Parliament Panel recommends revival of automobile industry

RSTV Bureau
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File Photo: Automobiles

Parliamentary Panel presented its report on Demands for Grants 2020-21 of Department of Heavy Industry and called for strengthening the Industrial Sector viz., Heavy Electrical & Engineering Industry, Capital Goods and Automobile Sector and Recommends for more funds for realising the Vision & Mission of the

It recommended for strengthening the sick and incipient Units/Plants by either restructuring/ modernization or hand-holding by the Government for bringing about a turnaround in their performance.

Recommending the revival of the Automobile Industry which is at Fourth position in total production of vehicles in all categories, the committee noted that some of the factors contributed to the slowdown are:

(i) Non-availability of credit facility to consumers
(ii) Stringent rules for loan sanction by Banks
(iii) Rise in price due to upfront payment of third party insurance for 5 years
(iv) Introduction of BS-VI vehicles from 1 st April 2020
(v) Higher rate of GST on Automobiles and components.

The Committee recommended:

(i) to either suspend or postpone the upfront payment of insurance for 5 years for the time being
(ii) reduction in GST rate to a lower slab at least till the revival of the Auto Sector
(iii) introduction of incentive-based scrappage policy for creating purchase demand for new vehicles.
(iv) reduction in import duty on lithium-ion cell battery which is used for operating the e-vehicles (v) levy of uniform road tax across all states.

The Expert Committee report submitted in 2017 is still pending with the Government. The Committee desires that DHI in consultation with the Government of India should implement the recommendation of Dr Saraswat Committee without any further delay.

The Committee also observes that many CPSEs viz., Tungabhadra Steel Products Limited, Hosepet, Karnataka;

(ii) HMT Watches Limited, HMT Chinar Watches Limited; and HMT Bearing Limited; HMT Tractor Unit Pinjore;

(iii)Hindustan Cable Limited

(iv) Kota Unit of Instrumentation Limited which have been approved for closure long back, are still pending the final closing procedure. The Committee recommends that the long-pending final closing procedure of related PSUs should be expedited so that DHI would be able to concentrate and dedicate their time and money on other CPSEs particularly the sick and incipient for their restructuring/modernization.

The Committee notes that the total allocation in BE 2020-21 is Rs.1489.98 crores as against Rs.3036.01 projected by the DHI. The Committee recommends that DHI should take up the matter with M/o Finance for enhanced allocation at RE stage so that the schemes/projects/initiatives could be implemented to its fullest capacity to achieve targeted goal and objective.