Domestic automobile makers may have a reason to celebrate if the government’s initiative to open up the road transport sector in the passenger segment, by abolishing the permit raj, indeed happens, industry sources said.
Passenger traffic on our roads has to be made more efficient for the benefit of the common man and the middle class as this is a totally unreformed sector which suffers from several impediments, Finance Minister Arun Jaitley said while presenting the Union Budget for 2016-17, on February 29.
“The government will enact necessary amendments in the Motor Vehicles Act and open up the road transport sector in the passenger segment and an enabling eco-system will be provided for the states which will have the choice of adopting the new legal framework,” Jaitley said.
Entrepreneurs will be able to operate buses on various routes, subject to certain efficiency and safety norms, he said.
“The major benefits of this game-changing initiative will be provisions of more efficient public transport facilities, greater public convenience, new investment in this moribund sector, creation of new jobs, growth of start-up entrepreneurs and other multiplier effects,” the minister said.
While addressing key transportation issues, implementation of the decision might also lead to a spurt in automobile demand not only in urban, but rural areas as well, feel sources.
While the announcement of doing away with permit raj might benefit the automobiles sector that related to infrastructure cess may adversely impact the industry, feel sources.
In his Budget speech, Jaitley said,the pollution and traffic situation in Indian cities is a matter of concern.
“I propose to levy an infrastructure cess of 1% on small petrol, LPG, CNG cars and 2.5% cess on diesel cars of certain capacity and 4% on other higher engine capacity vehicles and SUVs," Jaitley said.
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