Amid economic slowdown, Anurag Thakur faces embarrassment at auto event
On Friday, Minister of State for Finance Anurag Thakur addressed the slowdown in the auto industry at the Automotive Component Manufacturers Association of India (ACMA) annual summit in New Delhi. However, as Thakur asked auto industry players why sales hadn't picked up despite the government's measures, he was heckled by a man who called it the "effect of demonetization." Here's what went down.
Speaking at the event, Thakur said, "If there is a reduction in interest rate after RBI's announcement, you [the industry] are also giving discounts, many other initiatives taken by the central government. Why we are not still seeing the same kind of demand?" Thakur then asked, "What are the main reasons... there could be many. Or is it just cyclical?"
Thakur was then interjected by Jasbir Singh of GS Auto Ludhiana. Singh promptly said, "This is the delayed effect of demonetization. People don't have money!" Unfazed by the heckle, Thakur responded in a calm fashion and said, "Thank you." He added, "If that is the delayed effect (of demonetization), how do you move ahead from here? How do you go forward?"
Later, when Minister of State for Heavy Industries and Public Enterprises Arjun Ram Meghwal delivered his speech, he, too, addressed Singh's pointed remarks. Meghwal said that demonetization and the Goods and Services Tax (GST) were economic reforms required to make India a $5 trillion economy. Meghwal said, "This made India a USD 3-trillion economy. How much cash can you keep, sardarji?"
Meghwal said, "This country has to develop, and you're trying to run a parallel economy. A parallel economy cannot run under the Modi government." However, according to Deccan Herald, many participants at the event later congratulated Singh for speaking up for the auto industry.
Currently, the auto industry is dealing with a slowdown attributed to high GST rates, farm distress, stagnant wages and liquidity constraints. Reportedly, the auto components industry, which employs 50 lakh people and contributes 2.3% GDP, has sought a uniform 18% GST to help companies with their working capital borrowings. This could further be used to invest in long-term assets.