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.
Sitharaman said that they are working on a few things and is conscious that they should respond adding that the goods and services (GST) Council will decide on cutting goods and services tax on automobiles, which attract a 28% rate at present at a meeting 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 National Democratic Alliance (NDA) government’s first 100 days in office in its second consecutive term said that it has been a challenging start for the government with India’s economy expanding at the slowest pace in six years in the June quarter, amid sluggish demand, slowing private investment, a slump in the automobile sector and rising job losses.
The finance minister said that the automobile sector has been affected by several issues, including the move to Bharat Stage-VI emission norms from 2020. However, a change in mindset among consumers has also impacted demand for cars.
Sitharaman also met representatives of several industries in July in an effort to arrest the slowdown in the economy and to understand the challenges faced by them.