FM announces Measures for Auto-Industry Revival after Months of Downfall
The automobile industry around the globe has been witnessing the biggest downfall in two decades. Brands around the world have been making efforts to survive in the industry with related products and schemes. This is being called the worst slowdown and governments from different countries are busy putting their heads together to bring the industry out of this situation.
Nirmala Sitharaman, Finance Minister, India on August 24, announced some measures aimed to revive the auto industry from its worst dropdown. As per the FM, the government is lifting a ban on the purchase of a new vehicle by government departments. Since the government departments were banned from buying vehicles, they will now actively take part to replace the old ones resulting in funding for the automobile industry. The government has also raised the rate of depreciation to 30% on all vehicles until March 2020.
In the next measure, the proposal of the one-time registration fee on vehicles has been deferred until June 2020. Moreover, the BS-IV compliant vehicles that will be purchased until 31st March 2020 will remain operational for the entire period of registration. The government also plans to optimize its focus towards setting up infrastructure for the development of electric vehicle ancillaries and components.
Though the Finance Minister, Nirmala Sitharaman shared measures in favor of the automobile industry, no significant steps have been announced that would have an immediate impact on car sales. As per Rajan Wadhera, President, SIAM, the announcements made will surely affect car sales in the short term. In a statement to media, he said, “The removal of a ban on the purchase of vehicles by government departments and 15 percent higher depreciation should give a definite boost to vehicle demand in the short term, especially vehicles meant for commercial use. The deferment in a revision of one-time registration fee until June 2020 is also a very positive step as the industry was reeling under the pressure of price increases and higher registration fee would have further impacted demand negatively. The industry is grateful for the FM’s clarification that both EVs and ICE vehicles will continue to be registered in the future also. Further, the clear message by Finance Minister that BS-IV vehicles that are purchased till 31 March 2020 will all remain operational for their entire period of registration has cleared the air on this subject and consumers will no longer hesitate to purchase BS-IV vehicles.
Sharbani is the leader of the pack, usually found hard at work creating path-breaking content strategies for the website. When not hiding behind her desktop, you can find her experimenting with mobile photography, jotting down poems, or planning her next getaway. Sharbani has previously worked as a journalist for Dainik Bhaskar and DB Post.