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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.

By Parikshit Luthra Dec 16, 2020 9:52:55 AM IST (Updated)

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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.

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