The automotive sector in India has been reeling under slump sales for a while now. In an effort to help the automotive sector as well as boost the economy, the Indian Government has announced multiple initiatives. One of the key measures announced by the government is to reduce interest rates for automobiles.
Additionally, the government has provided a clear assurance on allowing BS4 vehicles to be sold until the 1 April 2020 deadline. Depending on what part of the country that vehicle has been bought in, the registration process will take anywhere between 24 to 48 hours. Consideration for a hike in registration cost has been put on hold until June 2020. Moreover, the slew of measures also includes hiking depreciation benefit on all vehicles from 15 to 30 per cent and reversal of a five-year-old ban on government purchases, thereby now allowing its own departments to replace their old vehicles.
However, the Indian government has not announced any reduction in GST rates. Currently, 60 per cent of the auto components are at 18 per cent, while the rest are at 28 per cent. With that said, new initiatives announced by the government will help the industry to a marginal extent.