The Finance Minister has taken a number of steps that are expected to boost the ailing auto sector. These include measures to boost liquidity and increase demand.
In order to boost demand, the government of India will be lifting the ban on purchase of new vehicles in their departments. All old vehicles used by various departments will be replaced with new ones. A scrappage policy for old vehicles is also being considered.
All vehicles purchased till March 31, 2020 will be eligible for an additional 15% depreciation for a total of 30%. Also, the proposed hike in one-time registration fees has been deferred till June 2020.
Clarifying the government’s stand on BS-IV vehicles, the Finance Minister has said that BS-IV vehicles purchased till March 31, 2020 will remain operational for the entire period of registration. Both electric vehicles (EVs) and internal combustion engine vehicles (ICVs) will continue to be registered. However, the government will continue to focus on setting up infrastructure for the development of auto ancillaries, including batteries for export.
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