The CBR had built up its case on increasing gap in demand and supply of cars and argued that the step would improve the situation and reduce burden of bookings on local industry. The ECC deferred the proposal till budget.
The finance ministry has different arguments and wanted that the government should not give leverage to commercial import by bringing down duty on cars and instead remain stick to the current duty regime even after the budget.
THE MINISTRY GIVES THREE FACTORS IN SUPPORT OF ITS ARGUMENTS: investment that is coming into this sector; boost to a number of vendors that supply parts to the local industry; and quick increase in locally produced cars.
It said that major car manufacturing companies were investing billions of rupees on expansion so that they would be in a far better position to cater to the demand of buyers in next three to four years.
The ministry referred the case of Adam Motor, a company which rolled out locally made 800 cc cars last week at very low price, and argued that Adam Motors' big leap forward in small cars manufacturing was ample proof of government policy for this sector.
The ministry said that the industry produced 100,000 cars during first nine months of the current fiscal year and, at the same pace, by June 30 it would produce another 45,000 cars.
It said that the industry supports and gives boost to more than a dozen small vendors who supply different parts to the manufacturing companies and play a role in strengthening the national economy, besides providing jobs to hundreds of thousands of families.
It strongly pleaded that the government should give reasonable time to the local industry to complete expansion for additional production and meet the demand of the buyers.