The new year is not going to be much cherishable for both car makers and probable buyers as the government has announced to roll back the cuts on excise duties. This move of the Indian government will make the prices of cars increase by about 6 to 8 per cent. Moreover, car manufacturers had already buckled up for a price hike of about 1 to 2 per cent.
Government was willing to take this step in June ‘14, but the circumstances led them to wait till the year end. The excise cut had forced the manufacturers to cut the price for the customers, making a good sale, but with this decision of the government the car companies will have to retract to the initial prices causing a hike in the Indian auto market. It is being said that this rolling back of the sops will help the government raise some revenue in the remaining three months of the financial year, and will help in meeting the fiscal deficit target of 4.1 per cent of the GDP.
It is evident that this end in the excise sops will also lead to a hike in the price of a few households like refrigerators and televisions, etc. However, industry experts have mixed reviews on this move of the government. Some of them are worried that this will affect the demand and sales of the products, while the other few remain neutral and are of the view that sooner or later, this had to happen. Although the demands will see an initial impact, the disputes will settle and the demands will again see a rise in the near future.
