In the year gone by, the most important development for the Indian economy was the formation of a stable Government. We have seen some positive policy decisions and look forward to sustained pro-business interventions to boost the economy, and in turn benefit the automobile industry.
These include the diesel price de-regulation, which enabled a substantial reduction in Government subsidy, thereby reducing the overall burden on the budget with positive returns to the exchequer. This will also empower the Government to reduce the fiscal deficit substantially, which will bring down inflation, and provide a much needed breather to the common man. The Government’s decision to resolve VAT disputes has encouraged top Indian auto makers to consider further investments to boost manufacturing.
The automobile industry features in the ‘Make in India’ programme, and has been identified as one of the 25 thrust sectors outlined for growth. We hope that the Government includes some customer-friendly policy decisions which will build customer confidence and in turn boost sales. The industry is hopeful that the excise duty reduction will be reintroduced, as from a long-term perspective a unified excise duty structure will go a long way to benefit the industry.
We are also looking forward to the implementation of the GST bill, which the Government has tabled in the Lok Sabha, which will play a significant role by creating a uniform tax structure across all states.
We also want the Government to introduce a scrappage incentive scheme, which will keep older cars off the roads. This will benefit the environment, reduce fuel consumption and also propel further demand for greener and efficient vehicles. Together with this, we hope for measures and policies to maintain a healthy balance between interest rates, inflation and arrest the fall of the rupee, which will benefit the economy and the automobile industry alike.
Sumit Sawhney is Country CEO & Managing Director, Renault India Operations