Millennial mindset of using Ola, Uber is adversely affecting auto sector: FM

Finance Minister Nirmala Sitharaman

What’s causing auto industry slowdown? Millennials, among other things: FM Sitharaman

When asked if the GST on automobiles will be cut ahead of the festive season, Sitharaman said, "There is a demand to consider reduction of GST rates, what will be considered I can't say, as it has to be decided by the GST Council, she said when asked if the GST on automobiles will be cut ahead of the festive season".

"We have earmarked ₹100-lakh crore for infrastructure and I think we should speed up spending on various infrastructure projects and the task force has already begun to identify projects viable for investment", Sitharaman said. Sitharaman also responded to a plethora of questions ranging from the slump in the economy to the slowdown in the automobile sector, among other political issues.

Speaking on the GDP that is hovering around five percent and the scenario that led to this, she said, "The concerns which industries have, we are speaking to them".

The Minister said the Task Force has commenced work and was in the process of identifying those projects which would receive the funding (Rs 100 lakh crore). The industry has been demanding a GST rate cut from the current peak rate of 28 per cent.

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The Reserve Bank of India (RBI) had also recently flagged disruptions in auto sector. But the GST Council is yet to decide on the rates.

At the media briefing in Chennai on Tuesday, Sitharaman also said the GST revenue collection needed attention.

One of the reasons for the slowdown, according to the Finance Minister, was "change in the mindset" of the people, who, she said, are now using cab aggregators like Ola and Uber as well as public modes of transportation. The industry saw a 12.25% decline in production in April-August 2019 compared to past year.

Last year, the Supreme Court ruled that from April 1, 2020, there will be no sale of (BS) IV vehicles.

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"The automobile and components industry has been affected by BS6 and the mindsets of millennial, who now prefer to have Ola and Uber rather than committing to buying an automobile", said Sitharaman while addressing reporters. "Our full focus now is on how it will rise". The government may have to increase infrastructure expenditure. The banks will benefit from each other's strength.A growing economy needs good banks. "The effective date of mergers will be decided by the respective board of directors".

On the removal of Article 370, to withdraw the special status of Jammu & Kashmir, the minister said it was a long-time dream of the BJP.

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