Many problems arise because politicians’ pledges are observed in the breach. But sometimes bigger problems arise when they keep their promises. Road Transport Minister Nitin Gadkari kept his promise he made in September 2017—and the auto sector, indeed the entire economy, is suffering because of that.
“You may not like it, but I wish it from my heart that your growth should be less. If this growth continues, I will need to add one more lane to national highways, which will cost a whopping Rs 80,000 crore,” Gadkari told representatives of the Society of Indian Automobile Manufacturers (Siam) on September 8, 2017.
Notice the absence of manners. The event he was speaking at was organized by Siam. The objective was to discuss sustainable growth programmes for the automobile sector. Petrol and diesel vehicles would need to make way for electric powertrains and engines running on other fuel variants such as ethanol and biofuels, Gadkari thundered. “I am going to do it, whether you like it or not. I will bulldoze. Petrol diesel banaane walon kaa band-baajaa bajaanaa hai (We will take the makers of petrol/diesel engine vehicles to task).”
Also notice the level of arrogance. This was not a minister of the world’s largest democracy engaging with a major industrial sector; this was an absolute monarch haranguing and ordering his subjects to do what he wanted them to do; just do what His Royal Highness (HRH) Nitin Gadkari wants them to, for theirs not to reason why.
“Gadkari, speaking in line with the government’s larger plan to have only electric vehicles in India by 2030,” The Times Of India reported, “advised the industry to ‘innovate, research and work on new technologies’ to find alternative transport solutions. ‘Come to public transport. You can bring solutions through diversification’.”
HRH Gadkari wanted the auto industry not just to be environmentally responsible but also provide civil solutions. “There are too many cars, which is also leading to parking problems. I think the car industry should also go in for finding parking solutions, and look at an integrated approach.”
More ominously, to facilitate the use of electric vehicles, he hinted at policy changes that would severely impact the business of vehicles using conventional fuels. This caused mayhem in the Rs 4.8-lakh crore auto industry. The sector directly and indirectly employing 37 million people, contributes 7.1 per cent to India’s GDP, and almost half to the manufacturing GDP was badly hit by Gadkari’s intemperate remarks and the government’s flip-flops on electrification of transport in general. Unsurprisingly, the steep fall in the GDP growth rate has coincided with the decline in the auto sector.
Gadkari’s remarks betrayed his anti-business attitude. Evidently, he believes that the automobiles are just about fat cat industrialists and overpaid corporate bosses whose greed and insouciance were costing the environment and the nation a great deal; that their concerns could be ignored without any consequences; that these folks were unnecessary accessories to the sector, which is a machine. In short, it was the socialist attitude.
But the reality is that the auto sector, like any other, is not a machine but an organism, an ecosystem that is part of a bigger ecosystem—the national economy. And it is huge, employing millions of people directly and indirectly—a few lakhs of whom have reportedly lost their jobs because of the crisis. Gadkari really bulldozed them.
Interestingly, while Gadkari was ranting against automobiles, the Narendra Modi regime had, and has, very different ideas about the sector. The India Brand Equity Foundation (IBEF), a trust established by the government of India, proudly proclaimed at that time, “The Indian auto industry is one of the largest in the world. The industry accounts for 7.1 per cent of the country’s gross domestic product (GDP)… India is also a prominent auto exporter and has strong export growth expectations for the near future… several initiatives by the government of India and the major automobile players in the Indian market are expected to make India a leader in the 2W and Four Wheeler (4W) market in the world by 2020.”
That was then, circa September 2017. Electrification of vehicles, BS norms, and other policy changes badly hit the industry, whose half-yearly performance (April-September 2019) plummeted 17.08 per cent to 11,736,976 units—the worst ever performance. Passenger vehicle sale saw a fall of 23.56 per cent.
This was the reason that the IBEF website did file any updates after November 2018, when it said, “Indian automotive industry (including component manufacturing) is expected to reach Rs 16.16-18.18 trillion (US$ 251.4-282.8 billion) by 2026. Two-wheelers are expected to grow 9 per cent in 2018.”
This was natural, for the “IBEF’s primary objective is to promote and create international awareness of the Made in India label in markets overseas and to facilitate dissemination of knowledge of Indian products and services.” It is “a knowledge centre for global investors, international policy-makers, and world media.” You don’t report sad stories when wooing investors.
The great French philosopher Voltaire once said, “May God defend me from my friends: I can defend myself from my enemies.” Modi can also say that, for with ministers like Gadkari, the Prime Minister doesn’t need any Opposition.