Govt. woken up on chaos in Automotive Industry

by September 6, 2019 0 comments

Govt. woken up on chaos in Automotive Industry
The Government has finally woken up to the chaos it has unleashed, thanks to the fear of massive job losses

A couple of years ago, while addressing the annual conference of the Society of Indian Automobile Manufacturers (SIAM),  Minister of Road Transport and Highways Nitin Gadkari had threatened to bulldoze the automotive industry if it did not adapt to an electric future. Persuaded by some deeply flawed metrics used by policy wonks at the Niti Aayog about how India’s future mobility was going to be electric, without giving any thought whatsoever about jobs and such other “extraneous” matters, he believed that our country could not just catch up with China on electric vehicles (EVs) but also take the lead. A few years later, the automotive industry is not only suffering a massive sales slowdown but dull investment on EVs other than some glorified traders importing products from China and pretending to be technology leaders. Meanwhile, the automotive industry that directly and indirectly employs millions of people and affects the economy is talking of huge job losses. The impact of the slowdown is already being felt as suppliers have cut jobs due to reduced demand. This is showing in the towns and villages that support the automotive trade, particularly in the Gurugram-Manesar belt, Pune and Chennai. Everybody, from landlords to barbers and even bars and those who provide more salacious services, has been hit. In this case, like in many others, no serious thought was given to the consequences of the grandiose statements and plans. Suddenly, the fear of job losses and the subsequent social strife are ringing all sorts of alarm bells in the Government, especially at a time when a few States like Haryana and Maharashtra are going for polls in a couple of months. Tamil Nadu, where some plants have been hit, too, would go to polls in a couple of years under this shadow.

So, Gadkari appeared a chastened man at this year’s SIAM conference. At least he had the dignity to attend the event unlike fellow Ministers who chickened out. Far from bulldozing the industry, he smacked down the silly talk from the Niti Aayog on electrification and even said that he would speak to the Finance Minister about a duty cut on cars, at least temporarily. But most importantly, he said that he would argue the case for a duty cut on hybrid vehicles as reducing fuel bill and emissions remained a valid concern. Hybrids, not pure electrics, are the best solution for a cost-conscious market like India. In fact, given our reliance on thermal electricity and a lack of charging infrastructure, petrol-electric, plug-in hybrids would have the lowest carbon footprint in the Indian context for now, according to a paper by the Brookings Institution. That could change once India has more power coming from cleaner, renewable sources and has developed both charging infrastructure and mega-battery manufacturing facilities. Electric and other zero-pollution vehicles are still the future, of that there is no doubt. But the plan to rush headlong into electric vehicles without an iota of thought to fairly basic things like battery recycling and ambient heat in India, which severely impacts charging let alone the promise of 24/7 reliable, clean electricity across the country, was a stupid one. Sense seems to have come back in the Government but the senseless actions of a few in the past two years might have already caused the cancer to become malignant.

Writer & Courtesy: The Pioneer

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