NEW DELHI:

Seeking to clarify his remarks on the taxation of diesel vehicles, Union minister Nitin Gadkari said on Thursday that he wanted to convey to automobile manufacturers the need to take steps to reduce pollution and also added that there is no proposal to levy a tax on such vehicles.

Earlier this week, the road, transport, and highway minister’s remarks regarding the need to levy a 10 percent tax on diesel-run vehicles to help cut emissions generated lots of controversy.

“I am not against diesel fuel, and neither are we going to levy any tax on diesel vehicles,” Gadkari  told CNBC-TV18.

The road transport and highways minister noted that, from a pollution point of view, diesel is very hazardous and is really causing health problems in the country.

Gadkari emphasised that he is not against any industry and pointed out that the government is already giving incentives for electric cars.

“So my suggestion to the industry is that the best way to reduce pollution is to concentrate on alternative fuel,” he added.

On September 12, speaking at the annual convention of automobile manufacturers body SIAM, Gadkari had said rising pollution levels are a serious health concern and there is a case for increasing taxes to dissuade the sale of diesel vehicles.

“I am requesting the Finance Minister to impose an additional 10 per cent GST on diesel engines and vehicles.This is the only way to phase out diesel vehicles,” he had said. But soon after, he took to social media platform X to clarify the government’s position.

“It is essential to clarify that there is no such proposal currently under active consideration by the government,” he had said in a post on X, referring to media reports quoting him as suggesting an additional 10 per cent GST on diesel vehicles.

Automobiles are currently taxed at 28 per cent GST, with additional cess ranging from 1 per cent to 22 per cent depending on the type of vehicle.

SUVs attract the highest GST at the rate of 28 per cent along with a compensation cess at 22 per cent. 

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

Two-wheeler domestic wholesales were down at 12,82,054 units last month, as against 13,81,303 units in July 2022. | file photo
| Photo Credit: PTI

Domestic passenger vehicles wholesales registered a 2.94 per cent year-on-year increase in July at 3,02,521 units, the Society of Indian Automobile Manufacturers (SIAM) said on Thursday.

As per the latest data issued by SIAM, dispatches of passenger vehicles (PVs) from manufacturers to dealers were at 2,93,865 units in July 2022.

Two-wheeler domestic wholesales were down at 12,82,054 units last month, as against 13,81,303 units in July 2022.

Three-wheeler wholesales were higher at 56,034 units, as compared to 31,324 units in the year-ago month.

Total vehicle dispatches across categories were at 16,40,727 units, as compared to 17,06,545 units in July 2022, SIAM said.

“Though the passenger vehicle and three-wheeler segments are performing well, there has been a de-growth of two-wheelers in July 2023, compared to July 2022. Overall, we expect that the positive economic environment, good monsoons, and upcoming festive season will support continued growth in the auto industry,” SIAM President Vinod Aggarwal said.

The decline in the inflation rate in June is primarily due to a fall in prices of mineral oils, food products
| Photo Credit: Reuters

India’s wholesale prices remained in deflationary territory for the third successive month in June, with the pace of price contraction from a year ago quickening to -4.12% from -3.48% in May.

This is the sharpest contraction in wholesale prices in about eight years, and was largely aided by the base effects from last June when wholesale price inflation was 16.2%, and some deceleration in commodity prices.

Some food items such as milk, cereals, pulses and wheat, reported high inflation rates in the range of 8%-9%. Vegetables reported 22% deflation year-on-year, but prices were up 13.2% in June, when compared to May.

While fuel and power inflation rate skidded to -12.6% in June from -9.2% in May, the dip in prices in other categories was milder, with the Food Index down just 1.2% compared to -1.6% in May. Sequentially, however, wholesale food prices were up 1.4% from May.

Deflation in primary articles’ prices moved to -2.9% from -1.8% in May, but their prices inched up 0.6% from May. Manufactured products’ prices fell 2.7% from last June and 0.5% from May 2023 levels.

The Commerce and Industry Ministry said the decline in the inflation rate in June is primarily due to a fall in prices of mineral oils, food products, basic metals, crude petroleum & natural gas and textiles. The ministry also revised upward the inflation rate for April 2023 to -0.79% from -0.90% estimated earlier.

Rating firm ICRA reckoned that the deflation in the WPI will ease to 2%-2.5% in July with global commodity prices seeing a sequential rise of 1.2% so far this month. The surge in prices of vegetables, with a “moderate hardening in cereals and pulses” due to supply disruptions amid excess rainfall, along with the lag in sowing of major crops and the onset of El Nino conditions impart uncertainty to the food inflation outlook, it noted.

“The moderation in food inflation in year-on-year terms masks the sequential price rise: The month-on-month increase in food prices was similar to that seen in retail inflation data for June,” said a research note by Barclays’ analysts, which said food prices surged across the board in June, except in the case of fruits and oilseeds.

The gap between retail inflation, which hit a three-month high of 4.8% in June, and wholesale inflation has now widened to 893 basis points, the highest since June 2022, and economists expect the deflation in wholesale prices to help moderate retail prices with a lag.

One basis point equals 0.01%.

“The private sector lost steam and the manufacturing sector, which dominated fresh capex plans in recent quarters, saw a drop in terms of project numbers as well as investments proposed” File
| Photo Credit: Reuters

Private investors turned cautious in the first quarter of 2023-24, with fresh manufacturing investment plans shrinking 17.5% year-on-year and overall project outlays rising just 4.7% to ₹3.88 lakh crore, according to Projects Today.

While the April to June period (Q1) recorded a sharp sequential decline in investment plans announced by private players — from a record high of ₹10.5 lakh crore in the previous quarter — proposed outlays by the Centre and State government did the heavy lifting.

Sluggish private investment

An 80.9% year-on-year surge in public investments — which crossed ₹3.93 lakh crore during the quarter — brought the private sector’s share in fresh investment plans below the 50% mark for the first time after 13 quarters of dominance. The share of private investment plans in the first quarter of 2022-23 stood at 63% and had risen to 72% between January and March 2023.

While investments planned by domestic industry rose 5.55% from a year ago, foreign investors’ investment plans grew just 1.8% to a tad over ₹84,000 crore.

“The private sector lost steam and the manufacturing sector, which dominated fresh capex plans in recent quarters, saw a drop in terms of project numbers as well as investments proposed,” noted Shashikant Hegde, Projects Today director and CEO. “This quarter belonged to the government sector, with Central government projects rising over 122% to ₹1.93 lakh crore and State projects surging 53.3% to cross ₹2 lakh crore,” he said.

Better implementation needed

Despite their insipid 4.7% rise in Q1, fresh investment announcements by the private sector are expected to remain positive in the next three quarters, according to Mr. Hegde. More importantly, the project implementation ratio — that is, the translation of investment intent into money on the ground — needs to improve.

“At present, the ratio for private projects under implementation is hovering around 30.92% vis-à-vis 36.55% seen in the public sector,” he emphasised.

The bulk of private investments in Q1 were planned in sectors like food processing, electronics, automobiles, hydel and solar power, ports, real estate, and data centres. Government investment commitments, on the other hand, were largely in petrochemicals, mining, hydel power, water supply, roadways, power distribution, and industrial parks, as per Projects Today’s Investment Survey for Q1, 2023-24.

Maharashtra emerged as the top State in Q1, playing host to almost a third of the investment projects announced in terms of value, at ₹2.38 lakh crore, far ahead of Karnataka (₹81,957 crore) and Gujarat (₹74,054 crore). Uttar Pradesh, with 199 projects worth ₹48,356 crore, and Telangana, with 197 projects worth ₹48,225 crore, completed the top five States in terms of Q1 investment plans.