The Hindu Business Line : Govt may extend sops to sustain auto sector growth

Investments
The investment figure as per latest available information is over Rs 64,000 crore and more announcements were under way.
Industry urged to be proactive to think in terms of world class quality and global scales.

Our Bureau

New Delhi, Sept. 5

The Government on Wednesday promised to make a positive intervention if the slowdown in the domestic automotive sector continues.

The Minister for Heavy Industries, Mr Santosh Mohan Dev, told the annual convention of the Society for Indian Automobile Manufactures (SIAM) here that his department had already written to the Finance Ministry seeking excise duty cuts for the auto sector.

He also promised to provide incentives for exports to make India a global hub.

“This year, in the first four months, the performance of the automobile sector has been lower than what we had envisaged. The passenger car segment has grown by 13.03 per cent whereas the commercial vehicle segment by 2.06 per cent.

“The two-wheeler segment actually decelerated and the performance of the three-wheeler segment has not been encouraging… We are keenly watching the outcome of the second quarter. If need be, we will certainly intervene to sustain growth,” Mr Dev told the gathering.

About investments in the automobile sector, the Minister said against last year’s announcement of investments of Rs 11,000 crore, the figure as per latest available information is over Rs 64,000 crore and more announcements were under way. “Yet, many of these investments are perhaps at the sub-optimum scale. While the Government would not like to set a minimum investment limit like China, industry needs to be proactive to think in terms of world class quality and global scales.

“If there is not enough demand in the domestic market, then please export. I had mentioned last year and I would like to reiterate that our emphasis will be on exports. We will incentivise exports to make India a global hub,” he added.

About the developments in the Automotive Mission Plan (AMP) 2006-2016, Mr Dev said that a dialogue had been started with the ministries concerned for its implementation, adding that the Government was in the process of finalising an apex body to monitor the developments of the AMP.

Calibrate tariffs

At another session of the SIAM meeting, the Commerce and Industry Minister, Mr Kamal Nath, promised protection to the infant automobile sector against external competition by suitably calibrating tariffs.

“India will calibrate tariffs at the World Trade Organisation commensurate with the country’s interests that will help the infant automobile sector. It has to be protected and I am giving the assurance that it will be protected at the WTO,” he said.

Level-playing field

Mr Nath also said that there was a need for a level-playing field for competitiveness that includes remission of taxes and levies.

“A trade agreement only works if there is a level-playing field. Industry has to work with State governments where they have plants to seek refund of levies linked to exports. The Union Government would discuss the issue with State governments,” he added.

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