Slump in auto sector hits Karnataka's transport revenue

The push for electric vehicle to reduce emissions by fossil fuel-based vehicles is also expected to dent its revenue in the next few years. (AFP File Photo. For representation purpose)

For the first time in over a decade, the Transport department is struggling to meet its revenue targets due to a slump in the automobile sector.

During the first four months of the 2019-20 fiscal, the departments’ revenue is down by 11.5% and authorities fear it will dip further as the year progresses.

Moreover, the push for electric vehicle to reduce emissions by fossil fuel-based vehicles is also expected to dent its revenue in the next few years. Data available shows that the Department has been on the negative side with respect to meeting its monthly targets during the first four months of the current financial year. Officials fear that the growing trend will continue to eat into the revenues of the Department, which is the fourth highest revenue generator for the state government.

According to data available, the Department, had been recording a steady revenue increase of 2.8 to 3.8 per cent every year since 2009-10. In 2019-20, the revenue fell behind the target by Rs 256 crore. Against a monthly target of 558.49 cr set by the state government, the Department generated Rs 497.86 cr in April, Rs 521.05 cr in May, Rs 490.4 cr in June and Rs 467.7 cr in July.

Sources in Department said that the declining trend in revenue will continue for the next two quarters. “It might meet or slightly exceed monthly targets in the last quarter of 2019-20. But it is clear that earnings of the Transport Department is only going South,” the source said.

J Gnanendra Kumar, Joint Commissioner of Transport, Bengaluru North, told DH that apart from the crisis faced by automobile sector due to which vehicle production has comd down, push for electric vehicles is also going to affect the Department’s revenue. “Sale of e-vehicles will generate very little revenue for the Department due to the incentives offered. We are also witnessing an overall decrease in sale of vehicles,” he said.

According to reports, car sales have slumped for nine consecutive months in the country resulting in a major crisis in the automobile sector. The Society of Indian Automobile Manufacturers (SIAM), in its report noted that sales of two-wheelers have also nosedived.

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