Auto parts manufacturers demand increased subsidy on new machinery

  • Arjun Sharma, None, Ludhiana
  • Updated: Feb 05, 2015 16:49 IST

The auto parts industry has been demanding skill development and technological upgrade for the past long time and for this the central government has been approached time and again. Lack of labour is also a major issue for the auto parts industry based in Ludhiana.

Interestingly, different auto parts companies in Ludhiana manufacture parts for world renowned vehicle companies. BMW, Mercedes Benz and Audi are some of the top notch companies which get their parts manufactured from Ludhiana industry.

However, the auto parts industry has, so far, remained confined to the mechanical parts and not electronic parts. The industry wants that focus should be laid on whatever it manufactures.
The industrialists believe that major reason why the auto parts industry in Ludhiana was facing a downward movement was due to lack of technological upgrade.

The industrialists also relate the slowdown in the auto parts industry to global slowdown that has severely hit their businesses and many of them have also shifted their units to Gurgaon, Pune and elsewhere, where automobile companies were setting up their plants.

The Congress-led UPA government had brought down the excise duty on small cars, scooters, motorcycles and commercial vehicles to 8% from 12% during the interim budget last year. The excise duty on SUVswas brought down to 24% from 30%. Besides, mid-size cars also got cheaper on excise duty cut.

Technological upgrade is need of hour

Technological upgrade is the need of the hour for the auto parts industry in Ludhiana. The industry wants that the Centre should make Research and Development Centre operational so that new technology and business assignments can be ensured. The industry has also demanded that the limit of subsidy on purchase of new machinery should be increased to 30% (`5 crore) from 15% (`1 crore) so that manufacturers can get better machinery.

Skill development centre

Special skill development centre for training of labourers is also a long-pending demand of the auto parts industry. The labourers trained at this centre, especially for the auto parts industry, can change the fortunes of the industry and bring more and more business for them. It can also generate more employment.

Scrap policy

Auto parts manufacturers also say that the central government should come up with a policy in which everyone should be required to dump his or her vehicle after a period of time so that the flow of new vehicles doesn’t slow down.
The industry has also demanded that the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) should be linked with it so that the problem of unemployment can be solved easily.

Exhibition centre

Like other industries, the auto parts industry has also been demanding an exhibition centre.
With the setting up of an exhibition centre, manufactured goods would be showcased with ease, the industry demanded. Many auto parts exhibitions take place in Ludhiana every year and the industry has to spend a huge amount to set up the infrastructure during these exhibitions.

An exhibition centre will save the money spent by the industry every time.

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