Petrol and diesel vehicles will not be banned, says the Road Transport and Highways Minister

Admitting that the automobile industry is witnessing a slowdown, Road Transport and Highways Minister Nitin Gadkari on Thursday said the government was mulling steps to help create demand in the sector, including exports incentives and Goods and Services Tax (GST) incentives.

Speaking at the Society of Indian Automobile Manufacturers (SIAM) annual convention, the Minister clarified that the government did not plan to ban the sales of ICE (internal combustion engine) vehicles.

“As far as present economic data is concerned, automobile sector is facing a slowdown.. because of the global economy, because of demand and supply...the government is with the automobile sector,” he said.

He clarified, “There was no deadline [to move to electric vehicles] and the government has no intention of putting a deadline. But you have to see that we import crude oil worth ₹7 lakh crore, then there is the issue of pollution. So we are promoting alternative fuels and electric vehicles. We are not banning petrol and diesel vehicles.”

On industry’s demand to reduce GST on vehicles, especially when the prices are expected to go up due to the introduction of BS VI norms, the Minister said he was pushing for reduction of GST on hybrid vehicles, as had already been done for electric vehicles.

“The industry’s demand for reduction in GST is understandable... I will take your suggestion [to reduce GST] to the Finance Minister...even if it can be done for a limited period of time. I will follow this up. This sector needs help at this time and that help should be in such a manner that it helps increase sales,” Mr Gadkari said.

He added that the government was also looking at more ways to help the sector, including the possibility of providing some incentives for exports to push sales.

“Already the Finance Ministry has taken some decisions...The government is doing their level best to get more finance, particularly for automobiles. Today, I suggested firms to make financing firms within their own company and they can finance. this can also help,” he added.

Additional, Mr Gadkari announced that his Ministry was trying to kick-start 68 road construction projects worth ₹ 5 lakh crore in the next three to four months. This too would help pushing sales immediately for some vehicles, including trucks, he said.