The Bharatiya Janata Party (BJP) has won
283 seats in the Lok Sabha. The Congress party, till recently the ruling party
at the Centre came a very distant second with a mere 43 seats. With Narendra Modi soon to take over the reins of the country as its Prime Minster, a lot is
expected from him. The Indian automobile industry would be one of the several
key industries that should benefit from good policy decisions that are expected
to follow soon.
The Indian economy had been in a limbo
for the last several years with hardly any policy initiative being taken by the
then ruling party, Congress and the UPA.
Unfortunately, the outgoing Prime Minister, Dr. Manmohan Singh, an
upright person and a brilliant economist, failed miserably.
A lot of bad done by the UPA government
needs to be rectified by Modi and his team. The Indian auto industry is facing
one of its worst times in recent history. Infrastructure development is at its
worst. This has had a calamitous effect on the Indian automobile industry.
The latest tally of votes is as follows:
BJP-283, Congress – 43, AIDMK—36, TMC—34, Shiv Sena—19, BJD—20, TDP—16, TRS---12
and AAP--- 4. Mahindra & Mahindra
Chairman Anan Mahindra tweeted after the results were announced: “Congratulations
Shri Modi,for your remarkable rise. India's impatience to rise has put you on
top. May you fulfill these great expectations”.
Another industrialist, a liquor
baron and Formula One team owner Vijay Mallya tweeted: "Finally looking
forward to a strong and stable Narendra Modi led BJP Government with an
absolute majority and no coalition pressures."
The Automotive Component Manufacturers
Association (ACMA) in a press note stated that needless to say the auto
industry In India has been experiencing one of the most challenging times ever;
the industry hopes that the new government would adopt measures to bring the
industry back on the growth path.
Commenting on the occasion Harish Lakshman,
President, ACMA said, “The new government is being formed at a juncture when
the entire country has been seeking a change. We expect that the new
government, when assumes office, will be able to formulate a recovery plan to
raise GDP and roll out developmental plans much needed in the country”.
Echoing the sentiments of the auto components
industry, ACMA wished that the new government takes into consideration the
following recommendations to foster growth in the automotive sector:
Bring back footfalls to the auto
dealerships: The recent excise rate cut in the interim budget needs to continue
for some time, as also interest rates need to be brought down to make vehicle
financing attractive for the consumers
GST as it has been long pending: this single reform
has the potential to revolutionise the entire manufacturing sector by
eliminating the cascading effect of taxation and can overnight make ‘made in
India’ products cost competitive
deficit needs to be addressed immediately: One of
the key areas that needs urgent attention is Power deficit in the country.
Further, the Government needs to accelerate the building of highways that will
not only benefit the automotive Industry and improve connectivity, but also
promote the social agenda of inclusive growth
long-term stable export promotion schemes with a
ten-year term or more: It is unfortunate that we are a net importing industry
although our potential to service the global exports markets is immense. It is
hard for us to place big bets in the global market without knowing whether the
existing export promotion measures will stay or be changed. The last Export-Import policy has been
beneficial to the auto component industry with several incentives introduces
over the five-year period of its validity, these measures need to continue
on labour reforms as it has been a sensitive
subject: This unfortunately, no political party has addressed earlier. The
labour laws in India are archaic and are not conducive to the growth &
development of the industry; as a result the auto industry is constrained to
employ significant number of contractual labourers which is neither in the
interest of the industry or even the labour. It is not that the industry and
the labour unions are loggers-heads on all the issues, there are several areas
where there is a concurrence and as a first step we must bring about reforms in
Vipin Sondhi, MD & CEO, JCB India
Ltd. noted, “It is extremely encouraging
that we will have a stable government. with a clear majority for the next five
years.The infrastructure industry hopes that mechanisms will be put into place
to ensure that the top 20 projects of
national importance are implemented expeditiously. The need to remove the
severe infrastructure deficit across the country is evident and imperative. We
do hope effective and decisive leadership in the near future will have great
impact on the creation of new jobs for the youth and ensure equitable
distribution of wealth.”
“With a new stable government in place,
we expect early implementation of second generation economic reforms like GST
& DTC and speeding up of stalled infrastructural projects to revive the
economy. A clear leadership at the centre will give a much needed direction to
the economy. Implementation of new labour reforms will lead to creation of
jobs, especially in the manufacturing sector,” said P Balendran, Vice President,
General Motors India.
“Customer sentiment is expected to improve in
the medium to long term with a new government at the center. We expect the
excise duty cuts to be retained in June’s budget and interest rates to fall or
remain at current levels for any chances of recovery for the automobile sector
during second half of the year,” Balendran added.
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