VIJAYAWADA: The authorities of the Transport Department are facing a difficult time in achieving the targets given to them with regard to revenue from life tax collections for registration of newly-purchased vehicles. A whopping 10 per cent drop is reported in the life tax collections during the last one year.
The significant decline in life tax collections is attributed to a fall in the new registrations of cars as well as motor cycles. This is apparently due to the increase in interest rates on vehicle loans. Deputy Transport Commissioner T. Raghunath says there has been a steady decline in registration of new vehicles ever since the banks started increasing the interest rates on vehicle loans. He points out that the interest rates have been increased up to 14 per cent by some banks in the recent past.
As there is no sign of interest rates coming down in the near future, it is expected that the purchase of vehicles will further come down for a few more months. The officials say they expect the new registrations of vehicles to improve only after interest rates stabilise for a noticeable period.
Two years ago, purchase of cars and two-wheelers reached a peak in view of a significant rise in people’s purchasing power and affordability.
More sections, particularly youth, went for individualised transport.
But with the sudden rise in interest rates, people started opting for other modes of transport.
As the interest rates reportedly increased by nearly four per cent to five per cent, it came as a real dampener to registration of new vehicles.