Automakers have to cut production costs, says TN minister

Chennai: The Confederation of Indian Industry’s (CII) Auto Focus 2002, an automotive industry exhibition, was kickstarted on 10 October 2002 here. Inaugurating the show Tamil Nadu Finance Minister C Ponnaiyan requested vehicle manufacturers to bring down their production costs further so as to make the vehicles affordable to large sections of the society.

“The last few years saw Tamil Nadu transforming into a production and export base for private cars from being a centre for commercial vehicles. The automotive industry today contributes 17 per cent of the state’s total indirect taxes,” he said.

He also asked the industry to lobby with the central government to provide loans at 8-per cent interest rate through Small Industries Development Bank of India to the small-scale sector so that the ultimate cost of production goes down. He also expressed the government’s inability to reduce the tax rates citing the revenue crunch, caused mainly due to the reduction of Rs 1,100 crore from the central pool.

“The government has a total debt of Rs 36,000 crore and the interest component comes to Rs 11 crore per day,” he said. Agreeing that the road infrastructure is bad in the state, he said the government is planning to transfer the roads under the municipal corporation jurisdiction to the state highways department for better maintenance.

Delivering the keynote address, Ashok Leyland chairman R J Shahaney called for banning two-wheelers on the roads for some predetermined hours every day. “Out of the 6 million vehicles rolled out, nearly 3 million are two- or three-wheelers. Two-wheeler manufacturers are making high-powered bikes, making it easier for the riders to zip in and out of the traffic thereby risking other road users in urban centres.”

Citing the high tax rates on bus body-builders, Shahaney requested the state government to reduce the same. According to him, while the new trucks confirm to the emission norms, the older trucks are not subject to any standards, and continue polluting the environment.