Pawan Goenka for diesel price hike but not duty hike

India's auto industry has vehemently opposed the duty hike on diesel cars because the widening gap between the price of petrol and diesel cars will not be sustainable.

In an interview with CNBC-TV18, Pawan Goenka, president, Mahindra and Mahindra, said the auto majors have always supported the view that diesel prices should go in tandem with the petrol prices but have always been against the proposal to tax diesel vehicles because the move would put their investment plans in jeopardy.

[caption id="attachment_334576" align="alignleft" width="380" caption="Goenka, President of the Automotive & Farm Equipment sectors at Mahindra & Mahindra"][/caption]

He said that the general mood amongst companies is of caution at this time. While M&M is still banking on India's growth story to continue, the cautious tone remains.

CNBC-TV18 has also learnt that there is some sort of division within the auto industry because some of the key petrol manufacturers are not very opposed to the idea of a hike being imposed on diesel cars.

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Meanwhile, Mahindra and Mahindra plans to pump in Rs 4,000 crore to set-up a plant in Tamil Nadu. The investment will be funded through internal accruals and bank loans.