Finance Minister Sitharaman’s three-point plan to jump-start auto sales
Finance minister announced measures to arrest a fall in demand for automobiles. Latest Federation of Automobile Dealers Associations (FADA) data reveals that overall retail sales in July had fallen by 6 per cent.
Finance minister Nirmala Sitharaman announced three measures, including lifting the ban on purchase of new vehicles by the government departments to address the slowdown in automobiles sector, in a press conference in New Delhi.
Finance Minister Nirmala Sitharaman with her MoS Anurag Thakur (L) and Finance Secretary Rajiv Kumar addresses a press conference announcing a slew of economic measures to boost growth, at National Media Centre in New Delhi, India, on Friday, August 23, 2019. (Mohd Zakir/HT PHOTO)
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In other two announcements aimed to deal with the piling up automobile inventories, an additional 15% depreciation on vehicles acquired from now till March 2020 is being allowed, said Sitharaman along with work continuing on vehicle scrappage policy to limit circulation of old vehicles.
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In another auto sector related announcement, she said that BS IV vehicles purchased till 2020 will remain in operation for the entire period of registration, allaying fears of automakers as well as buyers that such vehicles will be forced out of the roads.
Finance minister’s announcements follow a continued fall in demand for automobiles. Latest Federation of Automobile Dealers Associations (FADA) data reveals that overall retail sales in July had fallen by 6 per cent and sales for passenger vehicles were down by 11 per cent on a Year-on-Year basis.
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Watch | Home, vehicle, other retail loans to become cheaper: Nirmala Sitharaman
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Watch | Home, vehicle, other retail loans to become cheaper: Nirmala Sitharaman
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However, as per the data, the overall retail sales grew by five per cent in July to 16,54,535 units from an off-take of 15,81,141 units in June.
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Slowdown in auto sales, that have also been attributed to week monsoon and elections, have cost some 15,000 jobs over the past two-three months, as per some estimates.
The auto industry has been asking the government for reduction of GST on automobiles to 18 per cent from 28 per cent as part of a stimulus package.
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