To aid the ailing auto-sector, the finance ministry announced some measures at a press meet on Friday.
Finance Minister Nirmala Sitharaman said that BS-IV vehicles purchased up to March 2020 will remain operational till they are registered.Read more ↓
Considering the current slowdown in the auto sector, Union minister of road transport and highways Nitin Gadkari said earlier on Friday, that as per the suggestion of the central government’s think-tank Niti Aayog, there will be no ban imposed on running petrol or diesel vehicles. “Government is fully supporting automobile industry and that is why I said that we are not giving any instruction to ban petrol vehicles,” he said.
In June, Niti Aayog had set a deadline of 2023 and 2025, to phase out running of petrol and diesel 2 and wheelers, respectively, to promote the acceptance of electric vehicles in the country.
Earlier this month, 63 clauses of the Motor Vehicles (Amendment) Bill 2019 was also passed in the Parliament that included increased penalties for violations of rules and also using old petrol/dieselvehicles.
FM Sitharaman said on Friday that an additional 15 percent depreciation will be placed vehicles acquired from now till March 2020, taking it to 30 percent. Further, the revision of one-time registration fees was deferred to June 2020.
Government will be considering various measures, include a scrappage policy and will need to create the necessary infrastructure for it, said FM Sitharaman.
Signs of a slowdown in the economic activity started showing at the start of the year when GDP data for the March-ended quarter slid to a near five-year low of 5.8 percent. The government will be announcing the GDP data for the April-June quarter later this month, and most analysts expect it to be lower than the previous quarter.
Clear signs of a slowdown in the economy, especially in segments like auto and the not so reassuring quarterly results discouraged investors.
Domestic passenger vehicle sales, a key economic indicator, decline by 31 percent in July from the same period a year ago, the steepest dip in nearly two decades. The auto-sector laid off 350,000 workers since April.