Industry presses for retaining excise benefits for auto sector

Pawan Goenka demanded continuation of lower excise duties for the automobile industry

India Inc today pressed for continuation of excise duty benefits to the auto industry, asking the government to take concrete action to arrest slowdown in manufacturing sector.

The demands were stated during an interaction with Commerce and Industry Minister Nirmala Sitharaman here.

"It was a very interactive and useful session. Lots of ideas have come. Several issues related with Budget also came up for discussion. I will discuss that with the Finance Minister," Sitharaman told reporters after the 90-minute meeting with the representatives of industry chamber CII.

She said she would hold discussions on specific sectors in the coming months and address issues concerning the industry with a view to boost manufacturing.

Mahindra and Mahindra Executive Director Pawan Goenka said that he raised the issues concerning the auto sector and demanded continuation of lower excise duties for the automobile industry.

"Without the growth in auto sector, it will be difficult for the country to grow in double digits...We made a very strong request about the continuation of excise duty relaxation for the sector in the Budget," Goenka said.

Auto sector contributes about 7% in the country's economic growth.

In the Interim Budget earlier this year, the then Finance Minister P Chidambaram had reduced excise duties on small cars, scooters, motorcycles and commercial vehicles to 8% from 12%. Similar duty cuts were provided for SUVs and large cars. The duty cuts were to remain in force till June 20.

The BJP-led NDA government will have to take a call on continuation of the lower duty rates on auto sector in the final Budget to be presented by Finance Minister Arun Jaitley next month.

CII President Ajay Sriram in his presentation raised concerns with regard to declining growth in manufacturing and made a case for fiscal consolidation.

"We talked about how we can encourage SEZs, deal with increasing cost of doing business and bring down high transaction cost," he added.

Due to poor performance of manufacturing sector the Index of Industrial Production (IIP) declined by 0.1% in 2013-14. It had registered a meagre expansion of 1.1% in 2012-13.