In a move to improve demand for commercial vehicles in the country, Nitin Gadkari the Union Minister for road transport and highways announced that the Centre would reportedly be commissioning close to Rs 5 lakh crore for the construction of over 68 road projects in the country.
In a speech at the Society of Indian Automobile Manufacturers (SIAM) conclave, Gadkari affirmed that diesel and petrol-fueled vehicles will not be banned despite the substantial levels of pollution and rising crude oil imports in the country.
The automobile industry has been pressuring the Centre for a Goods and Services Tax (GST) rate cut to improve demand over the last few months. However, the government continues to be non-committed for a GST cut and has focussed on more road projects in the country.
The Centre expects the new road projects to boost the subdued demand for heavy commercial vehicles. According to sources, demand for commercial vehicles in the country dropped by over 40% in the last year.
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The industry also witnessed a downtrend in sales due to various norms introduced during the last year. For example, the loading limit for commercial vehicles was raised by over 15%, giving operators to load more goods on to the vehicles. This, in turn, affected sales and brought down new purchases of CVs.
Gadkari also acknowledged the industry’s GST woes and said that a proposal to reduce GST on vehicles would be laid before the Ministry of Finance. At present, the automobile sector is burdened with the highest GST rate of 28%, followed by a cess ranging from 1% to 15%.
The Union Minister added that the industry should be on a lookout for innovative ideas to adapt to a clear fuel considering the ever-rising pollution concerns and significant oil imports into the country.
Abbreviation is the name of the game – SIP, NPS, ELSS, KTM, and OMR.
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