NEW DELHI: The auto industry would continue to engage with the Union government and seek its direct intervention for revival of the sector, said Rajan Wadhera, president of Society of Indian Automobile Manufacturers (SIAM), after the government concluded announcement of the contours of its Aatma Nirbhar Bharat economic stimulus package on Sunday.
The Rs 20 lakh crore stimulus has not set aside any direct benefit to address the auto sector, hit by a general economic slowdown and the Covid-19 situation.
SIAM has had several engagements with the Centre earlier, where specific suggestions were made for demand stimulus, including GST cut from 28 per cent to 18 per cent for a limited period, and an incentive-based vehicle scrappage policy.
SIAM welcomed the focus towards MSMEs, NBFCs and the agriculture sector. “The agri-sector package may benefit the auto sector indirectly in the medium-term, but the Indian automotive industry needed an immediate stimulus to boost demand, which has not happened,” he said.
Indian automotive industry supports employment of more than 3.7 crore people and contributes to 15 per cent of GST amounting to Rs 1,50,000 crore every year, according to SIAM. The sector was already facing an unprecedented challenge with 18 per cent de-growth last year. As per SIAM’s assessment on the Covid-19 impact on vehicle demand this fiscal, Indian auto sector could de-grow -22 to -35 per cent across various segments, if the overall GDP growth is at 0-1 per cent.