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Transport sector wheels slowing down, business declines by 28%
Economic Times, 11 Sep '19

The economic slowdown in several sectors, coupled with the monsoon effect, has caused truck movement to decline by a significant 28% this August, according to estimates by the Akhil Gujarat Truck Transporters' Association (AGTTA).

Of an estimated 9 lakh commercial vehicles operational in Gujarat, at least 250,000 are off the road, industry estimates indicate.

"Truck movement is usually lower in the monsoon. However this is usually compensated for by orders in the run-up to festival season. This year, the situation is much worse as the economic slowdown in various sectors has hit the transport sector hard. There is near-zero movement in the garments sector, which usually has a lot of movement in the run up to the festive season," said Mukesh Dave, president of AGTTA.

Apart from textiles, goods transport has gone down for other sectors, such as engineering, chemicals and agriculture as well. "During the monsoon, construction activity is slow and cement transport has also taken a hit. Transport orders have fallen even from the fast-moving consumer goods (FMCG) and consumer durables sectors," Dave added.

The worst hit is the automobile sector, transport industry players say. "Automobile sales are in low gear and this has the transport sector too. During Ganesh Chaturthi or ahead of the Navratri and Diwali season, car and two-wheeler showrooms used to stock up on vehicles anticipating more deliveries. This year, movement has come down by at least 40%. As far as my company is concerned, against some 250 truck trips last year, we have bookings for barely 120," said Nimish Patel, a transport company owner.

"The slowing automobile sector has also hit transport orders from ancillary units to manufacturing facilities," he added.

The slowdown has also affected the value added tax (VAT) collection on petrol and diesel, which dipped in August 2019 against August 2018, according to data from the state goods and services tax (SGST) department. VAT on petrol and diesel, which are non-subsumed commodities, stood at Rs 1,816 crore in August 2019, against, Rs 1,865 crore in the month last year.