Government announces new measures to boost auto industry
The Finance Minister announces a bunch of initiatives focusing on electric and old vehicles pleasing the auto industry
Putting the auto industry at ease, Finance Minister Nirmala Sitharaman has announced a plethora of measures. The government has confirmed that the increase in one-time registration fees has been postponed till June 2020. She also announced a higher depreciation (from 15% to 30%) on vehicles bought before the end of this financial year.
The higher depreciation will help in tackling the built-up inventories piling up at manufacturers as well as dealers. The FM also confirmed that all pending GST refunds will be cleared within 30 days. New requests for GST refund will be made within 60 days. The government will also work on a scrappage policy for old vehicles.
Further, Ms. Nirmala Sitharaman, Finance Minister, India, said,
“There was confusion because government wanted to make an announcement as regards to encouraging electric vehicles and batteries. That confusion we want to dispel completely. BS-IV vehicles which are purchased up to March 31, 2020 will remain operational for their entire period of registration. It will not be that from 2020, BS-IV will be off the roads. As long as their registration is on they will be as good as any other vehicle.”
Besides that, Ms. Sitharaman also announced that the ban on various government departments on purchasing new vehicles for replacing the old ones will be lifted. Also, to support the government’s plan for an electric future, the FM announced that the government will setup infrastructure for development of ancillaries, including batteries for export.
The auto industry has welcomed these announcements by the Finance Minister. Mr. Rajan Wadhera, President, SIAM, said,
“SIAM is thankful to the Hon’ble Finance Minister, Ms Nirmala Sitharaman, for addressing the difficulties of the automotive sector by announcing specific measures to boost demand. The industry highly appreciates that the FM has responded with a package of measures within 2 weeks of consultation with the industry.”
Passenger vehicle sales in India have been falling for 9 consecutive months amidst a falling economy. The industry is now waiting for a GST rate cut which will be a huge benefit for sales.