As the headline states, the hamstrung automobile industry believes Modi is a virtual magician who can wave his magic wand and claw it out of the morass. In other words, the beleaguered Indian automobile industry is pinning its hopes on the new government, led by Mr. Narendra Modi, to push reforms such as implementation of the Goods and Services Tax (GST) and policies that will boost infrastructure development on the back of a clear poll mandate. The industry is also hoping that the new government would keep the excise duty rates intact to help it revive.
It is to be noted that the Bharatiya Janata Party (BJP) has won 280+ seats in the Lok Sabha. The Congress, till recently the ruling party at the Centre, came a very distant second with less than 50 seats.
The Confederation of Indian Industry (CII) has said that the outcome of the general elections reaffirms India’s vibrant and dynamic democracy and would greatly help to revive growth and investor sentiments. “That (FDI in multi-brand retail) is something that we feel is desirable for India. We will take it up with the government and articulate and share our views,” the CII President, Mr. Ajay Shriram, said.
The Hinduja Group Chairman Srichand Hinduja has described Mr. Modi’s massive mandate as a vote for stability that will put India back on the path of high growth. “Modi has a proven track-record of governance in Gujarat, and people have reposed enormous faith in his leadership. I have little doubt that he will fulfil the aspirations of millions of people.”
“I think at the moment the industry is in such shape that removing that concession (excise duty cut) would be very negative, so I hope that will continue,” Maruti Suzuki India Chairman R.C. Bhargava said. Mr. Modi now has the mandate to implement whatever he has been promising. “Creation of jobs, moving manufacturing to a much faster rate of growth, getting good governance in the country, whatever is required to do these would be areas that form priority of the government,” Mr. Bhargava said.
Mahindra & Mahindra CMD Anand Mahindra tweeted: “Congratulations Shri Modi, for your remarkable rise. India’s impatience to rise has put you on top. May you fulfill these great expectations.”
General Motors India Vice President P. Balendran said the customer sentiment is expected to improve in the medium to long-term with a new government at the Centre. “With a new stable government in place, we expect the excise duty cuts to be retained in the June budget and interest rates to fall or remain at the current levels for any chances of recovery for the automobile sector during the second half of the year.”
He further said that, with a new stable government in place, the expectation is for an early implementation of second generation economic reforms such as GST and direct taxes code (DTC) and speeding up of stalled infrastructural projects to revive the economy. A clear leadership at the Centre will give the much-needed direction to the economy. Implementation of new labour reforms will lead to creation of jobs, especially in the manufacturing sector.”
Mr. Vipin Sondhi, Managing Director & CEO, JCB India Ltd., noted: “It is extremely encouraging that we have a stable government with a clear majority, for the next five years. The infrastructure industry hopes that mechanisms will be put into place to ensure that the top 20 projects of national importance are implemented expeditiously. The need to remove the severe infrastructure deficit across the country is evident and imperative. We do hope effective and decisive leadership in the near future will have great impact on the creation of new jobs for the youth and ensure equitable distribution of wealth.”
The Automotive Component Manufacturers Association (ACMA), in a press release, stated that the new government should work to bring back footfalls to the auto dealerships. Commenting on the occasion, Mr. Harish Lakshman, ACMA President, said: “The new government is being formed at a juncture when the entire country has been seeking a change. We expect that the new government will be able to formulate a recovery plan to raise GDP and roll out developmental plans much needed in the country. The recent excise rate cut in the interim Budget needs to continue for some time, as also interest rates need to be brought down to make vehicle financing attractive for the consumers.”