[jalex77]

Originally Posted by pjbiju

I think it would be better to levy a one time diesel subsidy tax on private diesel vehicles. That would be easier to implement.

I think thats a good idea maybe, But an even better one would be to slap a yearly tax on all private cars and taxi commercial vehicles(Not logistics, trucks or public transport buses by the way). This would make the running costs high enough to make it a deterrent for people to look at Diesel cars all together.

Originally Posted by alpha1

One does not use Urea for recreation activities!
Diesel in SUVs is PURELY recreation.

Diesel in trucks and buses is need.

Do you get the difference?

Well said and in simple terms, Exactly thats the point. There is always a bus or train to travel from place to place. A diesel car is not a necessity or that people might be so inconvenienced without it.

Note from the Team-BHP Support Team : Please use "Multi Quote" option for quoting Multiple posts, instead of creating another back-to-back post.

[patil]

In my honest opinion if I was a SUV owner I would surely have bought an SUV not for its sheer size and road presence but to cope up with the worst road conditions that is available in India.
So indirectly the government is responsible for most of the SUV sales due to bad road conditions and ill maintained roads. In fact the SUVs are difficult to drive, expensive to maintain, ride and handling is poor and are fuel guzellers. So they definetely are not better than the premium hatchbacks and sedans.
So most of the people dont buy SUVs by choice but due to compulsion. So let the government improve road conditions and road safety in the country before expecting the SUV owners pay market price for Diesel.

I am of this opinion though I am not an SUV owner.

[Aroy]

There is no harm in paying the market price for diesel. We are paying for it implicitly any way, so why not up front.

The taxes we pay are supposed to cover not only the cost of governance but for all the facilities the Government gives, but with bloated bureaucracy the taxes barely meet the cost of administration and all the subsidies. Transport infrastructure is one of components we are taxed for. But what to we get? We pay tax on fuels, ostensibly for better roads, but then you pay toll tax also. We pay municipal taxes for facilities, but now we have to pay for parking (while registering vehicle in Delhi).

And anyway why should the transport sector not pay the full price. After all they are making their money through transportation, we are only using it to make our life more comfortable.

All the talk of subsidies reminds me of the Marxist view - you will get what you need, not what you deserve based on your capabilities.

[amitk26]

Originally Posted by jalex77

Well said and in simple terms, Exactly thats the point. There is always a bus or train to travel from place to place. A diesel car is not a necessity or that people might be so inconvenienced without it.

Please move to a city where you may need to commute more then 10 km a day will ask if a bus or train exists or not. People buy Cars precisely because public transport is non-existent.

There is no subsidy on Diesel as long as Tax is higher then base amount any kind of hand back from tax money is not true subsidy.

BUt Let me ask why exactly there should be any kind of subsidy on Urea or for transport sector or whatever. Why can't the APMC act be modified and farmers should sell produce at the actual cost and every one should pay real price. There will be a temporary upheaval because true prices discovery was not allowed to happen for 60 years but it will settle in an year or so.

This soviet model of economy does not gel with rest of the capitalist model we have.

[ajmat]

In the UK - farmers get subsidised fuel. This fuel is dyed purple and cannot be used in road going vehicles. Any vehicle caught on the road with a purple tail pipe will be seized examined and crushed if guilty.

Over here - well look what happned in Malegaon!

[shankar.balan]

Man - what a horrendous thing to happen to the gentleman in Malegaon.Lawlessness is rampant and it looks like it is not going to improve. In the absence of a good law and order enforcement system coupled with political apathy, it looks like India is well on its way to Anarchy, leave alone our Democratic ideals.
Very sad and lamentable indeed.

[amitwlele]

Removal of subsidy on diesel is gaining voice from different quarters. Though it would always be a very difficult political decision for any party to take. Now Deputy Chairman of Planning commission Mr.Ahluwalia quoted the following:
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Mr Ahluwalia said that he supports the decontrol of diesel. India’s diesel prices are [FONT=4e60208b5715068d071a1a08#401400]R[/FONT]s.[FONT=Trebuchet MS] 8 below the international crude price. “We need to align our price with international prices. High petrol prices and low diesel prices is pushing people into buying high quality cars... as a matter of fact, we are subsidizing people who drive Mercedes and BMWs…while the middle class drives smaller cars that run on petrol. Diesel is much worse from an environmental point of view than petrol. But it’s a difficult political decision.”
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[/FONT]
He also seems to be of the opinion that low price of diesel is driving people to buy BMW's and Mercs.

[mjothi]

Originally Posted by amitwlele

He also seems to be of the opinion that low price of diesel is driving people to buy BMW's and Mercs.

Exactly. Its govt policy that we people utilize. So, its not the SUV owners to be blamed, but the govt policy makers.

More the difference between Petrol & Diesel, more people will move to Diesel vehicle. And govt will lose more on subsidy due to the increasing volume o Diesel.

Note: I don't have a diesel vehicle

[Gansan]

Originally Posted by amitwlele

He also seems to be of the opinion that low price of diesel is driving people to buy BMW's and Mercs.

Definitely not. But it is perhaps driving them to buy BMW / Merc with diesel engines instead of petrol ones. And maybe their own employee who drives a humble TVS 50 partly cross-subsidizes their fuel.

But in their defense, I guess they would not mind paying whatever the market price of diesel and are merely taking advantage of a situation. I would give them the benefit of doubt and say they buy the diesel versions only for their higher efficiency.

IMO the sale of diesel versions of such brands will not be affected by differential pricing of diesel. But the mass suv / diesel hatches will be killed.

[noopster]

I voted "No" by mistake. They should absolutely pay market price for diesel.

Think about it- the only reason the Govt subsidises diesel is so that the price of essential commodities doesn't go up. Pray tell me how many taxi fleets and big gas guzzling SUVs, not to mention an increasing number of sedan and hatchbacks now running on diesel actually carry essential commodities! It's nonsensical- there is no reason I as a patrol car owner should pay MORE than market price so that these fat cats can survive on my subsidy. No offence meant to anyone but it's true.

[amitk26]

Originally Posted by shankar.balan

It's nonsensical- there is no reason I as a patrol car owner should pay MORE than market price so that these fat cats can survive on my subsidy. No offence meant to anyone but it's true.

Bear in mind so called fatcats pay Rs 81000 more in excise duty at the time of purchase , In todays terms if subsidy is around 10Rs ( as per government claims actually there is 0 subsidy) then this amounts to 8100 Liters of Diesel assuming an average of 12 - 13 KM /Liter which most Diesel cars / SUV deliver it is roughly a lakh KM of driving or 4 years of usage.
This excise duty was arrived at keeping the price levels at the time when duty was fixed.

Any way why exactly you think Diesel / Petrol should have excise duty in tune with liqueur or Tobacco as it is now and not in line with Coal , Iron ore , Gypsum or any other natural resource ?
Do away with subsidy rationalize the tax.

[noopster]

^^ that was me, no shankar.balan

81K more in excise duty??? The average price difference between a petrol and diesel variant in the hatch/sedan segment is a lakh at most. Where do you get these numbers?

I never said "Diesel / Petrol should have excise duty in tune with liqueur or Tobacco as it is now and not in line with Coal , Iron ore , Gypsum or any other natural resource". Please don't put words in my mouth.

[amitk26]

noopster you never said that but when someone says there is any "subsidy" he / she indirectly say this
Let me explain

A subsidy by defination is a money given by govenment to offset the price.
Now if government Levey a heavy tax and then gives back a small part of that levied tax then it should be called tax break and not subsidy.

One may argue that this is just a word play but it is not

We never say that Software industry receives subsidy we just say there is a tax break for 10 years for sunrise industry , If we ever say it is a subsidy software industry will receive punitive taxes from other countries and products will attract anti dumping duties so no minister tom-toms this tax break as subsidy though the arrangement is revenue neutral or negative as well because government is not collecting any tax at all.

In case of Diesel it is revanue surplus for government still they call it subsidy and tax break goes to Oil company as long term bond.

About 81000 Rs check the tax proposals on various components formulated sometime in early part of this decade. At that time may be clauses were after lobbying by a particular small car maker who was struggling to find a decent diesel engine. People just remember final tax on overall product depending on length , do some google search if you want.

Otherwise there is no logical reason why exactly engine should cost more.

[KumaravelS]

Originally Posted by amitwlele

Removal of subsidy on diesel is gaining voice He also seems to be of the opinion that low price of diesel is driving people to buy BMW's and Mercs.

Merc and BMW (European manufacturers) have better positioning in Diesel vehicles. So when someone chooses to go for Merc and BMW, they may not have a petrol choice (can someone clarify)

However guys going for a swift Petrol, i20 petrol, Indica Saffire are switching to their diesel counterparts due to the differential treatment in Tax for both.

If pollution is the consideration, then even removing the tax differences would not help much. 90% of the Diesel consumptions is by Public transport, cargo transport, farm etc. They don't have a replacement of Diesel with a better non polluting system even if they want to switch.

Without market for non diesel vehicles and pumps in the largest target space, manufacturers don't have an incentive to innovate there. They stick with Diesel version's production.

Policy makers should involve Industries that cater to public transport and find out what is realistically possible.


For e.g. CNG buses were introduced in Delhi. Now a serious Govt shouldn't think of the same across the country?

Somewhere I read, if we use CNG we can cut down the oil import bill since CNG is more available within India.

Another source of pollution is the power production using Oil. Given the nature of Govt organisation, I doubt if they are less polluting than a 20 yr+ old diesel lorry, if I compare the pollution per litre of Diesel both consume. With the transmission losses, the amount of useful energy produced per litre of diesel should be compared. And finally the pollution per useful BTU (British thermal unit.. the common denominator to measure) should be measured.

Indian railways runs on Electricity (majorly) produced by these power generation plants.

Would Environ Minister Jairam Ramesh and Sunita Narain of CSI, focus on producing such reports and help instead of sensational reports targeting Mercs, BMWs and SUV?

There are more policy instruments and research that Govt and Govt Institutions should work on to reduce pollution, instead of simply blaming Diesel vehicle.

[amitk26]

Originally Posted by KumaravelS

Indian railways runs on Electricity (majorly) produced by these power generation plants.

This brings an important point as per a report I saw few years back Diesel Railway locomotives ( Diesel Electric actually) are more environment friendly , A Diesel locomotive is roughly adding 2 MW to the grid and if same 2 MW is produced in electrical power plants and transmitted then the cost and environmental impact of line electrification for hundreds of KM should be factored in.

Now obviously this report was from GE who was trying to supply 5000HP Diesel Locomotives for super heavy loads.
Is Diesel necessarily more polluting ? Yes carbon particulate matter is high about which Ms. Know-all Sunita Narayanan is lobbying so hard but how about carcinogenic cyclic hydrocarbon emissions from petrol engine which are invisible but are cancer causing? Is carbon sooth more harmful then that ?
We actually do not know in this age of lobbying until our academicians wakes up and we get authentic research reports in peer reviewed journals rather then NGOs with questionable source of funding publishing sensationalist reports in news papers.