india

Updated: Sep 18, 2019 22:01 IST

Bihar’s Deputy Chief Minister Sushil Kumar Modi said some sectors of the Indian economy were going through a sluggish phase and it didn’t mean that the entire economy was in a slowdown mode. He said the slowdown appeared to be cyclic.

Modi, who is also the chairman of Goods and Services Tax’s (GST) IT committee, also hit out at “corporate lobbyists” for alleged attempts to create an atmosphere of “fear”. He was speaking at the summit ‘Hindustan Purvoday 2019’ in Jharkhand’s capital Ranchi on Wednesday.

Bihar’s Deputy Chief Minister cited newspaper reports to say that some FMCG companies had announced huge profits contrary to the perception being spread that people had cut down on purchase of biscuits, cooking oil, bathing soaps etc.

He said such impression was also the handiwork of “corporate lobbyists”. “There is a lobby... the lobby of corporate houses who put pressure through media and ask for tax cuts,” Modi said before adding, “There is an attempt to create an atmosphere of fear. The slowdown is not restricted to India alone; it has impacted the entire world including the U.S and the China,” he said.

Speaking on the slowdown in the automobile sector, he said the retail sales had come down only by four per cent and the impression that the growth in the sector had completely tanked was based on the wholesale data. “Not even one auto showroom in Bihar was shut down due to the slowdown,” Modi said.

“Siam (Society of Indian Automobile Manufacturers) is releasing data of vehicles that are released to the showrooms and not of the retail sales. Retail dealers association has demanded for publishing of retail data as well,” he said and added that two-wheeler and three-wheeler sales had actually gone up by 25 and 50 per cent respectively in Bihar alone.

Ruling out GST as the cause for the dip, he said, “GST was implemented two and a half years ago in 2017 and didn’t impact the sales after coming into force.”

Modi said none of the dozen states, whose finance ministers he met as the chairman of GST’s IT committee, were prepared to cut down taxes for automobiles, biscuit or any other fast moving consumer goods. The final decision on the matter had to be taken in the GST council meeting slated for September 20, he added.

“A common understanding has evolved that the auto sector will not be given any concessions. The government was running a deficit of Rs 45 thousand crore,” Modi said.

Trying to explain the dip in auto sales, the Deputy CM said some consumers could be waiting for introduction of BS-6 standard vehicles and reduction in GST before buying new vehicles. He listed safety features, stricter rules for auto loans, requirement for five-year insurance cover and competition from electric vehicles as other possible reasons for the decline in sales.

Modi stood by his earlier comments that people suspend new purchases, including automobiles during the monsoon months and the period of ‘Pitrapaksha’ (a period in Hindu calendar to pray for the ancestors).

“People mocked me for saying that new vehicles are not purchased during ‘Pitrapaksh’, but you look at all India figures and it will be evident that new purchases go down in the monsoon months,” Modi said and added that the motor companies were also partially responsible for the “temporary” slowdown witnessed by the sector. “Very soon there will be revival,” he asserted.