For
Union Minister Nitin Gadkari, it’s been a journey from taking on a confrontationist
attitude to one of being benign and accommodating. At the 59th Annual Convention of the Society
of Indian Automobile Manufacturers (SIAM), held in the Capital on September 05,
2019, the Minister assured the ailing, bleeding and battered Indian auto sector
of pro-reform policies for revival.
It
was exactly two years back in September 2017 that at a similar annual
convention of SIAM the Minister had stated that “petrol diesel banaane
walo kaa band baajaa bajaana hai” (I will take to task the makers of
petrol and diesel vehicles).
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THE FULL REPORT: GADKARI MAKES THE INDIAN AUTO INDUSTRY THE WHIPPING BOY
With
the Indian auto industry in the dumps and sales of vehicles slipping for the
last nine months, the Minister thankfully changed his script while addressing
the leaders of the Indian auto industry gathered at the SIAM convention. “I
also want to clarify that though there have been talks that government is
planning to ban petrol and diesel vehicles, we are not going to do anything
like that,” Gadkari stated.
He
also assured the automobile industry of support from the government and said
that he will take up the industry’s demand of GST reduction with the finance
minister. “GST on electric vehicles has been reduced from 12% to 5%. I will
propose to the finance ministry to make the same benefit available for hybrid
vehicles,” he told the gathering.
Gadkari
was speaking at the SIAM convention titled “Building the Nation, Responsibly:
Moving into a New Era of Auto Industry”. At the convention, Chief Guest Nitin Jairam
Gadkari, Minister for Road Transport& Highways and Micro, Small &
Medium Enterprises, Government of India,, “The industry has asked that there
should be reduction in GST of petrol and diesel vehicles considering the
forthcoming increase in prices of vehicles and the BS VI norms deadline. Even
if GST is reduced for some time, it will help the sector to increase vehicle
sales.”
Talking
about the issues related to auto financing, Gadkari asked the auto industry to
establish their own, proprietary financing arm to boost sales. Gadkari assured
that the government is trying to bring out the scrapping policy quickly, which
will lower production costs to a huge extent.
Rajan
Wadhera, President, SIAM & President (Automotive Sector), Mahindra &
Mahindra Ltd reiterated the need to reduce GST on automobiles to Gadkari. He
also highlighted the need for the government to consider a single nodal
regulatory ministry for the auto industry. “The automotive industry is integral
to economic and social development of the nation. With BSVI norms coming into
effect from April next year, restrictions on different vehicles based fuels
needs to be removed for the auto industry to be at par with the best in the
world when it comes to pollution,” he said.
He
added that, “The automotive industry constitutes almost 50% of manufacturing
GDP, 15% of GST revenue and employees 37 million people directly and
indirectly. Till now, 15,000 contractual manufacturing jobs and have been lost
and another million are at risk if the slowdown is not reversed.”
Uday Kotak, President- Designate, CII and
Managing Director & CEO, Kotak Mahindra Bank Ltd said, “Auto industry needs
to emphasise on exports to boost supply. This will help to overcome the stress
present in the domestic market. The rupee which is weak at present will also
favour this method.”
Speaking
on the auto component industry, Ram Venkataramani, President, ACMA &
Director, Amalgamations Component Group, noted that the auto component industry
crossed the 57 billion dollar mark in 2018-19. Talking about the importance of
the sector, he said “The industry currently employs 50 lakh people and
contributes 2.3% to the country’s GDP. The current transition to BS VI norms
has also impacted our revenues to an extent.”
Kenichi
Ayukawa, Vice-President, SIAM and MD & CEO, Maruti Suzuki India Ltd,
appreciated Gadkari’s assurances to help the auto industry and highlighted the
need to collaborate with various stakeholders to break through the crisis.