[KiloAlpha]

Originally Posted by rohanjf

Why can't they tax the diesel cars based on the ARAI certified fuel efficiency rating? For example, for every KMPL below 25, 1% extra tax on ex showroom price. This way, cars like Swift and Punto will pay a 4-5% tax (because they give 20-21 kmpl), while the cars with less efficient engines (either because they are big or come with luxury cars, or because their technology is predates the wheel) pay more.

Good idea, to use ARAI mileage numbers. Below is one way of doing it.

We first do a weighted average of the ARAI city & highway mileage numbers. For example, if highway mileage was 22 and city 14, simple average is 18 and a weighted average could be 16 (assuming more city running)
Then, we assume a reasonable annual running of 12000 km. So the amount of diesel used is 750 litres per year. Which makes it 7500 litres for 10 years.
Diesel "subsidy" is, (I don't know exact number, so lets assume) Rs.30/litre.
Therefore subsidy recovery over 10 years will be 7500 X 30 = 2.25 lakhs!

However, since this amount is being paid up front (rather than over a period of 10 years), we should discount it based on accounting principles. Being terrible at accounting, I will not try it.

[scopriobharath]

On a completely different note, Automobiles consume only 2% of diesel in the country as per studies and reports by various comittees. What would the govt benefit by plugging this 2% when they would lose so much money through the subsidy for 98% consumption (Railway, Mobile Towers Malls Etc).

If this tax is implemented, I pray that Govt must push Auto manufacturers to offer a petrol engine on all models rolled out of the Factory. Eg, there should be a Petrol XUV5OO and a Petrol Fortuner.

[AWD]

Originally Posted by BurningHeart

Hope that the "reports" are indicating that it will be levied on newly purchased cars and not the ones purchased in the last 1/2/3/4/5/10 years

Does the news article talk of "retrospective levy"? For new cars its understandable but retrospective levy, that would be catastrophic!

After significant rise in petrol price this time, some action in the diesel space is quite anticipated.

[nixie89]

Difficult to understand why they need to complicate it so much....why cant they put their brains on making the basics right.

I do advocate the idea to de-regulate the prices on fuel and subsidise essential commodities upfront. For ex : Disburse loans to farmers at cheaper rates, rebate income tax for lower income group, increase tax on cigarettes and alcohol, etc etc etc.

There are many ways to collect revenue from appropriate sources.

[sgiitk]

Right now we have a Govt of paupers, trying to make the nation a pauper. They want every paisa from wherever they can get to fund the elections (themselves in reality) through MNREGA, NRHM and soon FSB. Mani Shanker Iyer's rant on Premji is part of that. What they are forgetting is that they will end up with $1=Rs.100, 30% Inflation, and mass bankruptcies. But by then they will be enjoying life in Costa del Sin.

[mayankjha1806]

This gentleman has been on this trail for quiet some time now, every time he has made any/some noise somehow someone has kept him quiet, this time again there is some noise. Someday he might have his way, until then one should enjoy the Diesel cars.

The problem has been this government has no fresh ideas as to how to fix problems, economic bad situations will come and go, but the government needs to respond to it, now sit helpless and still rule the country.

Doing it retrospective is impossible, so if you have already bought a Diesel then chill, but new buyers feel jittery and the long wait list of some popular models isn't helping either.

[samarjitdhar]

Originally Posted by sgiitk

Right now we have a Govt of paupers, trying to make the nation a pauper. They want every paisa from wherever they can get to fund the elections (themselves in reality) through MNREGA, NRHM and soon FSB. Mani Shanker Iyer's rant on Premji is part of that. What they are forgetting is that they will end up with $1=Rs.100, 30% Inflation, and mass bankruptcies.

Reminds me of the British when just before leaving India, they looted and plundered whatever they could and took them away in their ships. Hopefully saner minds will come together soon and put this pathetic excuse of a government out of its misery. Need a new government of technocrats ASAP to salvage the situation.

Originally Posted by sgiitk

But by then they will be enjoying life in Costa del Sin.

Totally question but is this in Italy?

[Maverick1977]

The current Govt. seems to be hell bent on ruining the auto industry. First they banned all kinds of car films and have put the film manufacturers almost out of business (or at least slowed them down considerably). Now the Govt has decided to target the Diesel market.
In the current scenario its only the small/mid segment car buyers are going to be squashed. Cars bought on company names will have hardly any impact since the depreciation values will off set the costs.
The Govt should call for a general vote from the public on this & also ensure that this will be applicable only if the Public Transport System is properly in place. Its the later that will really dissuade people from not driving, simply increasing fuel costs are not going to make people not drive. At the max they might drive less or join a car pool.

[veyron_head]

If this proposal does go through, I can sell my Swift diesel that I bought for 6 lacs, mothered 50k or more miles over a period of 3 or 4 years, for the same 6 lacs in the Used car market. Bravo!

[arrowaby]

Rs. 2.5 lakhs is not a joke.

Its like increasing the cost by one Basic Maruti Alto.

Increasing costs just makes everything unaffordable eventually. Driving issoon going to become a thing of the past if such archaic policies exist.

Moreover, this is such an irritating situation for the Auto companies who have invested Millions of Dollars for setting up Diesel Engine platforms.

Honda was in a soup after falling sales due to petrol hike and this in turn spurned a hike in Auto sales. Companies are now investing in Diesel platforms and now in the wake of the present announcement millions worth of FDI is in the stake.

Already S&P has downgraded India's ratings which the government has selectively chosen to ignore conveniently. Our currency is not even worth the paper on which it is printed.

[reswaran]

I guess my M800 has to labor on for the rest of its life and mine. I have no hope to buy a small/mid size diesel if this is implemented.

[PatienceWins]

It seems this will not happen as per the news.

Fin Min not in favour of excise duty hike on diesel cars - CNBC-TV18 -

[BurningHeart]

My only issue with the finance ministry has been that it had done very little to cover up the fiscal deficit by expanding the tax base. All that they do is to penetrate deep into pockets where there is clean data such as employed class, people with home(s), people with diesel car(s), people with expenditure overseas when they travel, people who get "fringe benefits". Businessmen and self-employed ones go scot-free, in comparison to the ordeal "the catalogued" ones like the ones identified above.

I am not an macro-economist but this is the one of the key reasons why despite all of the GDP growth in the past 10 years in the country, the fiscal deficit has only grown wider. And absolutely nothing gets done, because in this country the "uncatalogued ones" call the shots.

BH.

[rajivanoj]

This is bad move from government, this is one of worst government, instead of plugging holes by going against corruption, they tend to suck till the last drop pf blood from peoples. This is 100% mismanaged country with so called leaders as of now. Though most ministers, are highly educated, i wonder, they only use their education for their own luxury. not thinking about country and the sufferers.

[ecenandu]

Here we go AGAIN, I don't think the government will impose a flat duty on diesel cars. If they do want to implement, it has to be a percentage on the ex-showroom price of the vehicle. Say 10%, or something similar. This flat rate is totally ridiculous.

I am sure this news will stay as rumor itself.