Auto industry pitches for special zones

The Automotive Mission Plan, released today, aims to make India a global hub for design and manufacture of automobiles and automotive components for achieving a consistent volume growth of 16 per cent for the next 10 years.

At this growth rate, the industry volumes will touch $145 billion from the present $ 34.6 billion besides creating 25 million new jobs in the country.

The 10-year plan was released today at the Siam annual convention in New Delhi.

The industry has asked for a tax holiday for all investments over Rs 500 crore with 30 per cent deduction in the net income for the first 10 years for new industrial projects and 100 per cent deductions of export profits.

To reduce red-tapism, the industry has demanded one-stop clearance for all foreign direct investments and concessions to establish new plants or expand existing facilities.

Though all the state governments have initiated a policy of easy industrial facilitation, the auto industry has demanded preferential allotment of land for automotive plants.

Continuous power supply still remains the major demand so as to reduce the dependence on alternate modes of fuel and promotion of captive generation of power.

Asking the government to play the role of a facilitator to create infrastructure of rails, road and ports so as to help exports in a big way, the industry has suggested creation of three automobile export hubs at Mumbai, Chennai and Kolkata, separate parking slots for vehicles and dedicated road network to ports for fast movement of export products. Suzuki has already demanded a dedicated port facility for the export of cars from its joint collaboration manufacturing facility with Nissan.

For a major boost to exports, the mission plan envisages maintainence of a three-tariff structure for raw material, intermediate products and finished products.

Enforcing VAT throughout the country and a comprehensive General Sales Tax regime to increase export competitiveness of Indian automobile manufacturers have also been suggested.

The plan also suggested special auto zones on the lines of special economic zones. The SAZs should have special free & multilateral trade agreements with various countries and customs exemptions on inputs along with sales and excise duty incentives. The state governments should set up these SAZs and help accommodate the existing auto units in them.

Incentives for fleet modernisation is an important part of the plan with a 15 year life span tag on vehicles.

With emphasis on the inspection and certification system computerised Regional Transport Officer's and driving licensing system will be developed.