New Delhi, Auto Desk. The global recession and then the Kovid-19 have badly affected the automobile sector of the country, but expectations about the prospects are not yet over. The government is contemplating giving relief to the domestic automobile sector in the current environment, which will not only help increase the demand in the domestic market, but also establish the domestic industry as a strong alternative to China in the global market. The automobile sector is likely to be given some relief as was given during the 2008-09 recession. Under this, the government also has the option of relief in duties.
Sources in the automobile sector said that they have held several discussions with representatives of the government. It is being agreed that there is a need to give a big relief package to this sector which provides direct and indirect employment to 10 lakh people in the country. The industry has been demanding that the GST rate be given relief since last year’s recession. Earlier, the government argued that the auto sector cannot be given tax rate relief given the revenue collection situation. Now the automobile sales have come down very cold. In such a situation, if the domestic demand increases by reducing the GST rate, it will also increase the government’s revenue. The package will also position India as a reliable alternative to China in the automobile sector. Currently, GST is 28 percent on the auto sector.
According to sources, in the current global environment regarding China, there is a possibility that there will probably be a doubt about China-made automobiles. India can take advantage of this situation. Recently, the Chief Minister of Tamil Nadu has invited 11 major automobile companies of the world to set up plants in their state. Many of these companies are in China. The central government package will be in keeping with these companies too.
Companies upset with containers stopped at ports
The automobile sector has been given a sign of relief when the automobile imported ports are being stopped at all the ports of the country. The production of auto companies is being affected by stopping imported ports in the name of checking. Due to Kovid-19, the country’s auto companies are already operating at 50 percent of their production capacity. Rajan Badhwa, president of Siam, the apex body of auto companies, said, “The auto industry is slowly returning to normalcy. In such a situation, the supply of imported containers is disrupting, which is harmful for the entire industry. Acma, an association of companies making automobile components, has also told the government that domestic auto companies are suffering losses due to forcibly stopping imported containers at all ports of the country. Roughly, India imports 30 percent of its automobile parts from China.
