[tj123]

Only way to go about is gradually announce a phase wise subsidy removal and subsequently reduce the ridicules amount of taxes levied on fuel. By announcing a clear long term policy vehicle manufactures will be able to plan better and bring in vehicles aligned to the policy. Implementing policy changes will be hard initially but someday a call needs to be taken, government cannot just duck this without an answer.
As elections are coming near the present government do not want to take a hard stance as they don’t want to lose votes if they announce a policy the opposition will jump and shout on top and make it a poll issue to stir up passion to garner votes in their favor.
I see no will in the currently politicians/ bureaucrats who can stand up for a real cause and bring the change, everyone is busy filling up there coffers prior to the next elections.

[wildsdi5530]

@apachelongbow: If we consider your statement in #430, add private car owners also to the equation along with Gensets, Who's left to use the diesel.
Let's say that the govt converts all trucks and buses to CNG and puts up an offer to exchange your old diesel car for a petrol car from a higher segment, and provides uninterrupted electricity to all, will not the market for diesel collapse?
Isn't a more rational solution to pay ere ye wend?

I was reading the editorial in today's 'Times of India' by Dr. Parikh where he states that an average SUV user drives 25,000 km per year. Assuming 250 working days, he would drive 100 km per day. At an average speed of 40kmh, that would mean your average SUV user spends 2 1/2 hours on commuting every day. Now I find that very hard to believe.

[kumar2007]

Originally Posted by ku69rd

Folks,
Do not think the transport sector is misusing/abusing diesel. The real problem lies elsewhere, diesel is used in variety of industries these days. We have Telecom Sectors using diesel to run their signal stations and making a big killing out of it. Entertainment sector using it for their late night jigs, construction industry. How do we realistically put a cap on such uses where diesel is exploited for commercial purposes.

This is where all governments irrespective of party affiliations will be finding it hard to chew.

That's not 'misuse'. It's because the govt is not able to provide enough power.

[SAS]

Originally Posted by SedatedDrive

First, I am against subsidy. Now to answer your question - to keep transportation cost of essential goods low. Because, as much as we like to think we are a mixed economy, everyone in the supply chain behaves like a capitalist and passes on additional costs to the customer.

That's not true. It is just an "excuse" by the government. If the govt really cared about the common man and wanted to keep transportation costs low, they would not put such ridiculous levels of tolls on the highways. Also they would improve the conditions on roads and infrastructure and increase railway cargo carrying capacity if they really wanted to keep the transportation costs for essential commodities cheap..It's just an excuse, not the true intent.

I feel that diesel prices shall not be increased, the government shall keep it low. Also I doubt the government shall increase the taxes on diesel cars. There is huge lobbying from Mahindra and Tata not to introduce such a tax, hence I doubt the excise shall come in. Petrol shall continue to be expensive and people who buy petrol cars now are really making a decision they shall regret. Buy a diesel vehicle, the government doesn't have the stomach to increase diesel prices....

[suhaas307]

Originally Posted by SAS

people who buy petrol cars now are really making a decision they shall regret.

This will apply to those who cover a lot of distance on a regular basis. For someone who is interested in a car that they intend to keep for a while, drive it only in the city and don't exceed 500 km a month, a petrol car will still make sense.

Remember, diesel cars not only cost a whole lot more than their petrol-run counterparts, they're more expensive to maintain (service) too.

Also, let's not forget that diesel is NOT the future. I'd mentioned this somewhere else. It's only a matter of time before the Govt. wakes up and smells the coffee and the noxious diesel-fumes clogging millions of lungs in the country.

[torquecurve]

Originally Posted by wildsdi5530

@apachelongbow: .....

I was reading the editorial in today's 'Times of India' by Dr. Parikh where he states that an average SUV user drives 25,000 km per year. Assuming 250 working days, he would drive 100 km per day. At an average speed of 40kmh, that would mean your average SUV user spends 2 1/2 hours on commuting every day. Now I find that very hard to believe.

That is the beauty of averages. I was just watching a stand up comedian say that when Cain and Abel existed (wiki tells me they are the 3rd and 4th person to walk the earth), and one of them murdered the other, on an average you had a 33.33% chance of death by murder!

Point being, there are multiple people who drive SUV's more than 50K kms per year and then there are multiple people who might drive it 10K kms per year. On an average it will mean that most SUV owners drive about 25K kms per year!.

Even in your example you just have to add the occasional weekend drive, trip to the airport etc and that figure is believable. I being a petrol car owner have done 45000 kms of running in about 2.5 years!

Originally Posted by SAS

That's not true. It is just an "excuse" by the government. If the govt really cared about the common man and wanted to keep transportation costs low, they would not put such ridiculous levels of tolls on the highways. Also they would improve the conditions on roads and infrastructure and increase railway cargo carrying capacity if they really wanted to keep the transportation costs for essential commodities cheap..It's just an excuse, not the true intent.

I feel that diesel prices shall not be increased, the government shall keep it low. Also I doubt the government shall increase the taxes on diesel cars. There is huge lobbying from Mahindra and Tata not to introduce such a tax, hence I doubt the excise shall come in. Petrol shall continue to be expensive and people who buy petrol cars now are really making a decision they shall regret. Buy a diesel vehicle, the government doesn't have the stomach to increase diesel prices....

Instead of a tax a cess (on the lines of Education Cess) can be charged for every car by the RTO and should go to a "Subsidy Fund". It should apply to all privately owned Diesel vehicles and should be based on Vehicle type, age, engine cap and ARAI certified FE.

After all, why should I, a honest tax paying citizen of this country pay to fill up others tanks? (Disclaimer: I don't mean to say diesel car owners are dishonest)

[apachelongbow]

Originally Posted by wildsdi5530

@apachelongbow: If we consider your statement in #430, add private car owners also to the equation along with Gensets, Who's left to use the diesel.
Let's say that the govt converts all trucks and buses to CNG and puts up an offer to exchange your old diesel car for a petrol car from a higher segment, and provides uninterrupted electricity to all, will not the market for diesel collapse?
Isn't a more rational solution to pay ere ye wend?

I was reading the editorial in today's 'Times of India' by Dr. Parikh where he states that an average SUV user drives 25,000 km per year. Assuming 250 working days, he would drive 100 km per day. At an average speed of 40kmh, that would mean your average SUV user spends 2 1/2 hours on commuting every day. Now I find that very hard to believe.

Good, let the diesel market collapse. Let only CNG rule. After all CNG is abundant and cheaper and we dont cross subsidize terrorist nations via oil bill. Killing two birds with one stone here!
Regarding SUVs , sorry oh great govt of India, first improve your sorry excuses of roads, people will automatically migrate to fuel efficiant sedans!!

[carboy]

Originally Posted by torquecurve

Instead of a tax a cess (on the lines of Education Cess) can be charged for every car by the RTO and should go to a "Subsidy Fund". It should apply to all privately owned Diesel vehicles and should be based on Vehicle type, age, engine cap and ARAI certified FE.

I thought cess is just another word for tax. What's the difference between what you propose and a tax on diesel vehicles?

[torquecurve]

Originally Posted by carboy

I thought cess is just another word for tax. What's the difference between what you propose and a tax on diesel vehicles?

Cess is a charge on the tax charged and not a tax itself. It is a percentage of the tax to be paid. Also, a cess can be temporary in nature and will go to a specific fund. (e.g. education cess charged on income tax). The government can set a target for the fund to be collected and then once the target is achieved there is a cessation of the cess.
A tax is flexible (typically a percentage of something) while a cess can be a fixed charge and so is easier to charge.

The big difference between the tax on diesel vehicles and cess is that that this will be a fixed (annual/monthly) charge can be based on Type (SUV/MUV, Sedan, hatch, minitruck), Engine size (1, 2, 3 lit), ARAI certified FE (<10, >10<20, >20), Age of vehicle (Older vehicle charged higher). The age will also help to reduce the number of old fuel guzzlers on Indian roads. The FE will automatically force manufacturers to come up with fuel efficient solutions (because of customer shift), and lead to lower per capita consumption. Type is self explanatory.

[sarathlal]

Originally Posted by suhaas307

Also, let's not forget that diesel is NOT the future. I'd mentioned this somewhere else. It's only a matter of time before the Govt. wakes up and smells the coffee and the noxious diesel-fumes clogging millions of lungs in the country.

Exactly, and this is something that I fail to understand.
Why is the Govt. environmentalists not getting the scenario?

Even some of the most modern Diesel cars like the Cruze emits thick black smoke. There are counter arguments like, the toxicity level of diesel is more than petrol etc, but, that heavy dark smoke visible right in front of us, looks more threatening IMO.
In one city they are enforcing CNG and everywhere else, literally encouraging diesel. Any idea on what rationale?

[AWD]

Don't expect much in terms of policies, decisions from these Govts. these are not people friendly & Corruption is their sole purpose. I have almost numbed myself to such illogical shocking decisions taken by the Govts. Many State Govts. have started levving Property taxes on Residential properties. What do want? No roofs over peoples heads! Same with Cars, they want to curtail "movement".

A strong uprising or a mass movement is required that unsurps the Powers that control & put in place better Laws & Governance. Atleast a place where a Citizens basic right to Freedom is upheld.

[carboy]

Originally Posted by torquecurve

Cess is a charge on the tax charged and not a tax itself. It is a percentage of the tax to be paid.

http://en.wikipedia.org/wiki/Cess
This doesn't seem different than tax.

Originally Posted by torquecurve

Also, a cess can be temporary in nature and will go to a specific fund. (e.g. education cess charged on income tax).

Nothing is temporary. In 1971 BEST buses started levying a temporary 15 paise surcharge for some Bangladeshi Refugee fund. It still gets levied.

Originally Posted by torquecurve

The government can set a target for the fund to be collected and then once the target is achieved there is a cessation of the cess.
A tax is flexible (typically a percentage of something) while a cess can be a fixed charge and so is easier to charge.

Taxes can also be non-percentage based - for eg. Professional Tax.
Anyway, the name is irrelevant - call it tax or cess or surcharge - it's all the same - it's a tax in the end. And I am all for it on diesel vehicles. But annually is not a good idea. It will be a logistics problem. Make it one time.

Originally Posted by sarathlal

In one city they are enforcing CNG and everywhere else, literally encouraging diesel. Any idea on what rationale?

Which city is enforcing CNG?

Anyway, I don't see diesel being encouraged. Govt wants to discourage it - but everytime there is talk of doing something - the big diesel guys like Mahindra, Tata etc lobby against it.

[torquecurve]

Originally Posted by carboy

http://en.wikipedia.org/wiki/Cess
This doesn't seem different than tax.

It is not much different but the application is different. Remember in accounting there are different heads on a balance sheet, else everything is an asset or liability.

Nothing is temporary. In 1971 BEST buses started levying a temporary 15 paise surcharge for some Bangladeshi Refugee fund. It still gets levied.

My line says it can be temporary in nature. English rule - It can but it may not .
That aside the surcharge is now charged as fuel surcharge (at least in PMPML).

Taxes can also be non-percentage based - for eg. Professional Tax.
Anyway, the name is irrelevant - call it tax or cess or surcharge - it's all the same - it's a tax in the end. And I am all for it on diesel vehicles. But annually is not a good idea. It will be a logistics problem. Make it one time.

The reason I am proposing an annual tax is it will take into consideration the age of vehicle as well (older - more tax). Also it ensures the time value of the money for you and the purchase price of the car is low. (Similar to property tax - billed monthly paid annually).
E.g. if you say the tax for a hatchback should be 24K per annum (2K per month), with an expected life of 10 years for the car and annual interest rate of 8.5% then you will have to pay one time tax of approx. 157,472. This will be in addition to the already high price of a diesel vehicle and will then apply to all vehicles (private/public) which will make everything more expensive.

Collection can be easily done - PPP model.

[carboy]

Originally Posted by torquecurve

Collection can be easily done - PPP model.

PPP model = bribes, corruption, scams.

[DieselDon]

Cross-posting from a different (now closed) thread .

Originally Posted by drpullockaran

Just saw on the ET channel a recommendation that has gone to the finance ministry to implement a yearly road tax of Rs50,000 for suv and from Rs10,000 to Rs20,000 for cars other than suv. This tax is in addition to the road tax that we might have already paid. If this is passed and sees the light of day the honeymoon with the diesel vehicle is finally over. Pity Honda for planning to get out the brilliant diesel brio; a bit too late though.

Business Line : Fuel subsidy burden: Differential road tax for petrol, diesel vehicles proposed.
Business Standard : Levy annual road tax, diesel SUVs should pay Rs 50k higher.
Economic Times : Levy annual road tax, diesel SUVs should pay Rs 50,000 higher: Kirit Parikh.

I think we have seen 'such' proposals many times over.

Personally, I do not see the above solving the issue.(even iff implemented)

Explained in a dedicated thread
SIAM's version :- 0.6 % usage by Personal Cars - Link
Kirit Parikh's 2010 Report :- 15 % (which was later deemed 'to-be-revisited' by Kirit himself - 4 % ?) - Link

Hope sense prevails !