Finance Minister Nirmala Sitharaman today introduced a few measures geared toward reviving the automobile enterprise that is presently witnessing its worst slowdown in nearly two a long time. The assertion was made as part of a media briefing on steps to enhance u . S .’s financial increase.
Sitharaman said the authorities are lifting the ban on the buy of new vehicles utilizing government departments. “So far, the government departments were banned from buying cars. They will now be actively informed to replace their old ones,” Sitharaman stated. The authorities have additionally raised the price of depreciation on all vehicles, regardless of their type, and purchased from now till March 2020 by 15 percent, bringing the total depreciation to 30 percentage.
Next, the concept to levy a one-time registration fee on motors required to be paid upfront has been deferred till June 2020, Sitharaman stated. The finance minister also issued a clarification on some factors that she said had been a cause for a subject for automobile customers.
She said BS4 compliant motors purchased until 31st March 2020 would continue to be operational for the entire duration of registration. “So the fear that ‘what occurs to my BS4 car?’ (submit BS6) want now not be in everybody’s mind. As long as their registration is on, they’ll be allowed, and they’ll be as good as another vehicle,” she stated.
While the government will be cognizant of putting in place infrastructure for improvement of electrical car ancillaries and additives, consisting of batteries, for export, both EVs and internal combustion cars will stay registered, she stated.
The government might have gone beforehand with the scrappage policy, something that the automobile enterprise has aggressively stressed. Still, the identical is on hold because it wishes to create the important infrastructure for it, Sitharaman stated.
While the latest announcement is a step inside the proper path, the finance minister did not announce any good-sized steps that could have a first-rate on-the-spot impact in reviving vehicle sales. For instance, apex automobile frame SIAM and many automakers had entreated the government to reduce the GST price on motors to 18 percent from 28 percent announcing the move is imperative to stoke consumer demand. Still, no such declaration changed into made these days.
India Auto Inc welcomes the move. Here’s what a few officials had to mention;
Rajan Wadhera, President, SIAM: The elimination of the ban on the purchase of cars through government departments and 15 percent higher depreciation ought to improve a car call for inside the quick-time period, particularly automobiles intended for industrial use. The deferment in a revision of 1-time registration rate until June 2020 is also a totally effective step as the industry turned into reeling below the pressure of price increases. Higher registration fees would have impacted calls negatively. The industry is thankful for the FM’s rationalization that both EVs and ICE motors will remain in destiny. Further, the clear message by the Finance Minister that BS-IV vehicles which can be bought until 31 March 2020, will all remain operational for their whole duration of registration has cleared the air in this concern, and consumers will now not hesitate to buy BS-IV cars, stated Mr. Wadhera.
Martin Schwenk, MD & CEO, Mercedes-Benz India: “We welcome the firm measures introduced through the Finance Minister these days. The host of tremendous measures introduced has given the whole lot required increase to the automobile area and units a clean roadmap. We are confident that those measures as soon as carried out will support growth and force call for for the car region.”
Anand Mahindra, chairman, Mahindra Group: “I applaud the methodical method of ‘bucketing’ key drivers of the economic system & administering a healthful dose of 1st-useful resource to each. I’m obviously enthused that the Auto industry changed into recognized as a primary increase generator & given a bucket of its very own!””
Pawan Goenka, MD, Mahindra & Mahindra: Announcements today through the FM Nirmala Sitharaman are a massive sentiment booster. For auto, the financing woes are completely addressed, I agree with. Many other indirect demand boosters. With this and “extra to come back,” we are hoping to peer a great festive demand.”
Guenter Butschek, CEO & MD, Tata Motors: “Tata Motors welcomes the comprehensive set of actions laid out using the government and believes measures to improve liquidity, power increase and reduce the price of ownership of the motors, have to assist the industry get again on track. We thank the authorities for listening to the concerns of the enterprise empathetically and doing their nice beneath cutting-edge situations.”
Rahil Ansari, Head Audi India: We notably recognize the authorities’ assist for the automotive enterprise. Now it’s miles as much as the banks and NBFCs (Non-Banking Financial Companies) to deliver the acceptance as true with and benefit given. We are confident that the ease of access on loans to consumers can also be improved via banks. Independent of this, we’ve had and will maintain to have strong in-house financing that clients can continuously rely on. Additionally, the readability on BS4 automobiles and selection to customers confusion customers are going through. We have continually maintained that luxury isn’t a sin and are thus enthused by way of authorities’ cognizance on reviewing the Super Rich tax. This should enhance consumer sentiment, in particular inside the luxury industry.