Dy CM of Bihar Pitches for Promotion of Electric Vehicles

Sushil Kumar Modi, Hon ble Dy Chief Minister of Bihar assured the automobile dealers of Bihar that all the issues, including removal of entry tax on motor vehicles and registration of vehicles at dealerships, affecting the auto retail in Bihar, will be given a serious consideration and addressed in the best possible manner that benefits both the State and the auto retail trade.

The Dy Chief Minister made these observations while delivering his Address at the 48th Annual Session of FADA at Patna, organized jointly by Federation of Automobile Dealers Associations (FADA) and Automobile Dealers Association of Bihar (ADAB) on 5th October 2012. The Annual Session was attended by over 200 automobile dealers from Bihar and other parts of India.

Speaking as the Chief Guest on the occasion, Modi said, The increasing vehicles sales indicate the state s economy has improved leading to cash flow in Bihar. Much of this credit goes to the NDAGovernment in the State that came to the power in 2004-05. Ever since the NDAGovernment took over in Bihar, the state s economy has grown at a healthy 11.50%. The economy is certainly on a high growth trajectory. Per capita income has gone up remarkably in the last seven years, thus increasing the purchase capacity of average residents. This is one of the reasons pushing up the vehicle sales in Bihar.

Bihar under NDA regime no more remains at the bottom of the development index, a far cry from its earlier days before the assumption of power by NDA, he added.

The Dy Chief Minister pointed out that the State government was concerned over worsening road safety and environment due to the tremendous growth of motor vehicles in the State. Attributing the increasing number of road accidents due to Dy CM of Bihar Pitches for Promotion of Electric Vehicles October 2012 28 lack of awareness of traffic rules and proper drivers training, the Dy Chief Minister exhorted automobile dealers, especially in Bihar, who were present in large numbers, to help and support the Government s efforts in promoting the road safety & clean environment, including the promotion and use of Electric Vehicles in the State. He said that the State Government remained committed to reforms and was open to the idea of registration of all new vehicles, including commercial vehicles, at automobile dealerships.

Vrishin Patel, Transport Minister of Bihar said, The state of Bihar has registered a 500% jump in sale of vehicles in the last 5-6 years. Thanks to the strong performance of economy under the current ruling dispensation, the total number of vehicles sold in 2005-06 stood at 80,363, touched 440,000 in 2011-12. The rise in sale of vehicle is indicative of state s growing economy under the NDA government, he added.

Speaking on the occasion, Nand Kishore Yadav, the State s Road Construction Minister attributed the steep growth trend in vehicle sales to the strengthening of the economy, the government s emphasis on building good roads and the improved law and order situation in the state. The tremendous growth in vehicle sales ever since NDA came to power is also a tribute to the good roads laid out across the state, he said, adding a total of 13,600 km of high quality roads has been built by the NDA government in the past seven years leading to significant reduction in travel time.

Dilip Chenoy, MD & CEO, National Skill Development Corporation (NSDC), in his presentation, referred to the acute shortage of skilled manpower in the wake of economic growth in the country. Spelling out the aims and objectives of NSDC, he said that the formation of Automotive Skills Development Council (ASDC) was an important step in addressing the skill gaps in automotive sector. Referring to the participation of India in the World Skills International, Chenoy suggested to include the selection of dealers employees to represent India at the World Skills Olympics as one of the criteria for adjudging automobile dealers for the Automotive Dealership Excellence Awards presented by FADA annually.

Earlier in his address, Nikunj Sanghi, President, FADA, highlighting the importance of auto sector in the national & State economies, said that the auto retail & service industry - having invested Rs. 35,000 crores, employing directly 7.5 lakh people countrywide and contributing significantly to the Central & State exchequers, plays a very important role in national and State economies due to its far-reaching forward & backward linkages. There are around 250 automobile dealers in Bihar, who have invested close to Rs. 1,000 crores and provide direct employment to over 50,000 people, selling more than 5 lakh vehicles annually. Enormity of direct and indirect dependence of people on auto sector can be gauged from the fact that around 10 lakh people are directly and indirectly employed in the auto business and auto related activities in the State.

Talking about the significance of auto retail to the state exchequer, Sanghi stated that VAT collections in Bihar on vehicle sales have gone up from Rs. 200 crores in 2005-06 to over Rs. 1,000 crores. Auto retail contributes around Rs. 1,750 crores by way of VAT and Transport Department s revenue alone in Bihar. Besides, there is VAT on sales of parts, lubricants and fuel and service tax on repair & servicing of vehicles.

He hoped that multiplicity of and variation in taxes at the regional and local levels would be removed with the introduction of GST to pave the way for faster growth of automobile industry and the economy as a whole. Similarly, there are a host of other taxes on motor vehicles, which are not only pitched at a very high level but also vary from State to State. These taxes, including road tax, registration fee and permit fees, need to be rationalized and made uniform across the country. Incidentally, incidence and cascading effect of various taxes account for 40-50% of the price of vehicles in India, he noted.

President, FADA assured the Dy Chief Minister and other distinguished guests present at the Annual Session that FADA and its constituent automobile dealers are willing to work with the State Government and other stakeholders to improve environment, road safety and conduct drivers training as well as manpower training in the interest of sustained growth of the State economy and auto market. Welcoming the guests and participants, Umeshwar Prasad Singh, President, Automobile Dealers Association of Bihar (ADAB) was happy to note that around 200 automobile dealers from 25 States across India were present on the occasion. He hoped that that the presence of Dy Chief Minister, Transport Minister and Road Construction Minister as well as other senior officials of the State Government would help address some of the burning issues confronting the auto retail in Bihar.

Mohan Himatsingka, Vice President, FADA thanking the Hon ble Guests, namely, Sushil Modi, Dy Chief Minister; Nand Kishore Yadav, Road Construction Minister; Vrishin Patel, Transport Minister; and Dilip Chenoy, MD & CEO, National Skill Development Corporation (NSDC), credited the current State Government for the healthy growth of Bihar s economy and auto market. He said that thanks to the good governance, leading to the improvement in economy, law & order situation and business confidence, vehicle sales have witnessed a five-fold growth during the last 7 years in Bihar. He also thanked other guest speakers for enlightening the audience with their presentations. Himatsingka expressed the hope that high-calibre deliberations of the Annual Session would enable all stakeholders to put their heads together in addressing the issues and challenges of concern to auto retail in right earnest for further growth & development of auto market in the State. AutoLife an initative of AutoFirst Life Insurance Co. to promote road safety jointly with FADA in Bihar was launched on the occasion.

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