Auto makers cry ba­bies, no need for GST cut: Srini

The Times of India (New Delhi edition) - - Times Global - Ra­[email protected] times­

Chen­nai: N Srinivasan, MD of the In­dia Ce­ments on Thurs­day joined Ra­jiv Ba­jaj, MD of Ba­jaj Auto, say­ing there was no ne­ces­sity for any GST cuts on au­to­mo­biles as the cur­rent crisis was a re­sult of bad plan­ning by au­tomak­ers.

The GST coun­cil is meet­ing on Septem­ber 20 and most play­ers in the au­to­mo­bile in­dus­try have been lob­by­ing for an im­me­di­ate re­duc­tion in GST levied on ve­hi­cles to 18% from the cur­rent 28% to boost de­mand.

“A duty cut will not spur de­mand. The is­sue is more struc­tural. Look at us (ce­ment trade). We have been ek­ing out a liv­ing in South In­dia by run­ning our plants once ev­ery two days for nearly four years now. Ce­ment is taxed 28%. We have learnt to live with this and work around th­ese levies. We never asked for cuts. On the con­trary, auto makers are ask­ing for cuts with just a few months of slump,” Srinivasan said. Auto makers should have in­tro­duced cheaper prod­ucts and kept the mar­ket buzzing with in­ter­est rather than be cry ba­bies and run and seek cuts, he said. “The slump was seen com­ing, yet the au­tomak­ers con­tin­ued to pile up in­ven­tory.”

The gov­ern­ment should also fac­tor in the bal­ance sheets and cash bal­ances of au­tomak­ers. “Take Maruti, their quar­terly net profit even now is more than Rs1,400 crore and they are sit­ting on piles of cash,” Srinivasan said. “Why should it hap­pen?”

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