Responding to a question by Anurag Thakur on the reasons behind the slowdown in the auto sector, a participant at the ACMA event retorted to say that it was the “effect of demonetisation”.
The question – Why has sales in the auto industry not picked up despite measures by taken the government, RBI intervention and big discounts by manufacturers?
The answer – Demonetisation effect.
This is what transpired between minister of state for finance Anurag Thakur and a participant at an ACMA event on Friday (September 6) when he asked the all-important question.
Thakur, who was at the Automotive Component Manufacturers Association of India (ACMA) annual summit was fishing for inputs from industry players on the reasons behind the slowdown in the sector, despite government's attempts to support it.
During his address, Thakur was interrupted by Jasbir Singh of GS Auto Ludhiana, who said, "This is the delayed effect of demonetisation. People don't have money!"
A composed Thakur, repeatedly said "Thank you" and sought to calm the atmosphere by asking "If that is the delayed effect (of demonetisation), how do you move ahead from here? How do you go forward?"
"If there is reduction in interest rates after the Reserve Bank of India's recent actions, discounts by companies (have been offered) and many other initiatives have been taken by the central government, why is the industry not seeing the same kind of demand?
Thakur then asked the pertinent question, "Is the demand coming down globally or is it only coming down locally?"
"The other issue is people are using cabs more or maybe they are looking at other options like electric vehicles (EVs), BSVI vehicles... What are the main reasons? There could be many reasons for that. Is it just cyclical?" he asked the gathering.
Singh however found a fitting reply in minister of state for heavy industries and public enterprises Arjun Ram Meghwal’s speech who argued that economic reforms such as demonetisation and goods and services tax were necessary to make India a $5-trillion economy.
"This is economic reform sir. This made India a $3-trillion economy. How much cash can you keep sardarji?" Meghwal asked.
He further said, "This country has to develop, and you are trying to run a parallel economy."
The minister emphasised that a “parallel economy cannot run under the Modi government, although some ratio will remain as is prevalent in other developed countries."
Singh was congratulated, however, for speaking for the industry.
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