CHENNAI: Finance Minister Nirmala Sitharaman has attributed the current slump in automobile sales to ‘sharp’ consumers. “Vehicles have a lifespan of 15 years. To ensure their purchases last longer, consumers have stopped buying BS IV, and are probably waiting for the launch of BS VI versions,” she said while delivering the G Ramachandran memorial lecture in Chennai.
“I do not know what is the fact but due to it, the automobile industry has ended up having huge unsold inventories of BS IV vehicles,” she said. “We are aware of the problems being faced by the auto industry. The government is receptive, and measures are being taken to deal with the challenges,” she said, speaking at the event organised by the Southern India Chamber of Commerce and Industry.
Speaking on bad loans in banks, the minister said financial institutions have to strengthen their mechanism of assessing asset quality. She said the government was contemplating providing more powers to the central bank to regulate the institutions and market more efficiently. Lauding the corporate tax reduction measure taken by the Centre and it’s timing, she said budget should not be the one and only time when government speaks about fiscal situation. She said the corporate tax reduction was announced in between two budgets to send a message that whenever a situation arises, this government will take immediate action to deal with it.
She also said the Centre has taken many reforms in different sectors from agriculture to export to deal with the economic slowdown situation. “Exporters are being facilitated and helped to ensure that they are competitive enough in international market. Similarly, the focus is also on agriculture sector”.The minister also highlighted the government plans of creating direct sea link connectivity from Chennai port to Vladivostok port in Russia. She said along with reforms to deal with present economic situation, the government is also looking at measures to tap in long run benefits.