Recipe for recovery: Auto industry claims not entirely credible, here's what must be done for economy
Every crisis is an opportunity, so goes the saying. For Indian industry, it is an opportunity to lobby for a handout from the government at taxpayer’s expense. The auto industry’s case shows how far our industry leaders can cash in on this opportunity. Multiple representatives of auto industry have pleaded for help on the ground that this sector accounts for 50% of all manufacturing and has declined by 30%. Now, the latest press note on GDP by MOSPI reports that manufacturing as a whole grew 0.6% in the first quarter of 2019-20. Simple arithmetic show that this means that manufacturing other than auto grew a fantastic 31.2% during the quarter. Wow!
But let us give the auto industry some rope and accept that it is only human to exaggerate to attract attention in the midst of a crisis. Assume that the share of autos in manufacturing is not 50% but 30%, and that its sales fell not by 30% but 20%. Even then it follows that manufacturing other than auto grew a handsome 9.4% during the first quarter of 2019-20. Does anyone believe that?
A Reuters report also says that according to a senior industry source automakers, parts manufacturers and dealers have laid off 3,50,000 workers since April 2019. The same report also says, “Reuters was able to identify at least five companies that have recently cut or plan to cut hundreds of jobs, mainly from their temporary labour force.”