In the last 8 months, Indian Automobile sector is facing a harsh time. The automobile which usually made cars trucks heavy loaded machines. As per the reports, sell off the car and other trucks have declined up to. As per the experts, this type of diminish was not seen in 2008 when the world was facing an economic slowdown. At that time India also faced that situation but the situation does not make an impact on the automobile sector.
We can say that the Golden Egg sector ( Auto Sector) is facing this type of decline from the last 6 to 8 months. As per the reports decline has reached up to 20 to 25% in Auto sector. Major carmakers like TATA, Mahindra has already padlocked their production units due to the stipulation. Now let’s talk about why the demands of the cars have declined.
1) In last October finance companies which provided consumers loans to the buyers is facing the same problem as banks of India has faced during the last year. Now, these finance companies are not providing a mortgage to consumers or customers.
Main reasons why these finance companies, not providing loans is due to a catastrophe.
2) Another main reason is the economic growth of India, according to economic experts like DR Shankar Acharya who was also the chief economic advisor in Last UPA Government and NDA Government. Dr Acharya has written that India’s GDP Growth is between 4to 5 per cent.
3) The main why India’s is facing these decline is conditions of rural areas in Indias. These rural areas are facing a lasting situation due to GST and Note Bann. RBI has also said this is a Structural Crisis. As per the economic specialist its structural crisis its because of the miss management in economic policies by the government. NPA is increasing day by day of Finance Companies. The automobile sector is known as the beam sector of the economy which tells that where Country’s Economy is going.
4) As per the media reports, car dealers are saying that for the first time in this Diwali there is no business for them. Around 300+ showrooms have been halt.
What are the main Challenges that Indian Economy may face
*muted monetary transmission
* slow GST collections
Today Goldman Sachs published the reports which notify India’s progress on growth and inflation, some of the big challenges for the economy include weak investment, muted monetary transmission and slow GST collections. The report also mentioned that India’s GDP growth increased from an average of 6.7 per cent during 2010 to 2014 to 7.3 per cent during 2015 to 2019, while, average inflation has declined from 10 per cent to 5 per cent during the same period.
On the inflation report outlines that inflation has declined from 10 per cent to 5 per cent during the same period. “Despite growth being strong, overall, the investment climate was pretty weak,” said Prachi Mishra, India Chief Economist, Goldman Sachs.