Parliament’s Standing Committee on Commerce said the shutdown cost millions of jobs in the automotive sector.
The Parliamentary Standing Committee on Commerce, chaired by Telangana Rashtra Samiti (TRS) MP Keshav Rao, has also outlined some measures to boost investment in the auto sector. This includes changes to existing land and labor laws. The committee said that the decline in auto production has also hit component manufacturing companies.
- Last updated:
15 December 2020, 10:54 PM IST
The parliamentary committee also mentioned some measures to increase investment
The Parliamentary Standing Committee on Commerce, chaired by Telangana Rashtra Samiti (TRS) MP Keshav Rao, has also outlined some measures to boost investment in the auto sector. This includes changes to existing land and labor laws. The committee said in a report that all major core components, equipment manufacturers (OEMs) have reduced their production by 18 to 20 per cent due to declining vehicle sales, according to automotive associations. As a result, employment in the automotive sector was adversely affected and an estimated 3.45 lakh jobs were lost.
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According to the report, recruitment in the automotive sector is almost stagnant. In addition, shops of 286 auto dealers have been closed. Part of the decline in vehicle production has also had an adverse effect on the manufacturing industry. The biggest impact has been on micro, small and medium enterprises (which are MSMEs) that were involved in the manufacture of automotive equipment. The committee said that the production of vehicle OEMs has been hampered due to the Kovid-1 ep epidemic and the lockdown imposed for prevention. This caused a daily loss of about Rs 2,300 crore to the automotive sector.
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‘Auto industry may fall two years’
The Parliamentary Committee also stated that “the lockdown will be completely relaxed and the real outcome depends on how the Covid-1 crisis unfolds.” According to the report, a major downturn in the auto industry is being feared in at least two years in the wake of the crisis. This will reduce capacity utilization, reduce capital costs, reduce the likelihood of corporate bankruptcy and adversely affect nook jobs in the entire automotive sector.