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 the u . S .’s financial increase.
Sitharaman said the authorities is lifting the ban on buy of new vehicles by means of 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 has additionally raised the price of depreciation on all vehicles, regardless of their type, and purchased from now till March 2020, by means of 15 percent bringing the total depreciation to 30 percentage.
Next, the concept to levy a one-time registration fee on motors and 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 subject for automobile customers.
She said BS4 compliant motors purchased until 31st March 2020 will 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 lengthy as their registration is on, they’ll be allowed and they’ll be as good as another vehicle,” she stated.
While government will cognizance on 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 been aggressively stressful, but the identical is on hold because it wishes to first create the important infrastructure for it, Sitharaman stated.
While latest announcement is a step inside the proper path, the finance minister did now not announce any good sized steps that could have a first-rate on the spot impact in the direction of reviving vehicle sales. For instance, apex automobile frame SIAM as well as 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, but no such declaration changed into made these days.
India Auto Inc welcomes move. Here’s what a few officials had to mention;
Rajan Wadhera, President, SIAM: The elimination of ban on purchase of cars through government departments and 15 percent higher depreciation ought to give a exact improve to car call for inside the quick time period, particularly automobiles intended for industrial use. The deferment in 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 and higher registration fee would have in addition impacted call for negatively. Industry is thankful for the FM’s rationalization that both EVs and ICE motors will remain registered in destiny additionally. Further, the clear message by 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 a whole lot required increase to the automobile area and additionally 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 recognised 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 by means of the government and believes measures to improve liquidity, power increase and reduce 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’s assist for the automotive enterprise. Now it’s miles as much as the banks and NBFCs (Non Banking Financial Company) to deliver the accept 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 aid all fuels will dispose of the confusion that customers are going through. We have continually maintained that luxurious isn’t a sin and are thus enthused by way of authorities’s cognizance on reviewing the Super Rich tax. This should enhance consumer sentiment in particular inside the luxury industry.