Perturbed over sluggish growth in Automoble sector, Ludhiana-based Chamber of Industrial & Commercial Undertaking has urged the Union Finance Minister, P Chidambaram to slash excise duty on Automobile & Components from 12.36% to 8% and initiate appropriate measures to provide respite to this sector in this challeneging time.
In a press statement, the Chamber has mentioned that this support is indeed required to beat the challenges and maintain growth trajectory which will enable automobile sector to survive in local and global markets. These measures in the upcoming Budget could impart a turnaround in the automobile sector.
Further the chamber stated that the market continues to remain subdued due to Micro economic factors. Given the sluggish market, there are instances where companies have cancelled investment in capacity expansion projects. Avtar Singh, General Secretary of CICU merntioned that finance cost is high, fuel prices remain steep, energy expenses have increased across states. All these factors, have adversely affected demand and growth of automobiles in domestic and global markets. This is also adversely impacting ancillary industry. The auto sector which is struggling for survival is adopting more cautious approach in earmarking resources.
Upkar Singh Ahuja, Joint Secretary of the Chamber has stated since the Automobile Sector has been contributing significantly towards the gross domestic product and generation of employment avenues, so the need of the hour is to strengthen this sector, so that it can face challenges boldly.
He added that not only in Domestic market but In Exports too, there are worrisome signs with overseas sales of Auto Components Manufacturers expected to decline by a whopping 25% to around $5.5 billion in the current fiscal.