KOLKATA: Federation of Automobile Dealer’s Associations (FADA), a lobby of automobile dealership owners, wrote to our Prime Minister’s Office on Monday. In a letter, their president Ashish Kale said, “ Temporary support (measures) are extremely urgent and important to help us cushion the shock to our cash flows and the only way for us to continue in business till demand comes back to normalcy”. The letter requested a 20 percent additional overdraft on sanctioned credit limits to support salary disbursements and other fixed expenses and a 4 percent subsidy on all categories of loans availed by business owners, for a period of 6 months, post lock-down. They urged the Employees’ State Insurance Corporation to pay for their employees including a plea for a full waiver of interest, while lock-down is in effect.
Additionally, the letter appealed for the inclusion of their companies into the MSMED (Micro, Small and Medium Enterprises Development) Act from 1st of April, 2020. This effectively makes any buyers who fail to make payments to MSMEs, as per agreed-upon terms or a maximum of 45 days, liable to pay thrice the bank- set compound interest rate, per month.
Kale said, “The current situation can lead to an existential situation for many of our members and their employees. Majority of them are small-scale family-run businesses, with no financial sustenance for such a crisis after having gone through a tough period, in past 15 months,” in the letter.
FADA says that SIAM has projected that India Auto Inc. might witness a huge drop in sales – as high as 35 percent for some segments, above the 18 percent drop, previously predicted for FY2020. The letter made several suggestions, regarding the revival of automobile sector. Seeking a priority sector tag for a period of 12 months was one of them. Extension of vehicle depreciation benefit to FY21, incentive-based scrapage policy for old vehicles, reduction of GST rate on automobiles were also suggested. The PMO is yet to give any formal comment about this letter, to the media.