GST 2.0 helped economy weather West Asia crisis: Maruti Suzuki India chairman

New Delhi, Aug 31 (AHN) Maruti Suzuki India chairman RC Bhargava said on Monday that GST 2.0 reforms rolled out by the government have given “a new impetus not only to the automobile industry but to several sectors of the economy,” leading to robust growth despite the adverse impact of the West Asia crisis.

Addressing shareholders at the company's annual general meeting, Bhargava said India’s car industry would grow to 6.3 million by 2031, with the share of the small car market growing significantly faster than it did in the previous five years, on the back of GST rate cuts announced in September last year.

He said the Indian economy continues to do well, and collections of GST remain higher than ever before despite the adverse impact of the West Asia war.

“I do believe that without GST reforms, we may not have done so well in the difficult months that have elapsed," Bhargava remarked.

He thanked Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and all other members of the government for what he termed as a “historical reform."

"The reform has shown what a big difference it can make to the economy, and I would urge state governments and the central government to proceed faster on the road to reform, continue to make doing business easier, use more technology, as it has been shown that it reduces corruption and delays," he said.

"The faster wealth is created, the faster government revenues will grow, and if the government programs continue as they are going, there will be much more equitable growth in the country," he added.

Bhargava pointed out that reforms help increase competitiveness of the Indian economy, which brings about more employment generation because of larger economic activity.

Maruti Suzuki estimates that the car industry will grow to 6.1 million to 6.3 million by 2031 and the company continues to expand its production capacity to meet the expected growth in demand. The company’s installed capacity would reach 2.9 million units at the end of 2026-27, and 3.65 million units at the end of 2030-31, he added.

“We are doing all this expansion because our economy has a huge potential for growth," Bhargava observed.

Maruti Suzuki has raised its capital expenditure plan to Rs 77,500 crore for the next five year till FY31 to expand operations.

Managing Director and CEO Hisashi Takeuchi said, "Regarding the capex side for FY26-27, we have planned a 40 per cent jump in capex expenditure in a single year, from around Rs 10,000 crore last year to Rs 14,000 crore this year. Cumulatively, during FY26-27 to FY30-31, we have planned a capex of Rs 77,500 crore," Takeuchi informed the shareholders.

Maruti Suzuki India has already commissioned two lines at its Kharkhoda plant in Haryana, and work is progressing on the third line.

"A fourth line of 2.5 lakh units capacity was commissioned in Hansalpur in Gujarat, raising total capacity to 1 million. This is Suzuki's largest plant anywhere in the world," Bhargava said.

Work has also started at the new site at Sanand in Gujarat, and it is intended to install a total capacity of 1 million units there. The proposed investment in Sanand is about Rs 35,000 crore.