Home / Industry / Manufacturing /  Govt and Industry needs to change the way they interact : R C Bhargava

The union government and Indian industry should change the way they interacted with each other in the wake of the Covid -19 pandemic, to engineer a recovery in the automobile sector and the overall economy, said RC Bhargava, chairman Maruti Suzuki India Ltd at Mint’s Pivot or Perish webinar on Thursday.

“The industry and the government have to change the way they interact. There was trust deficit due to corruption, tax evasion and other reasons, and that will have to change. In the last three years there are companies moving out of China to other countries but not many of them have come to India. We have to create an Indian industry which has to be globally competitive," added Bhargava.

Vehicle manufacturers had to close their factories from March 22, following the lock down announced by the union and state governments to contain the spread of the Covid-19 pandemic. The company though in the meantime was working with its suppliers to create standard operating procedures (SOPs) that need to be followed once manufacturing starts.

The auto industry has been facing several headwinds in the past one and a half years and have also experienced double digit volume decline in volumes.

According to Bhargava, the auto industry contributes almost 50% of the manufacturing sector and what happens in the auto sector will help shape the other parts of the industry as well.

“The way we have interacted has undergone a huge change (due to the Covid-19 pandemic). It has also revealed some inherent and apparent flaws in the Indian industry. The auto industry had a bad FY 19-20. Just when we were suppose to revive sales we got hit by this virus. ," added the octogenarian.

The auto industry has been urging the government to reduce Goods and Services Tax levied on vehicles across categories and introduce an incentive based scrappage policy to revive the sector.

“Demand in India is constrained by affordability and the main reason is taxation from our socialist days. Demand creation has been an issue and this has to be backed by the government. Affordability has been an issue for some time and cost of manufacturing will be higher," Bhargava added.

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