Govt. to car makers: must balance growth with sustainability

Cities are not made for cars, but for people, a top industry ministry official said on Thursday, reacting to the automobile industry’s concerns about a Supreme Court order temporarily banning the sale of diesel vehicles and SUVs with an engine of over 2,000 cc in the capital.

“There is a need for predictability, consistency and clarity in policy for investors. But there is also an imperative need for sustainability and we need to balance that with urbanisation and manufacturing. We must balance (economic) growth with sustainability,” said Amitabh Kant, Secretary in the Department of Industrial Policy and Promotion on Thursday.

He was reacting to concerns raised by auto makers in the light of the Supreme Court order. German car maker Mercedes, which is expected to be worst-hit, said on Wednesday that the ban creates an environment of uncertainty and will severely impact it expansion plans and future investments for the Indian market.

Manufacturing investments should be made with a long-term perspective and not be swayed by short-term changes in the environment, he stressed.

“Manufacturing investments are a long term process, you cannot be swayed by a five month ban in a city,” Mr Kant said. “Breathing in Delhi is like smoking 60 cigarettes a day, you will die in seven-eight years at this rate,” he emphasised.

Instead, the industry secretary said that car makers should create a momentum to achieve lower emissions and bring in the best technologies from the world in electric cars and green mobility solutions.

Mr. Kant said that foreign direct investment inflows into India had risen by 35 per cent in the last seventeen months, compared to the previous seventeen months. “I expect FDI flows would continue to grow at 30 per cent next year as well,” he said.

Over 150 foreign firms are in the process of investing in India, Mr. Kant said with certainty and more investments are in the pipeline. Prime Minister Narendra Modi would inaugurate a Make In India week to be held in Mumbai in February 2016 in partnership with States and industry, he added.

India is the most open economy in the world today as we have allowed FDI in every sector except the Multi-Brand Retail sector, the industry secretary said, but didn’t rule out opening up FDI in retail going forward. “These decisions are calibrated at the political level,” he said.

There is a need for predictability, consistency and clarity in policy for investors.

Amitabh Kant,Secretary, DIPP

Recommended for you