The automobile sector in the country is facing the biggest slowdown in sales in almost two decades, with sales continuously falling for the past nine quarters.
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".
Sitharaman was addressing media on "100 Days of Bold Initiatives and Decisive Actions" of the government at 2 pm at Chennai. The domestic sales of passenger vehicles, too, declined for a tenth consecutive month, falling a whopping 31.57% to 1,96,524 units in August 2019. Whole lot of factors are influencing automobile sector.
While the Finance Minister did not give any clarity on what the Centre is doing to address the slowdown, she said that the government is talking to the industry to see how best it can help them.
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"The automobile and components industry has been affected by BS 6 [norms] and the mindsets of millennial, who now prefer to have Ola and Uber rather than committing to buying an automobile", Sitharaman told reporters in Chennai, according to ANI. The auto industry has been hoping for a GST rate cut from 28 per cent to 18 per cent to bring it out of a demand slump.
On the question of the auto industry asking for a Goods and Services Tax (GST) rate cut from 28% to 18%, she said, "I can not singularly take a decision on GST".
She also said interactions are being held not only in Delhi but across the length and breadth of the country with various economic sectors to work out strategies to ensure the creation of more jobs. Overall passenger auto sales dropped by a significant 31.57 per cent last month with 196,524 units sold compared to 287,198 units in August 2018.
Also she lifted the ban on purchase of vehicles by government departments and allowed additional 15 per cent depreciation on vehicles acquired till March 2020. Dips and rise in GDP growth do happen, but we are not sitting without responding to boost it.
While stating that bank mergers were announced for the banks to benefit from each other, the FM said the date of merger had to be decided by the boards of respective banks.