New Delhi: Reduction in GST rate and introduction of scrappage policy would help in reviving the commercial vehicle sector which has been facing headwinds for quite for some time now, a top Ashok LeylandNSE 5.68 % official said. The Hinduja Group flagship company also expects the situation due to the current downturn in the industry, most recently due to the coronavirus pandemic, to improve gradually during the current fiscal.
“The answer is yes, it certainly will,” Ashok Leyland MD and CEO Vipin Sondhi told when asked if the GST rate cut on commercial vehicles would help in reviving to the sector.
“When you look at the commercial vehicle industry, it’s core to the country, it is pretty much the core industry…to have it at 28% (GST rate) is something which the industry has put 4th to the government in the past and now as well. Will it help? It will help, it could be in one of the possible demand triggers,” he noted.
The other trigger points could be introduction of a scrappage policy and more investment in rural India, Sondhi noted.
When asked about the sales outlook for commercial vehicle industry in the current fiscal, he said, “Fundamentally what we are seeing is that each segment of commercial vehicle industry will have its own trajectory.”
The situation would depend on the various factors like the impact of reforms initiated by the government and other factors like availability of liquidity at the right time, Sondhi said.