The government’s recently announced ₹20-lakh crore economic package has left the automobile sector out, Rajan Wadhera, president of Society of Indian Automobile Manufacturers (SIAM), said on Monday. He pointed out that the industry has been in dire need an immediate stimulus to boost demand and stop job losses.
He added that the sector, already facing a challenge with the 18% contraction last year, could see a further shrinkage in the range of 22-35% in various industry segments such as passenger vehicles, two-wheelers and commercial vehicles, in 2020-21, if India’s GDP growth ends up at 0-1%.
The industry, Mr. Wadhera said, was “keenly looking forward to some direct fiscal measures which could have boosted demand for the sector and stopped job losses.”
He noted that SIAM has had several engagements with the Centre at various levels, where specific suggestions had been made to stimulate demand, including a cut in base GST rates from 28% to 18% for a limited period and an incentive-based vehicle scrappage policy. This would have “made it a less painful revival and kick started the industry,” he said.
The industry body said the package for the agri sector may indirectly benefit the auto industry. It said dealers needed urgent help with improving liquidity and that they ought to be included under the MSME Act by changing its definition.