Economy

Govt will respond to automobile industrys demand, says FM Sitharaman

Govt will respond to automobile industrys demand, says FM Sitharaman

Amid concerns over the slowdown in the automobile sector, Finance Minister Nirmala Sitharaman on Tuesday reasoned that "millennial mindset" of using app-based cab services were the reason why people were not buying cars. "Millennials prefer to use Ola or Uber or take the metro to buying automobiles", she said in Chennai.

Sitharaman was addressing reporters in Chennai to mark the National Democratic Alliance (NDA) government's first 100 days in office in its second consecutive term.

New Delhi| Finance Minister Nirmala Sitharaman today spoke about the reasons for slowdown in the auto sector.

Domestic passenger vehicle sales skidded for the 10th consecutive month, falling from 287,198 units in August past year to 196,524 units last month and registering a 31.57 per cent decline. "Transition to Bharat Stage VI emission norms and higher registration fee have also affected the sales", she added. She said that work is going on on the suggestions received from the industry for auto components.

The numbers were released by the Society of Indian Automobile Manufacturers (SIAM) on Monday. "This is a major reason for slumping sales in the auto industry", she said. Vehicle sales across categories registered a decline of 23.55 per cent to 1,821,490 units from 2,382,436 units in August 2018, it added.

When asked about the slowdown in auto sector, which is said to be the worst in almost two decades, the finance minister said, "It is true that the automobile sector in India had a good time till two years ago, there was definitely a good upward trajectory for automobile sector".

In July, auto sales had dropped by 18.71 per cent from the same month last year, which was the sharpest decline in almost 19 years.

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The sector slowdown has led to companies resorting to production cuts even as many dealers have laid off employees or shut shop themselves.

She said the sector has been impacted by a number of factors.

Last month, the FM had announced several steps including making BS IV vehicles purchased up to March 2020 operational for the entire period of registration.

On the mega-merger of public sector banks, she said the government has announced the merger of 10 PSBs into four strong lenders with countrywide networks and global reach to boost credit and revive economic growth, said the minister.

'Not Underestimating Growth Pangs' "It is useful for us to remember such dips and rise in GDP growth do happen".

She also defended the bank mergers and said the effective dates for mergers should be decided by the bank boards. "Our attempts now and full focus now are to see how it can rise in the next quarter".


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