What’s causing auto industry slowdown? Millennials, among other things: FM Sitharaman

What’s causing auto industry slowdown? Millennials, among other things: FM Sitharaman

"We don't have data on the informal sector, as a result, the government can't comment accurately on how many jobs have been created", she said. She also listed reasons like the upcoming Bharat stage-6 (BS6) emission norms and higher registration fees. "There was definitely a good upward trajectory for the automobile sector".

In other measures, while briefing reporters on the "100 days of initiatives and decisive actions taken by the Government", Sitharaman said the Centre has set up a task force to boost investments in infrastructure projects and was in the process of identifying the sectors which needed funding from the Centre. The Finance Minister also assured that the government is aware of the need to respond to the troubles in the auto sector.

However, the finance minister was elusive on GST rate cuts for the auto sector.

One of the reasons for the slowdown, according to the Finance Minister, was "change in the mindset" of the people, who, she said, are now using cab aggregators like Ola and Uber as well as public modes of transportation.

Speaking on the GDP that is hovering around five percent and the scenario that led to this, she said, "The concerns which industries have, we are speaking to them". She, however, added that some of the industry suggestions had already been considered. When asked about a possible rate cut on cars, Sitharaman said that call would be taken by the GST Council at its meeting in Goa next week. Since December 2018, year-on-year monthly decline in sales has been unabated.

Hero MotoCorp, India's largest two-wheeler manufacturer, recorded a 20% drop in sales last month, with Maruti Suzuki suffering a 34% drop during the same period.

Domestic passenger vehicle sales skidded for the 10th consecutive month, falling from 287,198 units in August a year ago to 196,524 units last month and registering a 31.57 per cent decline.

Also she lifted the ban on purchase of vehicles by government departments and allowed additional 15 per cent depreciation on vehicles acquired till March 2020.

'Not Underestimating Growth Pangs' "It is useful for us to remember such dips and rise in GDP growth do happen. Our efforts now are to see how to rise in the next quarter".

Sitharaman said that the government, as part of its move to make India a United States dollars 5 trillion economy, has chalked out various measures, including infrastructure spending and merger of public sector banks, among others.

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