New Delhi: The indecisiveness of the Central government in taking major policy decisions and escalating interest rates has restrained several multinational companies from investing in India.

The latest casualty is Hyundai which has pulled back its plans of launching diesel engine cars in India until the government does not make its stand clear on diesel prices.
 
Arvind Saxena, Director, Hyundai Motar India told Dainik Jagran, “The government policy is not clear on diesel’s retail price as it had once hinted at applying double cost system on diesel which will reduce the advantage of low cost diesel cars. Unless the government makes its stand clear, we cannot plan our strategy on diesel engine.”

The Empowered Group of Ministers (EGoM) is etching out a policy on retail price of diesel under the leadership of Finance Minister Pranab Mukherjee and is also considering possibilities of procuring entire diesel cost form the drivers.
         
At present, petrol is being sold at Rs 68.64 while diesel is sold at Rs 40.91. The big difference of Rs 28 between their costs has shot up diesel car sales in the recent months. While, petrol models of Maruti and Hyundai have registered a steep decline in demand, their diesel models have a waiting list of 5 to 6 months for delivery.

Meanwhile, the experts have claimed that abolishing subsidy on diesel will be a big blow for the automobile industry. According to an officer of the Indian Oil Corporation, if the government abolishes subsidy on diesel, the cost difference between petrol and diesel may fall to just Rs 14-15 because the oil companies after filling their loss of Rs 10 per litre will also add up their marketing and profit margins of upto Rs 3 per litre.
   
Moreover, Saxena said, “Since diesel is costlier than petrol in some nations, the Indian auto companies would have to take a carful move.”

The second largest car company in India Hyundai had planned to establish a diesel engine factory of 3 lakh capacity per year at the estimated cost of Rs 55 crores, which has now been upheld until the government’s policy decision.

JPN/Bureau