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'Millennials opting for Ola, Uber to avoid auto EMIs affecting demand'

Millennials opting for Ola, Uber to avoid auto EMIs affecting demand

Chennai: Finance Minister Nirmala Sitharaman Tuesday said the slowdown in the automobile sector was due to many factors like the change in mindset of millennials,who now prefer taxi aggregators like OLA and UBER instead of committing for monthly installments to own a car.

Sitharaman said the automobile industry did have its "good times" till two years ago.

"It was definitely a good upward trajectory for the automobile sector", she told reporters.

The minister said the sector had been affected by several things, including movement towards BS-VI norms and registration related matters and (also) change in mindsets.

She said some studies had revealed that there was a change in the mindset of the millenials not to commit any EMIs (equated monthly installments) towards buying an automobile and instead taking OLA, UBER or the Metro (train) services.

"So, a whole lot of factors are influencing the automobile sector. We are all seized of the problem. we will try to solve it", she said.

The Bharat Stage VI (or BS-VI) emission norm will come into force from 1 April 2020 across the country. Currently, vehicles conform to BS-IV emission standards.

On August 23, in a bid to address the slowdown in the auto sector, Sitharaman had announced lifting the ban on purchase of vehicles by government departments and allowed an additional 15 per cent depreciation on vehicles acquired from now till March 2020.

Also, the government clarified that BS-IV vehicles purchased up to March 2020 would remain operational for the entire period of registration, while also considering various measures, including scrappage policy to boost demand.

Aditionally, she, while stressing the need to speed up spending, said that a task force set up by the government to boost investments in infrastructure projects is in the process of identifying sectors requiring funding from the Centre.

"Government spending has to be speeded up to boost consumption. The best spending (by government) will be on infrastructure.

We have (already) announced Rs 100 lakh crore and that is the amount, which I think has to be speeded up for infrastructure related projects", she said.

Sitharaman was briefing reporters on 'Furthering India's development - 100 days of Bold initiatives and decisive actions of the Government of India.'

"I have appointed a task force to speedily identify the projects so that money can be front loaded", she said.

The Minister said the Committee (or the task force) has commenced work and was in the process of identifying those projects which would receive the funding (Rs 100 lakh crore).

The task force, comprising secretaries from various ministries, other senior officials and the Niti Aayog CEO, would identify technically feasible and financially viable infrastructure projects that can be initiated in 2019-20, she said.

Sitharaman said that the government, as part of its move to make India a $5 trillion economy, has chalked out various measures, including infrastructure spending and merger of public sector banks, among others.

Asked whether the government was confident of achieving the targetted $5 trillion economy with the Gross Domestic Product at five per cent at present, she said the GDP going up and down was normal and recalled that it had happened even during the UPA regime in 2012-13 and 2014-15.

"But I am not taking it as granted. I want to improve and (am) taking steps. One solace now is that inflation is under control.

Food inflation (earlier) crossed 10 per cent But now it is 3.1 per cent. From 2014-till date, it did not touch four per cent. While worrying about the five per cent GDP, also look at the inflation rate", she said.

She said the current focus would be on how to increase the GDP in the coming quarters.

On increase in gold prices, she said government was importing gold to meet local demand and consumers were also looking at it as an investment option.

"Apart from the demand, other factors like crude oil price increase and the (fluctuating) $rate have also led to increase in gold prices", she said.

Asked how the government was infusing confidence among the business community, given the current slowdown, she said one measure was by interacting with them and addressing their issues sector wise.

"All of us are constantly interacting with (each) sector.

This is not just in Delhi, we are actively doing all around the country. We came out with two major announcements between August and September. I have promised that I will come out with one or two more announcements",

she said.

Agencies

Agencies

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