Society of Indian auto industry (SIAM), the apex auto lobby, has asked the Indian government to stop providing subsidies on diesel as the move is not viable, and rather look at the deregulation of the same. The automotive body has stated that government can offer subsidy to farmers by providing credit, but there should be no subsidy in the general prices of diesel, and thus it should be deregulated.
The move will probably bring down the gap between the prices of petrol and diesel, which might lay a positive impact on the Indian economy. As the declaration of Union Budget 2013 is expected to come anytime soon, industry experts are expecting a hike in the diesel prices.
Reportedly, SIAM is not expecting any important development in the Indian auto sector by the end of current fiscal year. The reason cited for this statement is dedicated to the sales recorded during the last year and particularly the sales of 2012’s last quarter. Expressing his views on the cut of sales forecast for this fiscal, the President of SIAM, S Sandilya said, “The estimates are based on certain variables that we have seen. Based on that we take the total year's forecast and therefore as indicated by the last quarter, we believe that the next quarter is not likely to have any significant increase.”
He however further added that the current forecasts are not a clear indication of the sales to pan out in the coming financial year. Sandilya said, “The next year's sales depend on the action that government takes in the next quarter in terms of budget or in terms of other infrastructure spending. The year 2014 could be definitely different than what is 2013 has been.”
