The Hindu Business Line : Centre plans second stimulus for auto sector

(From left) Mr Bhaskar Rao, Transport Commissioner, Government of Karnataka; Mr Akash Passey, Managing Director, Volvo Buses India Pvt Ltd; Mr S. Thiagarajan, Zonal Chairman (Karnataka and Hosur), Automotive Components Manufacturers Association (southern Region); and Mr Sudhir Mehta, Chairman of SIAM Trade Fairs Group and Director of Force Motors, at the inauguration of the ‘Bus and special vehicles expo 2009’ at the Bangalore International Exhibition Centre on Thursday. —

Our Bureau

Bangalore, March 12 The Government is considering another stimulus package for the automobile sector, which will lead to replacement of about 40,000 buses of State transport corporations (STCs).

This is an initiative of the Society of Indian Automobile Manufacturers (SIAM); the Government is learnt to have held talks with the Election Commission on whether announcement of such a package will violate the code of conduct.

According to the initiative, SIAM, in a study conducted for this purpose, found out that there are least 32 State corporations that run over 32,000 buses which are over 15 years old and fall under the overage category. These buses were not being replaced because since 1991 the Centre had stopped giving capital grants for the STCs for replacing the overage buses.

The new stimulus package will be thrown open to all State transport corporations, which means replacement of a total of over 40,000 buses. All STCs will be given capital incentive of between 50 per cent and 75 per cent for replacing overage buses. These buses will have to be deployed in semi-urban, rural and in hilly areas.

In the first stimulus package, under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) scheme, States will get financial assistance up to June for purchase of about 15,000 buses for the urban transport system.

The SIAM study also found out that because of the paucity of buses, over 14 crore km have not been covered so far. With regard to the JNNURM scheme, some of the State road corporations have started floating tenders for purchase of buses.

Sources in SIAM said that though these buses are for the semi-urban and rural areas, even companies such as Volvo and Mercedes Benz, which make high-end buses, can bid for the tenders, as individual States can take decisions regarding the type of buses they will require.

Meanwhile, the SIAM Director-General, Mr Dilip Chenoy, said the Centre had been asked to standardise the bus code regarding the exact specifications on how transport buses should be built.

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