Relief for the automobile sector has just been issued officially by the Finance Minister of India, Nirmala Sitharaman. In a recent conference, she has introduced certain new measures and schemes. These schemes will surely boost the liquidity in the automobile industry at both the manufacturers’ and customers’ ends.
The automobile industry has been facing a major downfall for the last few months in India. The government’s intervention to improve the situation was surely the need of the hour. The government has come up with some healing measures which would definitely help deliver some relief for the automobile sector.
The automotive sector in India is facing a major downfall in sales. This is due to the upcoming rules and regulations that would be plying on the Indian roads from the next year. People are not fully aware of the rules and regulations that are yet to come.
One of the major new regulations is BS6. This lays down the new emission norms for the vehicles running on the Indian roads.
Want to have a clear insight on what BS6 is? Read about it here.
In a recent official update, Smt. Nirmala Sitharaman, the Finance Minister of India announced a slew of measures. All these will help the automobile industry in India to move at a comparatively faster pace.
These were the major decisions taken in the session were:
- Buyers can purchase BS6 compliant vehicles and get them registered up to 31st March 2020
This has given an additional time of almost 4 months to the auto industry to put its stock on sale and let the buyers consume all the manufactured stock until now. Both the manufacturers and the buyers will be benefitted due to this extension as the manufacturers will be able to clear the stock out and the buyers will get a chance to avail huge discounts on these vehicles.
The registration of these vehicles will be valid according to the older 10 & 15-year rule of the government where a diesel vehicle has a validity of 10 years and the petrol vehicle has a 15-year validity.
- Revision of the one-time registration fee
In order to boost the demand for automobiles in India, the government has decided to call off the revision in the one-time registration fee of the vehicles. Earlier the government had decided to increase the registration fees on the BSIV vehicles. Seeing the dipping demand, the government has now decided to keep the fee the same and give a full-time legal registration to all the BSIV vehicles purchased till March 31st, 2020.
- Increased depreciation on all the vehicles
The depreciation on all the vehicles has been increased by 15%. Earlier the depreciation on all the vehicles was calculated to be 15%. This has now been increased to 30%. The government aims to increase the sale of commercial vehicles by this measure.
- The in-house ban lift
The government has lifted the ban on the earlier stated rule under which the government bodies were not allowed to upgrade their vehicles before BSVI went live. Now, according to the finance minister’s statement, the government bodies will now be allowed to upgrade their vehicles to new BS6 compliant vehicles. Also, the government will push the officials to upgrade government vehicles to help increase sales.
- The scrappage policy
The government plans to imply a new scrappage policy. Under this policy, the government will take the unfit vehicles off the roads. This will also lead to an increased demand for new vehicles. The auto industry has been longing for this rule since ages and finally, the government has now taken this into consideration.
- Welcoming EVs
The government will continue registering both EVs and ICVs until the first quarter of 2020. Post this, new registration norms will imply. The government plans to introduce certain subsidies on the EVs and is actively working to get this done.
The Automotive Component Manufacturers Association of India(ACMA) president Ram Venkataramani said “ The announcements made by the honourable finance minister are quite promising and assuring. We really look forward to an improved situation in the Indian automotive industry due to these measures. We hope these measures prove to be a relief for the automobile sector”
With these new measures coming up, we can expect the auto industry of India to rise a bit in terms of sales and job provisions. These important decisions took by the FM are promising and will surely provide relief to the automobile sector which has been lying in low stakes from the last 9 months.
With all the upcoming rules and regulations in the industry, we expect the auto industry to raise a bit and see the bright side soon. The plants will no longer have to observe any no production days and will see a surge in the sales too.
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