Date:13/04/2004 URL: http://www.thehindubusinessline.com/2004/04/13/stories/2004041300070801.htm

Back Boost to auto industry

This is with reference to "India up 2 slots in auto rankings" (Business Line, April 10).

Having reached the 13th position from the 15th indicates economic growth.

Car sales in January and February 2004 grew 48 per cent from an average of 27 per cent between April and December 2003.

The easy loan schemes, improved roads, increased income and the effort to bring in small cars at cheaper rates should give a boost to the industry.

However, there is no place for complacency. Already "Chinese luxury buses have hit Indian roads".

The Government will have to consider additional incentives on two counts.

It could effect a further reduction in excise duty, which will reduce car prices and lead to an increase in demand, production and sale; and compensate loss in income due to lowering of taxes.

One needs also to look into the problem of rupee appreciation.

A. Jacob Sahayam

Thiruvananthapuram

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