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Auto sector’s problems derived from SC’s order to upgrade to BS-VI emission norms: Sitharaman

Finance Minister Nirmala Sitharaman has said the problems in the automobile sector are essentially derived because of the Supreme Court’s (SC) order to upgrade to Bharat Stage (BS) VI emission standards, thus resulting in churn in the sector. She said the auto sector is among the industries that are facing headwinds but have responded to the challenges.

The minister further said the government also took a considered decision that from BS-IV emission standards, the country should go directly to BS-VI norms, which would come into effect from April 1, 2020. She noted if that decision is taken two years in advance, naturally, there is a churn in the automobile industry because they will have to change their business model, they have to move into production of BS-VI models for which R&D (research and development) funds are required.

Asserting that the government is aware of the challenges facing many sectors, Sitharaman said, ‘we have already seen many of these segments responding, as the automobile sector.’ She also said in the auto sector, most of the companies have cleared their inventory. She added that the Indian auto sector has been going through a prolonged slump.

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