Union Transport Minister Nitin Gadkari today said that the government is not planning to ban petrol and diesel vehicles. His comments come as the auto industry battles its worst slowdown in several years that has led to several carmakers announcing plant shutdowns to cut production.
The transport minister also said that the government is also trying to bring a vehicle scrappage policy soon.
The government is also considering a cut in the goods and services tax (GST) rate on hybrid vehicles, said Gadkari said on Thursday.
The government’s plan comes as the auto sector battles with a steep drop in sales due to feeble consumer demand, with several top automakers and component manufacturers cutting production.
To help revive the sector, Finance Minister Nirmala Sitharaman had earlier announced several steps.
These include allowing government departments to buy new vehicles, automobiles purchased till March 31, 2020 to avail the benefit of additional depreciation of 15%, with total depreciation up to 30%, and BS-IV vehicles bought till March 31, 2020 would remain operational for their entire registration period.
Apart from a slowdown in the economy, auto sales have also been hurt due to the lingering crisis in the NBFC sector. The transport minister also that automakers should consider starting non-banking finance companies for lending to buyers to boost sales.