oppn parties Uber, Ola And Economic Recession

News Snippets

  • ED has issued a showcause notice to Xiaomi India, two of its senior officials and three foreign banks for FEMA violations to the tune of Rs 5551cr
  • India's South-West coast to be hit by very severe Cyclone Biparjoy which will intensify in the next 36 hours
  • PM Modi pays tributes to Birsa Munda on his death anniversary
  • CBI forms SIT to probe violence in Manipur
  • Coal mine collapses in Dhanbad, three dead and scores feared trapped
  • Death threats for Sharad Pawar & Sanjay Raut, probe ordered and security tightened
  • Akhilesh Yadav says law & order situation is out of control in UP
  • Diesel (8.22 million tonnes), petrol (3.35 million tonnes) consumption hits a new high in May
  • Congress' Kamal Nath Sandesh Yatra will begin in Madhya Pradesh on June 15
  • Congress rubbishes reports of Sachin Pilot starting a new outfit, says they are just rumours
  • Delhi Police take women wrestler who had complained against WFI chief B B S Singh to federation office
  • IT minister Rajeev Chandrasekhar says government will regulate the AI space to keep digital citizens safe
  • Stocks turn negative on Friday: Sensex loses 223 points to 62625 and Nifty 71 points to 18563
  • WTC final: If India can keep the Aussie lead to below 400, they can still make a match of it
  • WTC final: Indian bowlers get their act right in the second innings but Aussies race to a lead of nearly 300 for the loss of 4 wickets
Fresh flare-up in Manipur as 3 persons were shot dead in a Kuki village inKangpopki district
oppn parties
Uber, Ola And Economic Recession

By Linus Garg

About the Author

Sunil Garodia Linus tackles things head-on. He takes sides in his analysis and it fits excellently with our editorial policy. No 'maybe's' and 'allegedly' for him, only things in black and white.

Finance Minister Nirmala Sitharaman has said that the auto industry is suffering low sales as millennials prefer to ride on Uber and Ola instead of owning cars to avoid the hassle of driving and looking for parking slots. This is once again a classic example of a government not willing to acknowledge a problem and looking for excuses to explain the slowdown in the economy.

Sitharaman should know that preference for riding on Uber and Ola can be one of the minor reasons but can never be one of the main reasons for the precarious position the auto industry finds itself in. On the other hand, car sales are being driven by Ola and Uber because as demand rises for such rides, people are investing in cars to run them on the app-based platforms.

Further, it is not only the sales of cars that have plummeted. Demand has fallen across the board for all kinds of vehicles, including two-wheelers and commercial vehicles. App-based platforms cannot be held responsible for that. It is lack of manufacturing activity and falling profitability for businessmen and lack of jobs and no rise in salaries for the salaried-class that is preventing them from investing in acquiring new assets.

The finance minister must be aware that auto sales have been going down for 10 straight months now. She must also be aware that GDP growth rate is going down, companies are reporting lower sales in their quarterly results, manufacturing has contracted for the last few months and credit off-take has slowed down to a trickle. All this taken together shows that the economy is in recession.

Hence, instead of looking for excuses or responding in knee-jerk fashion, the finance minister should apply her mind and think of structural reforms. She should find the money to invest in infrastructure to perk up demand. The government must not sleep on the matter and instead must tackle it on a war footing.