1. Why Nitin Gadkari threat to automakers is ill-conceived; more sensible for Narendra Modi government to reveal plans for sector

Why Nitin Gadkari threat to automakers is ill-conceived; more sensible for Narendra Modi government to reveal plans for sector

Apart from reinforcing his can-do image, it is not clear why roads minister Nitin Gadkari chose to strong-arm the auto sector at the SIAM annual convention, threatening to ‘bulldoze’ manufacturers if they did not quickly start rolling out electric cars or those that ran on alternate fuels like ethanol.

By: | Published: September 11, 2017 5:11 AM
Nitin Gadkari, Nitin Gadkari news, Nitin Gadkari latest news, Nitin Gadkari on auto sector, Nitin Gadkari on automobile sector, narendra modi, modi government Nitin Gadkari’s desire to reduce both imports of crude oil as well as pollution suggest his heart is in the right place, but as long as automobile manufacturers are adhering to the law—it is legal to produce both petrol and diesel cars—threatening them is hardly the solution. (PTI)

Apart from reinforcing his can-do image, it is not clear why roads minister Nitin Gadkari chose to strong-arm the auto sector at the SIAM annual convention, threatening to ‘bulldoze’ manufacturers if they did not quickly start rolling out electric cars or those that ran on alternate fuels like ethanol. It clearly rattled the industry, coming as it did on the back of several flip-flops due to either government or court action over the recent past—ironically, at the same convention, NITI Aayog CEO Amitabh Kant agreed with industry that the policy regime had to be both clear and consistent. Gadkari’s desire to reduce both imports of crude oil as well as pollution suggest his heart is in the right place, but as long as automobile manufacturers are adhering to the law—it is legal to produce both petrol and diesel cars—threatening them is hardly the solution. Indeed, in even the United States which is at the frontier of electric cars, the pace of change is not quite clear as of now—does Gadkari seriously expect established manufacturers to junk their production lines and rapidly switch to a technology that is still evolving, even if at a fast pace?

If Gadkari wanted industry to quicken the pace towards clean cars, surely the more sensible path would be to clearly lay out the government’s plans to, for instance, develop charging stations across the country—even a shift from BS-III to BS-IV is preceded by a plan to get refineries to produce the fuel in keeping with the shift in production schedules. Indeed, given the costs involved in redesigning/redeveloping their production, Gadkari needed to have come up with a clear schedule of incentives, including the likely tax policy—this required a detailed discussion paper, interaction with industry on what it needs for the switch-over, including getting component suppliers ready, and, finally, a buy-in from major participants like the finance, power and petroleum ministries. If the new-generation cars are going to be running on electricity generated using dirty coal, for instance, it is not quite clear whether the net benefit to the environment is going to be worth it—while switching the entire automobile fleet to electric vehicles sounds good, can the electricity grid handle the switch and over what period of time? The minister’s outburst now needs to be matched with realistic timelines after discussion with all stakeholders and understanding of their needs. Anything less than that will just reinforce the view that India remains an unpredictable place to do business—recall the ongoing back-and-forth over taxes/cesses on large automobiles. That’s the last thing the government wants given its desire to push Make-in-India and the critical role of the automobile industry in this.

  1. I
    Indra
    Sep 11, 2017 at 9:23 am
    Without a planned policy and action plan to switch over to EV by each manufacturer to meet the Mission requirement and time frame, it will be disastrous to switch over. Today in world, none but Tesla Motors is producing EV cars that have made a success on high production basis. All car manufacturers are still working for a compe ive range of vehicles. It will upset the whole of auto component sectors and will mean a huge disruptions for the sector. Gadkari with his outbursts to please Modi is damaging the auto industry.
    Reply
    1. R
      Ravi
      Sep 13, 2017 at 11:48 am
      So be it. This industry does not exist for most of the common men. It feeds into the pocket of THE concerted mafia chain of RTOs--> Banks --> Insurance --> Police --> Media AD --> Toll collectors --> Spare Part companies --> Auto Dealers who has been irresponsibly dumping vehicles on the road over the years. Nidhin Gadkari possibly has a handful of Electric Car Manufacturers lined up and it is a joke that a Minister comes up with such statement after all the damage is done to the environment - smoke and noise. In many states, the Police plays a passive tole and the bunch of Home Minister jokers does not even negotiate with the Transport / Vehicle Departments and simply allow dumping and traffic violations.
      Reply

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