When Will We Ever Hit the Nail on the Head?
JUST WHEN THINGS WERE LOOKING UP FOR THE AUTOMOBILE INDUSTRY, THE
proposed Finance Bill has come and delivered a fresh setback. India is full of cesses and surcharges (which are never rolled back) and the recent Union Budget has the effect of making cars more expensive. The new cess has been imposed on both petrol and diesel cars albeit at different rates. Hybrid cars needed much more encouragement than merely being exempt from cess. Half the price of a car (or more) now constitutes taxes.
The fuel policy of the government is also far from clear and works like a yo-yo. The government reduces the excise duty on petrol and the State-owned oil companies raise petrol prices. The petrol/diesel price difference is now down to about Rs 10, but is this a studied decision or merely the result of adhocism?
The final nail in the coffin comes in the form of the latest Euro 6 regulations that have been notifi ed. The proposed norms are a far cry from the original Euro 6 norms. Pray, how does a capital-intensive industry like automobiles plan in such an environment?
The Supreme Court has by an order banned the sale of cars with diesel engines exceeding
2,000 cc that are fuel-efficient. At the same time, however, one can buy a V8 petrol-guzzling car or an SUV that pollutes more than a fuel-efficient diesel car/SUV with a 2.4 or 3.0 diesel engine.
Even with so much emphasis on pollution, the recent Union Budget did nothing to encourage hybrid cars and technology. Hybrid cars should be given a tax benefit so that manufacturers can invest in the technology and make it affordable to more and more people. As the numbers and scale increase, the cost comes down.
The sub-four-metre rule is something that the government needs to look into, for it is a rule specific only to India. Nowhere else in the world will you see sub-four-metre sedans. This compels the manufacturers to make India-specific cars. They then compromise on safety in order to keep the cost down. It is high time fuel efficiency, low tail-pipe emission, good technology and safety got tax benefits rather than a sub-four-metre car.
EDITOR – ASPI BHATHENA
