There are multiple regulations arising due to requirement of meeting internal Standard of Safety, fuel economy and environment across various sectors including Automobile Sector. These are statutory regulations and cannot be termed as over-regulation. Moreover, current problems being faced by the Auto Industry cannot be attributed to regulatory issue.
This information was given by the Minister of Heavy Industries & Public Enterprises, Prakash Javadekar, in a written reply in the Rajya Sabha.
The Government, as a policymaker, always attempts to keep and improve the momentum of the economy through a package of measure through stakeholder consultations for the comprehensive and continued development of the auto sector as and when required. Some of the steps taken by the Government to counter automotive slowdown can be summarized as under:
- Corporate Tax has been reduced to 22% resulting into more savings for the Manufacturing Companies. This move will help in uplifting the market and promote future investments in turn providing a boost to the economy.
- Government has clearly indicated that the Internal Combustion Engine (ICE) and electrical vehicles (EVs) will be continued to registerin future. This clarification will clear doubts among the end consumers and hence will help in boosting the sale of ICE and EVs.
- Government is working on a Scrappage Policy. Ministry of Road, Transport & Highways (MoRTH) being the nodal ministry has almost finalized the Scheme. This policy would help to get unfit vehicles off the roads and thus increase the demand for new vehicles.
- Government has announced that funds worth Rs. 70,000 crores will be released for PSU banks’ recapitalization. This would improve the liquidity situation of the banks resulting in more finances available for dealers and end- consumers hence increasing demand for new vehicles.
- RBI has announced that the interest charged for vehicle purchased has to be linked to the Repo rate announced by the Central Bank. This will mean that banks will have to reprice the interest rates on loans every three months resulting in lesser burden for consumer.