Union Minister for Heavy Industries & Public Enterprises Prakash Javadekar at the 60th Annual Convention of Society of Indian Automobile Manufacturers (SIAM) said that the scrappage policy is ready and will be announced soon. He said, "The scrappage policy has been on the agenda and the government is working on it actively."
Javadekar added that all stakeholders have also given their inputs. However, he didn't reveal any details about the exact date of the announcement. Javadekar also assured the auto industry to discuss the suggestion of temporary GST cut with Finance Minister Nirmala Sitharaman and Prime Minister Narendra Modi.
"Every sector including the government has been impacted all over the world. Our revenues have also nosedived. But this year monsoon is very good and the rural economy is on track. And since the rural base is slowly changing, demand for four-wheelers will also rise along with two-wheelers and tractors." said Javadekar while discussing auto slowdown in the country. He added, "The problem, however, arises in the urban sector."
Javadekar, while clarifying the government's stand on the GST reduction for the auto sector, said, "Government is open to ideas and making dialogue; there is always a way forward. I will certainly discuss the need for GST reduction in the auto sector with the FM and PM as the industry is asking for GST reduction for a certain period of time and not permanently."
When asked if the GST will be announced across the segments, Javadekar replied, "It should come in the sequence of two-wheelers, followed by three-wheelers and public transport and then four-wheelers."
Uday Kotak, MD & CEO, Kotak Mahindra Bank, speaking about vehicle financing, said that money is available and the banks are ready to lend. He added that the challenge is not financing vehicles but getting supply and demand.
"We need to get the whole chain working together. On my part, I can assure that the banks are ready, willing and eager to lend money. We just need consumers with a reasonable credit history to buy the vehicles" said Kotak.
Earlier this year, Union Minister of Road Transport and Highways Nitin Gadkari had said, "The scrapping policy will be finalised soon. It is going to boost the industry. It is going to reduce the production cost."
SIAM has also been asking the government to formulate a scrappage policy to phase out older vehicles. The scrappage policy is part of the stimulus package requested by original equipment manufacturers (OEMs) for the auto sector's revival in the country.
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