Industry seeks diesel deregulation

The government is all set to announce the next phase of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The first phase which kicked off in 2005 ended in March 2012. The second phase envisages a spending of Rs 1.74 lakh crore including a roadmap for the funding of buses.

This was disclosed by Saugata Roy, Union urban development minister of state, at the 52nd convention of the Society of Indian Automobile Manufacturers (SIAM). While the first phase of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) saw investments of Rs 100,000 crore, 101 roads and highways projects were taken up, that incurred an investment of Rs 8,480.60 crore including work on intersections and improvements in 65 mission cities. All this was part of the focus of the National Urban Transport Policy formulated by the ministry whose key philosophy was to “move people and not vehicles”.

The government then decided to promote mass transportation systems, Roy added. This has manifested itself in the form of the metro projects in some cities, the Gurgaon Rapid metro and the Bus Rapid Transport System (BRTS) in 10 cities which aims to provide a ‘metro-like’ experience in bus transport. Earlier, S Sandilya, president, SIAM, who opened the convention, urged the government to announce the de-regulation of diesel prices, even if it had to do so in phases. Underlining the Convention’s theme — India’s role in the changing world order — he stressed the need to bring on track a long-term strategy for public and private mobility, while expressing optimism in the automotive sector’s bright future.

On other fronts, the inclusion of CBUs in Free Trade Agreements with countries having a strong automotive manufacturing base could vitiate the atmosphere that is currently prevailing in terms of new investments and were contradictory to the National Manufacturing Policy, he said. Sandilya also urged the Centre to make available Bharat Stage IV- compliant fuel throughout the country so as to enforce a single emission level norm by 2015.

The need for new fuel efficiency norms and labelling, which is to come into force from next year as well as the formal launch of the new National Mission on Electric and Hybrid Vehicles, enforcement of the GST regime for enabling a uniform taxation structure, development of quality infrastructure to meet the requirements of the rising vehicle population, as also the need to support R&D, testing, certification and skills development was also broached at the Convention.

On behalf of the Confederation of Indian Industry (CII), Adi Godrej, CII president and chairman, Godrej Group, called for investor-friendly FDI policies. “We are working with the government for rationalising and modernising legislation pertaining to land acquisition and mining. CII believes that exports will be the next step for growth, particularly in the automotive sector where India is already emerging as a small car hub. Towards this, we are determining transaction costs in offering more incentives for export production to SMEs,” he said.

In fact, economies that facilitate and incentivise creative thinking and new processes are home to dynamic and thriving manufacturing trends and changes. At present, Indian auto companies import parts from China which, in turn, imports raw materials from India. There is now more scope for finished vehicles to be exported to Africa and Europe and a thrust is required in this direction. Further, making SME systems and processes competitive is paramount to further technology adaption as also access to finance and intelligent marketing. At the large enterprise level, competitiveness could be extended to R&D, innovation and design to stay ahead of the curve and to be able to predict customer preferences and develop products accordingly, Godrej added.

Auto meter

Union minister for heavy industries, Praful Patel while stating in his address that it had not been a happy year for the auto sector, said the Indian auto segment is doing much better than most other industries. On diesel pricing, he maintained that arriving at a consensus was tough. Patel’s views on the economy as a whole were: “From an India perspective, until we grow at 8-9 percent, I don’t think we can ever be satisfied with the rate of growth of the economy.”

Among others who addressed the SIAM session included Gary Johnson, VP, manufacturing, Ford Asia Pacific and Africa. He spoke about India in Ford’s scheme of things in Asia and that his company is looking for a sizeable part of the Indian car segment which is expected to increase to nine million units by 2020.

About 24 percent of Volvo’s sales come from Asia, up from seven percent some years ago. Volvo India’s new managing director, Philippe Divry who is senior vice- president, Truck Joint Ventures, reiterated that developing markets like India’s presented a unique challenge to companies like Volvo where a part of the gameplan is the trade-off between features and costs. In developing markets, there would always be both value and premium products and the only thing that would change is the proportion between the two.

PawanGoenka, past president, SIAM and president of Mahindra & Mahindra’s automotive and farm equipment sector, was of the opinion that the JNNURM had improved public mobility. But road networks in smaller cities still remain inadequate due to which a National Policy for a modern transport and mobility infrastructure is the need of the hour. This would usher in a safe, environment-friendly and convenient mode of transportation for the masses aided by integrated intermodal and connected transport system solutions, he said.

Urban mobility needs

The issue of urban mobility was put in perspective by Kamal Nath, minister for urban development, by saying that while India had 51 cities with a population of over one million at present, that number is expected to increase to 70 cities in 10-12 years.

This presents unique transportation challenges and his ministry wants to partner with the auto sector to offer solutions. Further, IT-enabled traffic systems will be the thrust in the government’s urban renewal mission. The minister also said that the country’s municipalities do not know how to prepare a detailed project report and that he has urged them to raise funds via the bonds route.

The two planks of the government’s policy are fuel efficiency and safety, disclosed JitinPrasada, roads and highways minister. The government is also keen to introduce electronic tolling and towards this goal has set up the Indian Highway Management Company, he pointed out while giving no timeline for this.

Among other initiatives, he said the government plans to set up more inspection and certification centres to assess whether or not vehicles are roadworthy and wants to provide cashless treatment facility to accident victims. Other speakers chose to talk about India’s emerging middle class and need for aligning policies with the requirements of the sector to facilitate growth, the national manufacturing policy and Special Economic Zones. While highlighting the problems of overcrowding, congestion and density in urban centres where car ownership is higher compared to the 11 per 1,000 people elsewhere in the country, the need for a balance between infrastructure and vehicle population was felt and hence the introduction of innovative types of transportation and mobility.

Overall, the general refrain at the SIAM Convention was for a proactive government to facilitate implementation of new technologies, a thrust to electric and hybrid mobility to make India a leading power in electric vehicles and hybrids, along with a clear land acquisition policy. However, several issues including human resources and talent retention in particular could have been taken up but were not and, given that this is an industry-wide issue, SIAM should have taken this up comprehensively.