Govt offers booster dose for CVs
In a relief to the automobile sector, which has been hit by lack of retail finance, the government has announced a slew of measures, including allowing public sector banks to provide line of credit to NBFCs on new purchases, in order to boost demand.
As a part of the second stimulus package, an arrangement has been worked out allowing leading public sector banks to provide line of credit to non-banking finance companies (NBFCs).
Besides, an accelerated depreciation of 50% will be provided for commercial vehicles (CVs) to be purchased between January 1 and March 31 this year.
Further, as part of the package, state governments would be provided with a one-time assistance under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) to purchase buses for urban transportation.
Since the automotive sector is “heavily involved in exporting”, some of the export incentive through Exim Bank, would also be beneficial.
Exim Bank has obtained a line of credit of Rs5,000 crore and would provide pre-shipment and post-shipment credit to Indian exporters at competitive rates.
The country’s commercial vehicle’s segment is the hardest hit in the ongoing slowdown in the domestic automart. Commercial vehicles saw a crash of 49.52% in November last year.