manufacturers (SIAM) on Wednesday that the government would to its best to pull the industry out of sluggish growth in the current year, while Commerce and Industry Minister Kamal Nath said he would strive for a level-playing field in global trade negotiations.
Dev said he was discussing an excise duty cut with the Finance Ministry.
Nath allayed fears that an inverted duty structure in which inputs are taxed more than finished products would be addressed by looking for a level-playing field.
“We will ensure that infant sectors in the economy such as the automotive industry are protected. This is our position at the multilateral trade body, WTO, as well," Nath said.
In the first four months this year, growth has been sluggish.
“If need be, we will certainly intervene to sustain growth,” Dev said, adding that if domestic market was slack, the government would offer incentives to make India a global hub.
Dev exhorted the automobile makers to tap the rural market and develop a cost-effective transportation strategy for rural India.
The passenger car segment grew by 13.03 per cent whereas the commercial vehicle segment grew by 2.06 per cent year-on-year in the first four months of the current fiscal year. The two-wheeler segment has actually decelerated while the performance of the three-wheeler segment has also not been encouraging.
Commenting on the Automotive Mission Plan (AMP) released earlier this year, Dev said the government was in the process of finalizing the implementation committee. “As compared to last year's announcement of investment of Rs 11,000 crore, the figure as per the latest available information is over Rs 64,000 crore and I am told more announcements are under way. Yet many of these investments are perhaps at the sub-optimum scale,” he said
“We are told that among various sectors, the availability of credit facility for the first time buyer is a major constraint coupled with the increase in interest rates,” Dev said. He, however, said some segment growth has been powered by launch of new models and new vehicles.