Economy

Stimulus package: New measures unveiled for auto sector to boost demand

PTI New Delhi | Updated on August 23, 2019 Published on August 23, 2019

The government defers revision of one-time registration fees till June 2020,

To allow an additional 15 per cent depreciation, taking it to 30 per cent, on all vehicles acquired from now till March 2020.

In a bid to address slowdown in the auto sector, the government on Friday announced a slew of measures including lifting ban on purchase of vehicles by government departments, and allowing additional 15 per cent depreciation on vehicles acquired from now till March 2020.

Also, BS-IV vehicles purchased up to March 2020 will remain operational for the entire period of registration, Finance Minister Nirmala Sitharaman said.

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The Centre will lift the ban on purchase of new vehicles for replacing all old vehicles by government departments, and consider various measures including scrapage policy to boost demand, she said.

Read also: How the NBFC crisis sent India's automobile sector into a tailspin

Besides, both electric vehicles (EVs) and Internal Combustion Vehicles (ICV) will continue to be registered.

The minister said the government’s focus will be on setting up of infrastructure for development of ancillaries/components, including batteries for exports.

The government will also allow an additional 15 per cent depreciation, taking it to 30 per cent, on all vehicles acquired from now till March 2020.

The revision of one-time registration fees has been deferred till June 2020, she added.

Read more: 2 lakh laid off in last 3 months by auto dealers, says FADA

Leaders from the Indian auto industry had asked the government for a stimulus package, including GST reduction on vehicles, for the sector which has been hit by an unprecedented slump in sales. The passenger vehicles (PVs) segment has been the worst hit, with sales continuing to decline for almost a year now.

As per SIAM figures, vehicle wholesale across all the categories declined by 12.35 per cent to 60,85,406 units in April-June against 69,42,742 units in same period of last year.

Federation of Automobile Dealers Associations (FADA) has stated that nearly two lakh jobs have been cut in the last three months due to the slowdown.
 

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Published on August 23, 2019
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