Bikky Khosla | 10 Sep, 2019
Automobile sales in August witnessed the sharpest fall in
overall sales since Society of Indian
Automobile Manufacturers (SIAM) started recording
wholesale vehicle sales in 1997-98. Industry data showed on Monday that sales
in all segments, including passenger vehicles and two-wheelers, stood at
18,21,490 units last month as against 23,82,436 units in August 2018, a
fall of 23.55 percent. These figures clearly show the kind of situation the
Indian automobile sector has been going through off late.
figures came on the heels of the recent remark -- "What slowdown? New auto
entrants with exciting new models are cruising"-- by a top official from
the country’s government think-tank. At a time when all major manufacturers
from the segment are closing down plants or suspending their production, such a
remark is no doubt unfortunate. The first step towards solving a problem is to
acknowledge its existence, and fortunately the Centre seems to be aware of the
Minister Nirmala Sitharaman announced a slew of measures including lifting ban
on purchase of vehicles by government departments, and allowing of additional
15 percent depreciation on vehicles acquired from now till March 2020. Last
week, it was reported that the central government is open
to take the industry's proposal on reducing the GST on automobiles to the GST
Council as it meets in Goa on September 20.
No doubt it
would be a Hobson's choice for the government. According to an estimate, an
across-the-board GST rate cut for the sector from the highest GST slab of 28
percent to 18 percent would lead to GST revenue loss of at least Rs 30,000
crore. No doubt, this amount is massive, but we cannot ignore the fact that lakhs
of jobs are at stake. According to SIAM, a
million contractual manufacturing jobs are at risk due to this auto sector slowdown,
arresting which, therefore, must be a top priority of the Centre.
invite your opinions.