COVID-19 impact: Prakash Javadekar assures the auto sector of government support
Society of Indian Automobile Manufacturers (SIAM) organised its 60th Annual Convention on Friday, titled "Re-Building the Nation, Responsibly".
At the convention, Guest of Honour, Prakash Javadekar, Union Minister of Environment, Forest and Climate Change, Information and Broadcasting and Heavy Industries and Public Enterprises, Government of India, assured the automobile industry of support from the Government in reviving demand, which has taken a dire hit owing to the COVID-19 pandemic.
Putting across recommendations to the government towards boosting demand in the automobile sector, Rajan Wadhera, President, SIAM and Senior Advisor, Mahindra and Mahindra, said, "While we thank the government for all the support it has extended to the auto sector, such as the reduction in the repo rates, credit access etc. We now need more specific steps to boost demand in the sector, as the festive season is fast approaching. Some of the key asks include lowering of GST rates from 28 to 18 per cent across all vehicle categories and automotive components, an incentive-based vehicle scrappage policy and taking concrete steps towards realising the vision of the Automotive Mission Plan."
Reassuring the automobile industry, Prakash Javadekar said, "Infrastructure is the only answer to the growth story of India, and the government is looking at investing 100 lakh crore towards infrastructure projects over the coming times. This will also hugely benefit the automobile industry."
While acknowledging the auto industry's recommendation for a reduction in GST rates, he further added, "GST reduction will ultimately benefit the government and I will be taking it up with the Finance Minister and Prime Minister's office. He also assured that a well-entrenched vehicle scrappage policy will come soon that will bode well for the automobile industry."
Javadekar added, "The government has now shifted lockdown to containment zones. There will be no lockdowns and supply-side blockages will ease out. The Government is also focusing on e-mobility by pushing for creating better infrastructure and providing an incentive to electric vehicle manufacturers. Once the cost of electrified vehicles goes down, demand will increase and this segment will be highly profitable."
Uday Kotak, President, CII and Managing Director & CEO, Kotak Mahindra Bank, commented, "In the last several months, the Government of India has shown high sensitivity to lives, livelihoods and the overall economy. Now is the time for the Government and the industry to join hands and work in partnership, to salvage the current slump. Owing to the COVID 19 pandemic, we are in a "never normal period" with new opportunities and challenges. As the festival season is approaching, we expect to see an increase in demand. Therefore, it is now imperative for us to ease out the supply chain bottlenecks. Money is aplenty, banks are ready, willing and eager to extend easy loans and financing option. We need to make sure that OEMs do not face any supply-side disruptions".
Kenichi Ayukawa, President-Elect, SIAM and Managing Director and CEO, Maruti Suzuki India, said, "The industry is looking forward to sound development which means, increase in production, sales, exports and more localisation of parts including electronics. It means Self-reliant i.e. Atmanirbhar Bharat".