Union Finance Minister Nirmala Sitharaman said that the government will soon respond to the demands of the automobile sector which is facing the worst slump in more than two decades.
Sitharamansaid that they are working on a few things and is conscious that they shouldrespond adding that the goods and services (GST) Council will decide on cuttinggoods and services tax on automobiles, which attract a 28% rate at present at ameeting to be held in Goa on September 20.
Carmakers have sought an immediate cut in GST on vehicles to vehicles to revive sales during the crucial festive season after auto sales declined for the 10th straight month. They are hoping that a cut in tax would help attract buyers.
Sitharaman,while addressing reporters in Chennai during the celebration of NationalDemocratic Alliance (NDA) government's first 100 days in office in its secondconsecutive term said that it has been a challenging start for the governmentwith India's economy expanding at the slowest pace in six years in the Junequarter, amid sluggish demand, slowing private investment, a slump in theautomobile sector and rising job losses.
Thefinance minister said that the automobile sector has been affected by severalissues, including the move to Bharat Stage-VI emission norms from 2020. However,a change in mindset among consumers has also impacted demand for cars.
Sitharamanalso met representatives of several industries in July in an effort to arrestthe slowdown in the economy and to understand the challenges faced by them.