In light of the ongoing difficulties being faced by the Indian auto industry, the government is in the process of formulating a policy that would drive demand, Zee Business Executive Editor Swati Khandelwal told Managing Editor Anil Singhvi in this big breaking news.
The Ministry of Heavy Industries and Public Enterprises has prepared a set of recommendations and the discussions on these recommendations by Group of Ministers (GoM) are already on, she said.
Among the key recommendations, relief on Goods and Services Tax (GST), cess and road tax is being contemplated to bring down the cost of ownership of vehicles, Khandelwal said. This would encourage people to come forward and buy vehicles she said adding that this move augurs well for the domestic automobile sector.
The government also wants to implement a uniform road tax across the country, and the work on this issue is also on-going, Khandelwal said and added that each state has a different road tax.
But the biggest of them all is the vehicle scrappage policy. The government will soon announce a scrappage policy, she said. There have been contentious issues on this between the government and the industry. Once this policy is announced, it is likely to benefit the industry. The government is also wanting to increase the productivity and the scale of this sector. This would lessen the dependence of local industry on external markets.
The government is also thinking on signing FTAs (Free Trade Agreements) with countries with which India can increase exports. The government also has a strong focus on manufacturing of Electric Vehicles (EVs). It is securing essential minerals like cobalt, lithium and is also in talks with other countries on mining agreements.
The Modi Government is also thinking on incentivising the EV sector through subsidies and credit support and also on setting up a charging infrastructure in the country. The announcement on all these issues is not likely to come in one go but may come in parts, Khandelwal revealed.