No plans to ban petrol, diesel vehicles: Nitin Gadkari

Minister of Road Transport & Highways Nitin Gadkari has said that the government is not planning to ban petrol and diesel vehicles.

Acknowledging a slowdown in the Indian automobile sector, Gadkari assured that the government will take up SIAM's request of reducing GST on petrol and diesel vehicles with the finance minister. The Transport Minister was speaking at the Society of Indian Automobile Manufacturers (SIAM) Conclave.

Earlier, the auto industry body SIAM had sought immediate steps from the government including a reduction in GST rates as sales continued to plummet. The sales of passenger vehicle declined by 30 per cent in August.

The industry has offered attractive deals and discounts to the consumers, however, the ability of the industry to provide large discounts is limited. Thus, there is a need for the government to consider reducing the GST rates from 28 per cent to 18 per cent, which would significantly reduce the cost of vehicles and, in turn, create demand, SIAM President Rajan Wadhera is quoted as saying in a statement.

With the impending price increase of vehicles and the upcoming of BS VI norms deadline, "it is your (industry's) demand that there should be reduction in tax of petrol and diesel vehicles. Your suggestions are good. I will take your message to the finance minister," Gadkari said at annual SIAM convention here.

Even if it (GST) is reduced for some time, it will help, he added.

"I will follow it up with the finance minister. The sector needs help right now to increase vehicle sales," Gadkari said.

The minister said, like the way GST on electric vehicles has been reduced to 5 per cent from 12 per cent, he would propose to the finance ministry to extend the same benefit to hybrids vehicles.

"We have reduced GST in electric vehicles. Now I am trying that GST on hybrid vehicles is also reduced. I am following up regarding this with the finance minister," Gadkari said.

Gadkari, who had in 2017 stated the auto industry would be "bulldozed" if they didn't push for electric vehicles, also struck a reconciliatory note saying that the government has no intention to ban petrol and diesel vehicles.

"There have been talks that government is planning to ban petrol and diesel vehicles. I want to make it clear that the government has no such plan. We are not going to do anything like that," he said.

He also said he would take up a discussion with the finance minister for extending possible export incentives on automobile makers, as has been done for the sugar industry.

On award of road contracts, Gadkari said, in the next three months, "we are trying to... award road contracts worth Rs 5 lakh crore. We have selected 68 projects including various expressways... we have already acquired 80 per cent of land for these projects... this would help indirectly the auto industry".

The minister also asked automobile companies to have in-house finance companies to help generate sales.

CII President – Designate, MD and CEO of Kotak Mahindra Bank, Uday Kotak also urged automobile manufacturers to give emphasis on exports in order to create an additional avenue to overcome the slowdown in the domestic market while stressing that a weaker rupee will make it even more favourable.

Speaking at the event earlier, SIAM President Rajan Wadhera had asked the government to consider reducing GST on automobiles to help it overcome the prolonged slowdown.

He also drew Gadkari's attention for the government to consider a single nodal regulatory ministry for the auto industry, which currently comes under several ministers regarding various functions.

With the implementation of BS-VI norms from April next year, Wadhera said Indian auto industry will be at par with the best in the world when it comes to pollution; and therefore restrictions on different vehicles based on fuels must be removed.

He also asked the government to support the industry whenever courts decide otherwise.

Wadhera said due to the current downturn, 15,000 contractual jobs have been lost in the automobile manufacturing and around 2.8 lakh in dealerships, while components manufacturers are staring at 1 million job losses if the downturn continues.

Maruti Suzuki India CEO and Managing Director Kenichi Ayukawa, meanwhile, welcomed Gadkari's assurances to help the auto industry and said the industry was eagerly looking forward to concrete steps.

(With inputs from PTI)