29 Oct, 2015 10:40p.m.

Automobile industry waiting for Seventh Pay Commission report

India’s automobile sector is keenly awaiting the recommendations of the Seventh Pay Commission in the hope that government employees will flock to showrooms with their pockets loaded with cash.

Yet, what may still go against the industry is if the Pay Commission’s recommendations are implemented as soon as the report is submitted. This will mean that the implementation may not have any retrospective impact, unlike in the past, and that will lead to less or no lump sum amount as arrears in the accounts of government employees, which in turn may not have the desired impact on auto sales.

However, a historical analysis of auto sales shows that arrears and pay hikes of government employees have led to immediate spike in the purchase of two-wheelers and passenger vehicles in the country.




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