It’s raining bailouts and why should Indian automakers get left out of the party?

Although the industry is not looking for cash bailouts, some other incentives won't hurt in this tough environment.

There are fears that the vibrant Indian auto industry, while registering growth in some segments, might slip into negative growth. But at the moment the Minister for Heavy Industries and Public Sector Enterprises, Santosh Mohan Deb, is pitching for the sector hit by slowdown.

"We have taken up the issue with the finance ministry but no one can forecast when the announcements will be made. Now, everyone is busy with the elections and there are also restrictions on announcing anything,” said Deb.

An incentive proposal by the ministry has been sent after direct consultations with the Society of Indian Auto Manufacturers that made its wishlist clear. And like many other sectors, auto industry too wants to see interest rates coming down by one to three per cent.

But the larger issue is the long-standing demand of parity in excise duty, meaning bringing excise duty on larger cars down from 24 to 12 per cent — as it is for small cars and bikes.

The industry also wants the additional Rs 15,000 levy on cars and SUVs with engine capacities of 1500-2000 cc that was imposed in June to be scrapped. The same goes for the Rs 20,000 levied on cars with engines exceeding 2,000 cc.

Finance Minister P Chidambaram wants industry to cut prices to create demand and the automakers believe that an excise reduction would help facilitate that price cut. But the other concerns like raw material costs and liquidity for capex plans also remain.

However, the consensus is that easier availability of cheaper loans and the price cuts would be a big boost from the sales point of view.