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Auto sector slowdown leads to 3.4 lakh job losses, says Parliamentary panel report

The slowdown in the auto sector has lead to a loss of 3.4 lakh jobs and the sector could two consecutive years of contraction, said a Parliamentary panel report. The sector needs a focussed stimulus package, it further said, while recommending a 10 percent goods and services tax (GST) reduction to offset price increase and stimulate demand. It further suggested reducing GST on used cars to 4 percent from the current 12-18 percent to create demand.

The slowdown in the auto sector has lead to a loss of 3.4 lakh jobs and the sector could two consecutive years of contraction, said a Parliamentary panel report. The sector needs a focussed stimulus package, it further said, while recommending a 10 percent goods and services tax (GST) reduction to offset price increase and stimulate demand. It further suggested reducing GST on used cars to 4 percent from the current 12-18 percent to create demand.
The committee has taken a note that the sector lost about Rs 2,300 crore per day during the lockdown period and also the fact that most companies have slashed production by 18-20 percent. There have been more than 3 lakh jobs lost in dealership, in component manufacturing and in vehicle manufacturing as well.
The panel has expressed concern about the slowdown in the sector and has recommended a 10 percent goods and services tax (GST) reduction on new vehicles. They have also noted that the auto sector could go through two consecutive years of contraction.
Parikshit Luthra has the details of the concerns and recommendations of the parliamentary panel.
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