Amid slowdown concerns for the automobile sector, Minister for Heavy Industries Praful Patel once again pitched for a stimulus package for the sector on Wednesday, saying he will initiate a discussion between industry representatives and Prime Minister Manmohan Singh and Finance Minister P Chidambaram for the same.
Noting that the domestic sales in have been declining for the past nine months, the minister said, "There is genuinely a case for stimulus for the auto sector."
"I am in constant touch with the government... Also in the days, I am going to arrange a meeting of the entire auto sector - Society of Indian Automobile Manufacturers (SIAM) and other stakeholders - with the Prime Minister and the Finance Minister so that the industry is able to express its concerns and I am sure we will find a way forward," he added.
Industry body SIAM has sought a stimulus package for the automobile sector from the government, similar to one given during the 2008-09 downturn, in which excise duty on two-wheelers, small cars and commercial vehicles was reduced to 8 per cent.
While speaking to reporters at the sidelines of a SIAM event here, the minister also expressed concerns over the current sluggishness in the industry leading to loss of jobs.
“Besides slowdown in the economy, high interest rates have always been a cause of concern for our country, especially for the middle-class when they are buying white goods and cars as the EMIs are linked ultimately to the rates,” Patel said.
He stressed, “Therefore higher interest rates, in a slowing economy, make a case for a relook at it.”
The Heavy Industry Ministry has already taken up the issue with Finance Ministry.
Commenting on the India-EU FTA, which the industry has been opposing, the minister said, “There is a lot of speculation about the FTA. I can assure you that in a world there is always a two-way traffic. If you want to export small vehicles, then you will have to give some concessions when it comes to imports of certain vehicles."