SIAM asks Modi ministry to go for an economized excise duty on vehicles

In a list of sessions with the new ministers of the Modi-led ministry, auto industry body SIAM has sought to opt for an economized excise duty on vehicles, new foreign trade policy and enhanced export incentives for vehicles, among other to boost the annoyed sector.

A delegation led by SIAM President Vikram Kirloskar had met ministers of Commerce and Industry, Road Transport, Environment and Heavy Industries this week highlighting key issues and seeking support from the new government ahead of the Budget that is expected next month.

Society of Indian Automobile Manufacturers (SIAM) said in a statement that the objective of these meetings was to apprise the ministers of the current status and challenges being faced by the industry.

Specific suggestions made included opt for a reduced excise duty on vehicles, new foreign trade policy and enhanced export incentives for vehicles, it added.

In the interim Budget, excise duty on small cars, scooters, motorcycles and commercial vehicles were cut to 8% from 12% earlier.

The same for SUVs was slashed to 24% from 30%, while on large cars it was reduced to 24% from 27% earlier and mid-sized cars to 20% from 24% previously.

SIAM further said that other issues discussed in the meetings included streamlining and free inter-state movement of vehicles, promotion to electric and hybrid vehicles and prevention of overloading.

Encouraging alternative fuel vehicles, enhancing road safety, emission and fuel efficiency norms, fleet modernisation and scrappage policy were also discussed, it added.

Commenting on the development, Kirloskar said that they were very encouraged by the response of all the ministers and felt confident that the ministry would take a clear and holistic view of the automotive industry and work towards creating an enabling stable policy framework to ensure sustained growth of the auto industry.

While the SIAM representatives are yet to meet Finance Minister Arun Jaitley, it is impressing upon the ministers of the new government on the key role played by the sector, which accounts for 7% of the GDP, in the country’s economy.

The SIAM delegation also highlighted about the potential of the industry to contribute to the growth of manufacturing, exports as well as to the economy as a whole, including rural sector.

Last year, the auto industry had clocked a turnover of Rs 4,00,000 crore, while the total investment in the last 5 years on the sector is to the tune of Rs 70,000 crore.

India’s automobile industry has been struggling from a prolonged market slump. Car sales in India fell for the second consecutive fiscal in 2013-14 with a drop of 4.65% at 17,86,899 units as compared to 18,74,055 units in the previous fiscal.

In the 2012-13, car sales in India fell 6.69%, which was the first decline in a decade.

Last month car sales in India, however, grew 3.08% snapping two successive months of fall riding on positive sentiments over formation of a stable government at the Centre and lower excise duty in the Interim Budget.