Nitin Gadkari

NEW DELHI: Petrol and diesel-powered vehicles will not be banned in the country, the government clarified on Thursday as the automobile industry is at a crossroads with the internal combustion engine (ICE) and rapid transition to electric vehicles .

Nitin Gadkari, Union minister for road transport and highways, said, "The government has no intentions of banning the production or stopping the existing petrol and diesel-fuelled vehicles. People had apprehensions about buying ICE vehicles and we are not going to take any such step."

Auto industry experts briefed Gadkari about the rise in prices of vehicles due to BSVI compliant engine. "The industry has sought a relaxation of GST on vehicles due to the extra cost incurred for the transition from BSIV to BSVI compliant engine. I would surely convey this to finance minister Nirmala Sitharaman and the government may consider the reduction of GST temporarily."

The minister, however, highlighted three major challenges -- import of crude, pollution and road accident -- the government is currently facing with the automobile sector.

"Firstly, we are aware of how importing crude is impacting the economy. The imports have crossed Rs 7 lakh crore. Pollution is our second big challenge, which is affecting the entire world. The automobile industry is just not the reason behind the pollution. Reducing pollution is of national and social interests. Thirdly, we wanted to address the issue of road accidents. Annually, over five lakh road accidents occur across the country. To ensure greater road safety, we introduced the Motor Vehicles Act 2019," Gadkari said at the 59th annual convention of Siam (Society of Indian Automobile Manufacturers).

"We are ready to take inputs and suggestions from the stakeholders and finance minister Nirmala Sitharama is constantly trying to solve the problems of a slowdown in the automobile industry. The government has taken steps to ensure greater liquidity in the system," Gadkari added.

Sitharaman announced a slew of measures on August 23 including making auto loans cheaper, lifting the ban on purchase of new vehicles for replacing old government vehicles, deferring of one-time registration fees till June 2020, additional 15% depreciation on all vehicles and operation of BSIV vehicles for their entire period of registration.

Reiterating that the government would help the industry, the road transport and highways minister also said his ministry would give out 68 road projects worth up to Rs 5 lakh crore in the next three months to help generate demand for commercial vehicles.

The minister said, like the way GST on electric vehicles has been reduced to 5 per cent from 12 per cent, he would propose to the finance ministry to extend the same benefit to hybrids vehicles.

"We have reduced GST in electric vehicles. Now I am trying that GST on hybrid vehicles is also reduced. I am following up regarding this with the finance minister," Gadkari said.



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