Ever since the new BJP Government led by Mr. Narendra Modi as Prime Minister assumed power at the Centre on the strength of a thumping majority, there has been a significant change both in the business sentiment and the overall corporate sector attitude to the Government which is keen on infusing investments for revival. Though there are strong and clear indications of a quick economic turnaround, the key point that India is reckoned the world’s third largest economy in terms of purchasing power parity (PPP) makes the targeted growth much easier to achieve. As per the World Bank’s International Comparison Program (ICP) data, India holds a 6.4 per cent share in the global GDP on a PPP basis. The US remains at the top with a 17.1 per cent share, China trails with 14.9 per cent, and Japan with a 4.8 per cent is in the fourth position.
Further, the pick-up in automobile sales for the second consecutive month is expected to gain momentum in the coming months. Similarly, commercial vehicle manufacturers are also highly optimistic about the reversal of the downtrend in vehicle sales with the evidently rising consumer demand. If the Government’s ambitious plan of 30 km of road construction per day is fulfilled, the prospects of the CV segment would positively improve further. Shares of auto and auto ancillary firms have also been steadily moving up since last one month. Mr. Modi brought some big relief to the auto sector by extending the excise duty cuts announced by the UPA Government in February last till December 31, 2014. Yet another notable measure taken by it is allowing 100 per cent FDI in the Defence sector which would hopefully fare much better with a greater flow of investible funds. Interestingly, most of the commercial vehicle manufacturers have, of late, started focusing more on Defence vehicles, even for the export market.
In the emerging scenario, the Government is pretty hopeful of a consensus among different sections on the question of rolling out the long-pending Goods and Services Tax (GST) which, if successful, will ultimately benefit the road transport sector to a large extent.