Auto industry's woes not attributable to regulations: Javadekar
Published: Feb 10, 2020
By TIOLCorplaws News Service
NEW DELHI, FEB 10, 2020: THE Union Minister for Heavy Industries & Public Enterprises, Mr Prakash Javadekar, today in Parliament stated that there were multiple regulations arising due to requirement of meeting internal Standard of Safety, fuel economy and environment across various sectors including Automobile Sector. These are statutory regulations and cannot be termed as over regulation. Moreover, current problems being faced by Auto Industry cannot be attributed to regulatory issue.
The Government, as a policymaker, always attempts to keep and improve momentum of the economy through a package of measure through stakeholder consultations for comprehensive and continued development of the auto sector as and when required. Some of the steps taken by the Government to counter automotive slowdown can be summarized as under:
1. Corporate Tax has been reduced to 22% resulting into more savings for the Manufacturing Companies. This move would help in uplifting the market and promote future investments in turn providing a boost to the economy.
2. Government has clearly indicated that Internal Combustion Engine (ICE) and Electrical vehicles (EVs) would be continued to registerin future. This clarification would clear doubts among the end consumers and hence would help in boosting the sale of ICE and EVs.
3. Government is working on a Scrappage Policy. Ministry of Road, Transport & Highways (MoRTH) being the nodal ministry has almost finalized the Scheme. This policy would help to get unfit vehicles off the roads and thus increase the demand for new vehicles.
4. Government has announced that funds worth Rs. 70,000 crores would be released for PSU banks' recapitalization. This would improve the liquidity situation of the banks resulting into more finances available for dealers and end- consumers hence increasing demand for new vehicles.
5. RBI has announced that the interest charged for vehicle purchased has to be linked to the Repo rate announced by the Central Bank. T his would mean that banks would have to reprice the interest rates on loans every three months resulting in lesser burden for consumer.
