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February 28, 2001                                       Feedback  

    - EXIM POLICY '00



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'Govt has no business to be in business'

Madhur Bajaj

We are all very happy with the Budget by and large.

The car industry has been facing hard times. Demand in 2000 was expected to be a million. However, it was only 600,000 plus. With many players in the arena, there were large losses that led to Indian companies not being able to sustain them and they had to give way to foreign ownership and control.

Prices are governed by many factors. Maruti is trying to gain back its lost market share and it is succeeding by lowering prices. As others too are doing the same, competitive pressure will continue.

The excise duty reduction will enable manufacturers to pass on concessions to the consumer.

In India, we are seeing a major shift from scooters to motorcycles. We being a dominant player in the scooter market, with a 70 per cent share, will be affected adversely. The reduction in excise duty will help the scooter industry gain some lost ground, I hope.

I'm specifically happy that the finance minister has done all that we wanted him to do for our industry.

Bajaj Auto is a leader in the two- and three-wheeler industry in India for four decades. This Budget has reduced excise duty on most of our vehicles.

The Budget is good, given the constraints the minister had.

On the sell-off of 27 public sector units, including, Maruti, Air-India and Videsh Sanchar Nigam Ltd, I think the government has no business to be in business. It must govern and let industry manage companies.

Whatever money is generated through divestment can go towards redemption of debts and for developmental purposes like infrastructure and education.

The excise duty on cars has been reduced from 40 per cent to 32 per cent, which will definitely affect prices downwards.

The minister has removed the 10 per cent surcharge on income and corporate taxes. Besides, he has reduced the dividend tax from 20 per cent to 10 per cent.

On measures against the dumping of goods by China, second-hand automobiles will have to face a tariff of 180 per cent. Besides, there will be non-tariff barriers in terms of the Central Vehicles Regulation Act and emission.

There is presently a ban on the import of motorcycles. However, from April 1, 2001, when all quantitative restrictions will go, one can import motorcycles.

Madhur Bajaj is executive director, Bajaj Auto Ltd

Budget 2001

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