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Old 24th March 2011, 10:32   #46
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Default Re: 25% additional tax on diesel vehicles in Delhi

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Originally Posted by sbkumar View Post
Why only diesel cars? Why not all cars? As Mustang said, it's not that only diesel cars pollute. Anyway, the diesel cars cost more over petrol cars and there by get more in taxes to the govt. I don't see any rationale behind such arbitrary increases.
I don't care much about who pollutes more. Higher taxes on diesel cars would result in lesser diesel cars being sold, which will in turn result in lesser subsidized diesel being consumed by diesel cars, which would in turn result in lesser burden to the government. Now, isn't that a good thing? In the current scenario, the govt is footing a part the fuel bill of these diesel cars.
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Old 24th March 2011, 10:52   #47
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Default Re: 25% additional tax on diesel vehicles in Delhi

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Originally Posted by civic-sense View Post
I don't care much about who pollutes more. Higher taxes on diesel cars would result in lesser diesel cars being sold, which will in turn result in lesser subsidized diesel being consumed by diesel cars, which would in turn result in lesser burden to the government. Now, isn't that a good thing? In the current scenario, the govt is footing a part the fuel bill of these diesel cars.
I do get your point on saving the subsidies. Unless we have a mechanism ( I don't think practically it is possible though) to charge based on the actual usage, it doesn't sound fair. It would just tip the scales in favor of petrol cars in the extreme scenario ( 25% increase would not do that IMO). These changes are just populist and cosmetic and not a systemic solution for the problems of energy security and environmental health.
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Old 24th March 2011, 10:55   #48
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Default Re: 25% additional tax on diesel vehicles in Delhi

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Originally Posted by Mustang.101 View Post
Older diesel engines - Yes
Newer diesel engines - Mostly NO, read my post above this one, search for the word. "econetic" on this page and read it.

Diesels mainly release more particulate matter which is responsible for coughing, sneezing and a few respiratory diseases but it is better than petrol to save the environment as a whole. Also causes less global warming. I am talking about newer diesel engines though.
I am sorry. I don't know why you consider diesel SPM less dangerous than CO2. One way to counter CO2 is increasing green cover. What do you do about SPM?

And government (Delhi) might have given some excuse for the increase but if one needs to get more money in, they do it on stuff which is selling like hot cakes (diesel cars/SUVs). What's wrong with that?

And is this econetic engine present in India? I don't think so unless I am very mistaken. So why bother discussing that.


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Originally Posted by civic-sense View Post
I don't care much about who pollutes more. Higher taxes on diesel cars would result in lesser diesel cars being sold, which will in turn result in lesser subsidized diesel being consumed by diesel cars, which would in turn result in lesser burden to the government. Now, isn't that a good thing? In the current scenario, the govt is footing a part the fuel bill of these diesel cars.
I agree. I don't like the fact the subsidies (fuel or anything else) are being provided to those who don't need it.

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Originally Posted by sbkumar View Post
I do get your point on saving the subsidies. Unless we have a mechanism ( I don't think practically it is possible though) to charge based on the actual usage, it doesn't sound fair. It would just tip the scales in favor of petrol cars in the extreme scenario ( 25% increase would not do that IMO). These changes are just populist and cosmetic and not a systemic solution for the problems of energy security and environmental health.
One possible way to do it might be that all major cities and their sub-urbs do not get subsidized fuels at all. e.g. Diesel/petrol with 0(zero) subsidy in entire NCR region. Of course I am assuming not much farming is present in this region ( I haven't seen any) and people won't travel 50 kms to get cheaper fuel everytime. I guess if implemented in all major cities that might reduce the subsidy burden significantly.

Last edited by asr245 : 24th March 2011 at 11:02.
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Old 24th March 2011, 11:18   #49
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Default Re: 25% additional tax on diesel vehicles in Delhi

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Originally Posted by hemanth.anand View Post
for me this is a good news.
This will ensure that the subsidy is helpful only to the group of people whom it was intended to in the first place-Mainly the agricultural community.
I would like this to be extended all over the country.
Has the government circulation already come out?
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Originally Posted by JJames View Post
This move to impose an additional tax on Diesel cars is most welcoming and in my view, one of the more sensible taxation in recent times (stark contrast to the now cancelled plans of hospitalization tax). Diesel, the more polluting of fuels, is subsidized in India with an objective towards 'essential' services & requirements mainly at the agricultural & goods transportation sectors. In a recent survey, it was found that a major chunk of Diesel fuel usage is taken up by private vehicles (including luxury cars). Clearly, the objective of the subsidy is defeated, with more & more public opting for Diesel engines (as exemplified by the recent surge in sales of Diesel cars such as Vento D vs Vento P/ ANHC). The Govt cannot directly increase the fuel price impacting these sectors because it would adversely impact inflation. The better option for the Government is to somehow recover the subsidy money from the people who do not deserve that subsidy in the first place. This means, adding an extra amount of tax on the cars that use this subsidized fuel! Simple & makes perfect sense .

On a personal note, if I am to buy a diesel car, I would much prefer paying this tax than carry the guilt of using up a state subsidy not intended for me.
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I would like to see this tax being imposed all over the country than at single place which become tokenism
110%. Subsidized diesel was never intended to be taken advantage of premium and luxury car buyers. Steps have to be taken to stop this misuse of tax payers money.

Do keep in mind every time an Aam admi takes his HH splendor, his maruti 800, his tata nano to the pumps to fill up with petrol and paying Rs 60+/ltr, part of that money is used to subsidize diesel fuel. And for that subsidized fuel to be then used by people able to spend RS 12 lakh+ on a vehicle just does not make sense what so ever to me.

An appropriate solution has to be found to this complex problem, and this increase in taxes may not be the best option but i guess it is the next best option.

Try petrol cars, they are great fun to drive
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Old 24th March 2011, 11:20   #50
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Default Re: 25% additional tax on diesel vehicles in Delhi

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Originally Posted by asr245 View Post
And is this econetic engine present in India? I don't think so unless I am very mistaken. So why bother discussing that.
Green cover does not increase in a day, It takes years and plus we need to obviously cut more trees to accommodate the ever increasing population.

The Econetic engine is not present and will never be present in India because the government will never make it tax free, That was the whole point of introducing it in the UK, To make it tax free and there by save the environment and also make profit. So better get your facts right in that respect.

As far as SPM Vs. CO/CO2 goes:

Would you rather like to live with a chance of getting a minor respiratory disease or would you prefer to not live at all due to global warming?
Cities like Mumbai, London, New York all sinking, This situation is not far away, Go ask the English government, how many billion pounds they are spending on this every year.
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Old 24th March 2011, 11:31   #51
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Default Re: 25% additional tax on diesel vehicles in Delhi

4000-6000 Rs increase for something like a FIGO or a swift seems reasonable to me. The amount of subsidy a figo owner gets is approximately 1.5 rs. If he runs 50000 km over a period of 5 years he will consume about 3000 litres of diesel. 3000 * 1.5 is 4500. So seems like a reasonable amount to me.

What the govt should also do is tax according to the FE of vehicles(for both petrol and diesel). For eg Vehicles having ARAI FE above 18 can have say 10% tax and less than 18 have 15% tax, less than 15 should have 20% and so on.

Last edited by vishnurp99 : 24th March 2011 at 11:32.
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Old 24th March 2011, 11:45   #52
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As many have pointed out modern diesels don't pollute the atmosphere as much as older ones and they are equal to petrol engines in damaging the eco-balance, but what you are missing is the big picture.
If you take X amount of diesel and X amount of petrol the harm caused maybe the same, but here there is a huge imbalance caused due to usage levels.
An average car running on diesel clocks almost 4X miles more than a petrol one which makes the equation a highly imbalanced one.
That's why a Rolls Royce is considered less polluting even if it returns just 4km/lt, because they never clock 1lakh kms in 5 years, like how commuter cars do.

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Originally Posted by vishnurp99 View Post
What the govt should also do is tax according to the FE of vehicles(for both petrol and diesel). For eg Vehicles having ARAI FE above 18 can have say 10% tax and less than 18 have 15% tax, less than 15 should have 20% and so on.
That will not work because more FE means people will drive more and overall pollution will still be the same or even more.
Classic example is the telephone call rates. Today you call at 50p/ min.
What is the result? More usage
Solution for pollution to decrease lies elsewhere.

Last edited by aah78 : 24th March 2011 at 23:08. Reason: Posts merged.
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Old 24th March 2011, 12:16   #53
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Default Re: 25% additional tax on diesel vehicles in Delhi

Why only Delhi, I think its done by state govt because of either pollution or some other reason. It can't be because of subsidy on diesel, taxing only Delhi diesel buyers wont solve the IOC,HP,BP woes. If its the Kirit parikh recommendation is being considered here then it doesn't make sense if its only implemented for Delhi.

Rest all options mentioned here are too hard to implement. But Kirit Parikh recommendation is the best in the given scenarios, you should tax the diesel usage for private use by charging upfront from the diesel car buyers who buy for personal use.
That way instead of deregulating diesel they can still control inflation to some extent. Now with deregulation of diesel which doesn't seem to happen thou, is infact may not be implemented so its actually back to square one for the oil companies, still bleeding everyday because of subsidies.

And lets not forget subsidies is not only diesel its kerosene and LPG too. Obviously they can't deregulate everything now. So if Diesel car buyers are asked to pay more tax then it makes more sense, basically the cost advantage gained due to low price of diesel should be captured, that way demand for diesel will eventually come down as people move to cleaner fuels or petrol and at the same time live with some amount of lower inflation with regulated diesel.

Last edited by samsan02 : 24th March 2011 at 12:17.
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Old 24th March 2011, 12:42   #54
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Default Re: 25% additional tax on diesel vehicles in Delhi

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Originally Posted by Mustang.101 View Post
Green cover does not increase in a day, It takes years and plus we need to obviously cut more trees to accommodate the ever increasing population.

The Econetic engine is not present and will never be present in India because the government will never make it tax free, That was the whole point of introducing it in the UK, To make it tax free and there by save the environment and also make profit. So better get your facts right in that respect.
And introducing tax-free cars for econetic engines will improve things from day 1? At best it will take years. I think increasing green cover and improving public transport would be better.


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Originally Posted by Mustang.101 View Post
As far as SPM Vs. CO/CO2 goes:

Would you rather like to live with a chance of getting a minor respiratory disease or would you prefer to not live at all due to global warming?
Cities like Mumbai, London, New York all sinking, This situation is not far away, Go ask the English government, how many billion pounds they are spending on this every year.
I would try to increase green cover so that the situation (of sinking cities) never arises. And whoever said of minor respiratory disease? Sulphur content of diesel in India is about 350ppm (that too of ULSD) compared to < 50ppm (or was it 15ppm) in Western countries. AFAIK, SO is considered dangerous enough to cause respiratory disease on the lesser damaging side of things.

Maybe if they get it equivalent to western countries, things might change. Till then I am pro-petrol.

BTW, I am quite sure considering the cost of diesel and better mileage it gives, people tend to drive more just for the heck of it. There goes your theory of less CO2 up in smoke.

PS: Just to be clear, I do think that government should provide tax-breaks for more efficient engines (diesel or petrol). But I guess that collides with the economics of giving tax-breaks to an imported (fossil fuel burning) engine Vs local manufacturing. (?)

Last edited by asr245 : 24th March 2011 at 12:51.
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Old 24th March 2011, 12:55   #55
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Default Re: 25% additional tax on diesel vehicles in Delhi

I don't agree with the point that taxing lesser FE cars more will cause people to run their cars more. People will run their cars for their needs. What taxing cars with lower FE wil do is it will incentivise the car makers and public to come up with better cars with better FE.
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Old 24th March 2011, 13:06   #56
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Default Re: 25% additional tax on diesel vehicles in Delhi

Firstly - This increase is only on the Registration&Road Tax charges on diesel vehicles and not as the topic of this thread suggests. Vehicles registered in Bangalore, chennai already pay more road tax compared to this irrespective of the kind of fuel used.
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Old 24th March 2011, 13:07   #57
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Default Re: 25% additional tax on diesel vehicles in Delhi

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Originally Posted by asr245 View Post
BTW, I am quite sure considering the cost of diesel and better mileage it gives, people tend to drive more just for the heck of it. There goes your theory of less CO2 up in smoke.

PS: Just to be clear, I do think that government should provide tax-breaks for more efficient engines (diesel or petrol). But I guess that collides with the economics of giving tax-breaks to an imported (fossil fuel burning) engine Vs local manufacturing. (?)
Then they should just increase the cost of diesel for private cars. I am always of the opinion that for private cars, diesel and petrol should cost the same per liter and then let the people decide which engine they want.

If the 1.6 TDCi can be produced in India (Going to start soon) then the 1.6 TDCi Econetic can also be produced with ease.

My point was that it is not fair to classify all vehicles and their variants as equals.
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Old 24th March 2011, 14:00   #58
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Default Re: 25% additional tax on diesel vehicles in Delhi

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Originally Posted by Mustang.101 View Post
Then they should just increase the cost of diesel for private cars. I am always of the opinion that for private cars, diesel and petrol should cost the same per liter and then let the people decide which engine they want.

If the 1.6 TDCi can be produced in India (Going to start soon) then the 1.6 TDCi Econetic can also be produced with ease.

My point was that it is not fair to classify all vehicles and their variants as equals.
It translates to private cars only if it's Delhi. Taxis and autos run on CNG here so doesn't affect them. Cabs run by private operators (for call centers etc) shouldn't benefit from diesel subsidy either.
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Old 25th March 2011, 09:06   #59
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Default Re: 25% additional tax on diesel vehicles in Delhi

At one time all the cars in my garage were petrol. Now all of them are diesels. When i go to the pumps i kind of feel guilty to pay less for the luxury transport that i have, compared to the two wheeler guys. Though it's easy on the pocket and i am happy during refills, what i am doing is not necessarily right.

Diesel needs to be taxed more during purchase of vehicle It is the simplest way to make car owners pay for their comfort without affecting the poor.

Diesel car owners should pay a biannual tax rather than a one time life tax. the biannual tax should be proportional to the amount of subsidy on the diesel at that time.

This would make diesel cars less attractive than it is now and the steep favour that diesel cars enjoy both by manufacturers and consumers would be offset. This means that petrol related technology and FE centric technology like hybrid, microhybrid, CNG, blue motion which currently are hardly existent in india would rise and shine since manufacturers can't take to the easy job of plonking in a diesel engine to provide cheaper running costs.

The government for it's part should improve public transportation. The infrastructure is already there, just the quality of service needs to be improved, probably with private partnership. alternate fuel stations (CNG) should become prevalent.

That would be a fair world
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Old 25th March 2011, 09:37   #60
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Default Re: 25% additional tax on diesel vehicles in Delhi

appreciate your idealism but in India there's never going to be a 'fair world'.
there are always going to be those that are more equal than the rest of us - like bureaucrats and politicians for example, whose consumption of petrol and diesel in normal daily life far exceeds the consumption of the average man. During election rallying and campaigning, the mind boggles to think how much fuel these chaps consume! All this is paid for by our taxes and levies!
Its all very well to say tax the diesel car owners more and so on.
there is another thread on this forum which speaks about the 'unreasonable' premium that manufacturers charge for diesel cars in the first place. My submission is that higher basic acquisition costs automatically mean that anyway one pays a higher tax amount when one buys a diesel vehicle.
Perhaps creating a parity between Diesel and Petrol in terms of pricing may be one answer. And using differentiating dyes to help distinguish between normal diesel meant for standard consumers and special diesel meant for agri purposes would probably help. But the trick is not in making the rules - it is in enforcing the same! This is always going to be a challenge in an indisciplined society like ours.
Thats where we fail miserably so I submit that all this theorizing is only going to be as good as its execution.
End of the day, we in India do pay large amounts of taxes , income taxes, vat, service taxes etc. In return, what have we been getting for the last 60 odd years?
There are no proper public welfare systems in place, despite the passage of time. Only promises from the netas keep coming at us, fast and furious.
If we can ensure greater accountability of public moneys, then it would be fair to start implementing some of these idealistic notions.
Until then, I am afraid that many of us will have to be excused for trying to save something from the wreck!
Dont get me wrong - I would like to support whats right. But the cancerous rot of corruption and scams in our country has gone so very deep that you will have to excuse me for being disgusted with the system!
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That would be a fair world
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