After a series of announcements concerning the COVID-19 relief package, the auto industry finds itself without any direct intervention that would help turn things around.
With the Indian auto industry facing a myriad of challenges like the hike in taxes via GST, the advancement of emission norms, EV-related flip-flops, and a general slowdown in the economy, sales have dropped to a historic low.
So, many in the industry were expecting some relief measures and had put forward proposals like a limited-period reduction in base GST rates from 28 percent to 18 percent, and an incentive-based vehicle scrappage policy. However, no such measures were announced and neither were there any others aimed at the auto sector.
Rajan Wadhera, President, SIAM, said that while the agricultural sector package may benefit the auto sector indirectly in the medium term, the Indian automotive industry needed an immediate stimulus, and that hasn’t happened.
The Indian auto industry supports the employment of more than 3.7 crore people and contributes to 15 percent of GST, amounting to Rs 1,50,000 crore every year, thus an intervention of some sorts could have gone a long way in helping the Indian economy.
SIAM has said that it will continue to engage with the government and attempt to seek direct interventions. It will also seek to include dealers under the MSME Act to help improve their liquidity. However, with no indications of anything in the pipeline, the industry and the economy will have to brace for tough times ahead.