One of the key reasons for the slowdown in the automobile sector is the confusion over the policy on electric cars, the government told a parliamentary panel on Monday.
A.R. Sihag, Secretary of the Department of Heavy Industries, made a presentation to the Standing Committee on Industry.
In August, the government think tank NITI Aayog got into a public spat with the automobile sector over the proposal to ban sale of three-wheelers with internal combustion engines by 2023 and two-wheelers with engine capacities less than 150 cc by 2025.
The 150-cc and below segment forms almost 90% of the two-wheeler market in the country.
The industry termed the proposed plan “unrealistic”, while knocking on the Centre’s door pitching for a EV roll-out road map over a “practical” time frame.
While various Union Ministers, including Highways and Road Transport Minister Nitin Gadkari, later clarified at many forums that the government did not intend to ban sales of vehicles powered by fossil fuels, the confusion added to the already low consumer sentiment.
“We told the government officials that it is skewed logic that the fear of electric cars could sway the consumer sentiment to such an extent to bring a slowdown in the industry. They did not come up with concrete measures to counter such a slowdown,” a member said.
Mr. Sihag, according to sources at the meeting, also said that the sales were down because of “curtailment” of automobile loans that so far were easily available.
The sharp increase in road tax in many States added to the problem. The switch from BS IV to VI engines for improved emission standards has also led to the slump, the Secretary added.
