Millennial mindset is a factor influencing auto sector: Nirmala Sitharaman


"These include BS6 (Bharat Stage 6) movement, the registration fee issue that has been deferred till June and the mindset of millennials, who are now preferring not to commit EMIs to buy automobiles but prefer to use Ola or Uber or take the metro".

Amid the worst slowdown in the Indian automobile sector, Finance Minister Nirmala Sitharaman stated that the decline in auto sales is not due to just higher tax rates, but because of change in people's mindset.

On the auto sector slowdown, Sitharaman said that the government is in touch with the industry players and constantly working to resolve their issues.

Minister of Finance and Corporate Affairs Nirmala Sitharaman on Tuesday addressed a press conference in Chennai to highlight the achievements of the Modi 2.0 government and talked about the abrogation of Article 370, 35A and rolling out of GST and Income tax reforms.

Sitharaman was addressing reporters in Chennai to mark the National Democratic Alliance (NDA) government's first 100 days in office in its second consecutive term. She said the government is conscious on the need to respond to check the auto slowdown.

Sitharaman said that the government, as part of its move to make India a Dollars 5 trillion economy, has chalked out various measures, including infrastructure spending and merger of public sector banks, among others.

According to SIAM, an organization of vehicle manufacturing companies, sales of the auto sector fell by 41.09 per cent in August. India saw the lowest GDP growth of 5% in six years in Q1. But the GST Council is yet to decide on the rates. The industry has been demanding a GST rate cut from the current peak rate of 28 per cent.

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Hero MotoCorp, India's largest two-wheeler manufacturer, recorded a 20% drop in sales last month, with Maruti Suzuki suffering a 34% drop during the same period.

She pledged more measures to stimulate the economy. Running of BS-IV vehicles purchased up to March 31, 2020, has also been allowed.

On GDP growth, she said, "It's not that the government is not responding with measures to boost GDP".

"It is useful for us to remember that dips and raises in GDP growth happens. Our full focus now is on how it will rise".

According to her, the task force is in the process of identifying the infrastructure projects to be funded, as well as expedited, and the Central government will start funding infrastructure projects once it submits its report.

She said the sector has been impacted by a number of factors.

"The effective date of bank mergers will be decided by the boards of respective banks", the Finance Minister said.