If the automobile industry had a slogan it would be, “Invest in infrastructure development-led growth”. For the commercial vehicle (CV) industry, this is the only cure for its ills and there are many who feel another fiscal stimulus would be most inopportune at this time.

R Seshasayee, Managing Director, Ashok Leyland, said, “We are not looking for further fiscal sops. We need public expenditure in both social and physical infrastructure. The best thing given the current fiscal deficit would be to drive investment and therefore growth rather than simply hand out stimuli to the economy.”

His expectations from the new government therefore lean towards a greater emphasis on public transportation and pushing investment and construction in the mining sector as a start.

A key factor that determines medium and heavy vehicle sales is manufacturing growth, which declined 2.3 per cent in April compared with the same period last year. In addition, despite the overall production being down by only 18.67 per cent in April 2009, it was down by 29 per cent in March and 40 per cent in February 2008.

The infrastructure sector is then the key. Connecting cities and villages is most important and as an immediate consequence will kickstart the steel and cement industries. Seshasayee believes “the biggest democratic failing of the last government has been the total absence of importance given to the construction of roads.” Many believe this was because of the government’s reluctance to be associated with a project that was NDA’s baby.

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