COVID-19 Impact: MP automobile industry pushes government for stimulus and MSME status

In the wake of the plummeting auto sales across the country over the past two months due to the COVID-19 pandemic, the automobile industry in Madhya Pradesh has appealed the government to provide stimulus to the sector and grant it the status of MSME (micro small medium enterprises).

The nationwide lockdown since March 25 induced losses of over INR 1,000 crore in GST and INR 30 crore in road tax. On an average, 7,000 two-wheelers and 2,000 four wheelers have been sold in Bhopal. The lockdown served a fatal blow to the industry which was already witnessing a slow business before the COVID-19 outbreak.

This is also believed to have affected the metal industry, including aluminium. Due to the lower demand and purchase of automobiles, many auto companies have cut production, leading to the weaker usage of aluminium products and die-casting. So, while the demand from user industries has weakened, production of aluminium is expected to outpace demand which will exert pressure on aluminium prices.

Talking to TOI, regional director of federation of automobile dealers association (FADA), Ashish Pande said: " Automobile industry was reeling under de-growth for the past 18 months, it now needs stimulus in the form of GST cut and significant reduction in road tax by state governments. The MSME status would help us get benefits, which have been recently announced for the small industries. This will go a long way in reviving the industry as it is one of the biggest tax contributors to the state and the Centre exchequers."

Pande also said, "Insurance for all vehicles should be mandated for one year only and reduction in VAT (value added tax) on fuel or bringing it under ambit of GST will also reduce cost of ownership (of vehicle) and reduce the cost of essential goods."

The lockdown has also delayed the introduction of BS6 vehicles.

source https://www.alcircle.com/news/covid-19-impact-mp-automobile-industry-pushes-government-for-stimulus-and-msme-status-55903