Govt takes steps to revive CV sales

The government today announced a slew of measures, including credit to NBFCs and providing accelerated depreciation of 50 per cent, to boost sales of commercial vehicles.

"An arrangement will be worked out with leading public sector banks to provide a line of credit to NBFCs specifically for the purchase of commercial vehicles," the government said while announcing the second stimulus package to minimise the impact of the global financial crisis.

A special purpose vehicle (SPV) would be designed shortly to provide liquidity against investment grade paper to non-banking finance companies (NBFCs) fulfilling certain conditions, an official statement said.

"The scale of liquidity potentially available through this window is Rs 25,000 crore," it added.

Besides, the government will also provide 50 per cent accelerated depreciation for commercial vehicles (CVs) purchased between January 1 and March 31.

Further, as part of the package, state governments will get a one-time assistance under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for purchasing buses for urban transportation.

"A scheme towards this end will be announced shortly," the statement said.

Welcoming the moves by the government, Society of Indian Automobile Manufacturers Director General Dilip Chenoy said these all are positive steps for the CV sector. "We look forward to implementation at the earliest," he added.

The country's CV segment is the hardest hit in the ongoing slowdown in the domestic automart. CV sales crashed by 49.52 per cent in November last year at 20,637 units as compared to 40,879 units in the year-ago period.