The automobile industry in India is undergoing a crippling slump with nearly all manufacturers reporting a slowdown in sales and job losses due to subdued consumer sentiment amid an economic slowdown.
Finance Minister Nirmala Sitharaman on Friday slashed the effective corporate tax rates to 25.17 per cent (inclusive of all cess and surcharges) from 30 per cent for all domestic companies.
The government led by Prime Minister Narendra Modi has unveiled various measures to arrest the falling growth -- from rolling back of higher tax surcharge for foreign investors to mega reforms in the public sector banking space.
To stabilise flow of funds into the capital market, the enhanced surcharge introduced by the Union Budget will not apply on capital gains arising on sale of equity share in a company or a unit of an equity oriented fund or a unit of a business trust liable for securities transaction tax.
The other prominent winners were IndusInd Bank, Bajaj Finance, State Bank of India, UltraTech Cement and Titan. All of them saw gains ranging between 8.7 to 10.7 per cent each.
On Tuesday, Sitharaman, at a press conference, had said: "The automobile and components industry has been affected by BS6 and the mindsets of millennial, who now prefer to have Ola and Uber rather than committing to buying an automobile."
On Tuesday, Finance Minister Nirmala Sitharaman had stated that the mindsets of millennial were adversely affecting the automobile industry as they prefer to use radio taxi services instead of buying own vehicle.
The Shanghai Composite Index added 0.45 per cent while MSCI's index of Asia-Pacific shares outside Japan gained 0.5 per cent. But sentiment in the wider region remained subdued amid worries about a global recession.
Among the other prominent losers were Tata Steel, ICICI Bank, UltraTech Cement, Titan, Indian Oil Corporation and Tata Motos which lost between 4 and 4.5 per cent each. Heavyweight Reliance Industries plunged by 3.8 per cent while Jindal Steel lost by 3.6 per cent.
Ahead of Sitharaman’s assurance to bank employees, former Prime Minister Manmohan Singh said the state of the economy was deeply worrying and insisted that last quarter’s GDP growth rate of 5% signals that the country is in the midst of a prolonged slowdown.