The Indian government will not renew tax breaks for cars and bikes and a slew of consumer durable goods. CCTV’s Ravinder Bawa reported this story from Delhi, India.
Major tax breaks expire in India, consumers to see prices rise 5-8 percentThe Indian government will not renew tax breaks for cars and bikes and a slew of consumer durable goods. CCTV's Ravinder Bawa reported this story from Delhi, India.
Consumers in India will see rising prices this year. Car prices have risen 6-8 percent and consumer durables are up by 5 percent due to the government decision. Some say that the Indian auto sector will be impacted by lack of a tax break.
“Even in India, at this level, auto industry has also already emerged as one of the significant employer and anything that hurts the industry hurts will impact the overall market and the economy. This will have a negative impact on overall economy. It is one of the engines of the economy,” Sugata Sen, deputy director general of Society of Indian Automobile Manufacturers said.
Passenger car sales in Dec. 2014, grew by 15 percent, and they are now expected to fall as the vehicle prices will rise by 6-8 percent this year. Car sales will also be slow, affecting the small car markets the most.
The rollback of tax breaks means companies will raise prices on refrigerators, televisions, and washing machines.
Experts said that these steps are necessary to strengthen the economy.
“Even in India, its very clear that the fiscal situation is quite stressed the government has to do all to get back to baseline position… there will be an impact on industry and that is inevitable,” economist Subir Gokaran said.
The new government measure aims to achieve the fiscal deficit target of 4.1 percent of GDP.
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