Moneycontrol Be a Pro
Get App
Last Updated : Jan 08, 2019 03:32 PM IST | Source:

Why is the Modi govt lagging in auto reforms?

Several of the government’s promises aimed towards reforming the automotive sector remain a pipe dream

Swaraj Baggonkar @swarajsb

As the tenure of the Narendra Modi-led government comes to a close later this year, several of its promises aimed towards reforming the automotive sector remains a pipe dream.

National Automotive Board (NAB), is one such initiative that is stuck since its proposal during the United Progressive Alliance's (UPA) rule in 2011. Though taken up by the National Democratic Alliance (NDA) regime, the quasi-public corporation, which was to steer, coordinate and synergise efforts of the government in on-going and new initiatives, is yet to take off completely.

Instead of steering core issues in automotive testing, collaborative R&D, suggest policy and regulations, develop technology platforms and implementing recommendations of the Automotive Mission Plan, NAB has become a programme manager for electric mobility and intelligent transport system.


As per the government's definition, NAB would ‘work as a nerve centre of organisational interactions between the government, industry and the academia functioning under the Department of Heavy Industry’. The post of a Chairman at NAB is yet to be filled even four years after the NDA government floated the vacancy.

“NAB was supposed to be the channel through which the automotive industry would coordinate with the government. At present, there is no synergy and one feels that all departments of the government gives directives to the auto sector unilaterally. In all the interactions with the government, it was reminded of NAB and there seems to be no urgency to get the unit up and running. The NAB is in a cold storage,” said a senior person from a lobby body of the automotive companies.

The absence of NAB has allowed even the Oil & Gas Ministry to issue directives to the automotive sector which is otherwise the job of Ministry of Road Transport & Highways or the Department of Heavy Industries.

The Oil Ministry had informed the Supreme Court that vehicles not complying with Bharat Stage-VI standards won’t be allowed to ply on Indian roads.

Safety programme

Bharat New Vehicle Safety Assessment Programme (BNVSAP), the India version of Europe-based GNCAP (The Global New Car Assessment Programme) is yet to take off fully. Issues about the governing body for the BNVSAP remains in question. Under the programme, cars were to be awarded star ratings based on their safety performance.

While crash test norms for new cars have been implemented since October 1, 2018 all other cars will have to be upgraded to this standard from October 1. From July 1, all cars will have to be equipped with a driver-side airbag, speed warning system, seat belt reminder and rear parking sensor.

CV Raman, Senior Executive Director (Engineering), Maruti Suzuki, said, “Seat belt reminder, airbag and ABS (anti-lock braking system) will now be made mandatory. No movement (on any of these). We have started the dialogue with the test agencies and the government. We need to have the BNVSAP in practice. Who has to be the governing body to look over BNVSAP is a question that is not clear with the government.”

Policies on scrappage and recall

Scrappage policy for old vehicles to get rid of high vehicular pollution and vehicle recall order for safeguarding the interests of the consumer were the final two policies announced by the government, but have not been implemented till date.

While the issue of providing incentives for a successful scrappage scheme has been a hot topic with the government, with neither of the departments coming forward to bear the financial burden, the call for a vehicle recall order has been in the works for past several years.

Unlike some of the developed markets -- US, Germany and UK, India does not have an official vehicle recall policy. Though a provision for it was made in the Motor Vehicle (Amendment) Bill, 2017, it never got enacted as it failed to go through the Rajya Sabha.

The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .
First Published on Jan 8, 2019 03:20 pm
Follow us on
Available On
PCI DSS Compliant