[ananth_iy]

This is a lovely topic. I have been meaning to start something on these lines for weeks now.

Here's my 2 cents worth - I think the best way to stop the misuse of the diesel subsdy is to actually stop registering diesel vehicles with white boards - only register them as yellow boards. That way, it will not hit the commercial market and inflation while stopping the personal use of diesel.

[tj123]

That is an excellent suggestion, totally agree to your point + 1 Anant iy.
This step will reduce the overall diesel consumption by private vehicles, hence lesser subsidy burden.
Government can focus more on promoting CNG by making it available in other major cities.
By increasing the availability of CNG all buses and commercial vehicles can switched over to CNG hence reducing the diesel consumption, Delhi is a classic example to follow.

One more thought is that in cities where CNG is freely available there government can start selling diesel at market price, hence forcing the people to go for petrol /CNG.

[Torquedo]

Got this information from the Motorbeam website.

[igp_79]

Originally Posted by ananth_iy

This is a lovely topic. I have been meaning to start something on these lines for weeks now.

Here's my 2 cents worth - I think the best way to stop the misuse of the diesel subsdy is to actually stop registering diesel vehicles with white boards - only register them as yellow boards. That way, it will not hit the commercial market and inflation while stopping the personal use of diesel.

I beg to differ. Superficially what you say is right.
But why clip of the freedom of choice from the people. I would like to own a diesel car, even if diesel was priced the same as petrol

Diesel tech is also advanced, arguably more advanced than petrol tech. (Diesel engines are inherently more energy efficient than their petrol siblings. A comparitive volume diesel puts out more torque and more FE, with environmental impact being the same though the type of emissions may be different)

In hill stations the off road capability and the low end power of a turbo diesel make driving easier and pleasant

So, artificially limiting a technology to certain segments is a step backward as for as general progress of a society is concerned. everybody would agree that we are upset when some new tech is available elsewhere in the world but not in india. The need is more choice ( be it automobiles or shaving razors), not limiting of existing choices.

[shankar.balan]

IGP, yours is an absolutely fair point of view.
I agree that if a restriction on ownership of diesel cars were to be forced it would be like resuming life under the yoke of the bad old days of the protectionist economy.

Originally Posted by igp_79

I would like to own a diesel car, even if diesel was priced the same as petrol

In hill stations the off road capability and the low end power of a turbo diesel make driving easier and pleasant

So, artificially limiting a technology to certain segments is a step backward as for as general progress of a society is concerned. everybody would agree that we are upset when some new tech is available elsewhere in the world but not in india. The need is more choice ( be it automobiles or shaving razors), not limiting of existing choices.

[hemanth.anand]

Originally Posted by igp_79

I beg to differ. Superficially what you say is right.
But why clip of the freedom of choice from the people. I would like to own a diesel car, even if diesel was priced the same as petrol

very neatly put igp_79. that is why I feel the Govt. has taken the best possible alternative.

By this move, the Govt. wants to convey to the common people is that...
"The subsidy is intended for agricultural and essential goods transporters...But since the subsidy is also being used by you, we will charge extra for the vehicle to compensate. But you can still buy if you can afford." this is fair enough.

But like every other government moves, this also has loopholes. for eg: people will buy the vehicles outside Delhi.
So to avoid this, this should be extended all over the country.

[fine69]

Originally Posted by Torquedo

Got this information from the Motorbeam website.

The ex-showroom prices are not correct.

[sgiitk]

Excuse me - what subsidy? Lower taxation does not amount to subsidy. A subsidy will come when the selling price is lower than the production cost (excluding all taxation). All that is being done is lower taxation than for petrol or ATF same as kerosene, incidentally).

I will say do away with all subsidies, pay the BPL folk directly into their accounts. I am sure the Kerosene consumption will go down by at least 75%, LPG will available off the shelf (no diversion into cars, restaurants, etc) and the pollution levels will be lower. But then our archaic and corrupt system will lose a cash cow!

[Neilguy]

Originally Posted by sgiitk

Excuse me - what subsidy? Lower taxation does not amount to subsidy. A subsidy will come when the selling price is lower than the production cost (excluding all taxation). All that is being done is lower taxation than for petrol or ATF same as kerosene, incidentally).

If what you say is true, then why do the PSU oil companies cry themselves hoarse about being crushed by the burden of their subsidies on diesel, lpg and kerosene?

India finmin to pay $1.74 bln oil subsidy-oil minister | Reuters

[rajneeesh]

Originally Posted by Cesc

Agri community uses less than 5% of total diesel sold in India. And doing this will ensure nothing. This move will not make ANY difference to fuel dynamics. Most of the diesel sold in India is consumed by the transport (trucks, logistics) and commercial sector (ever seen those large gensets powering factories, malls and maybe your own office).



Like it or not we end up using a lot of subsidies not meant for us or at least not needed by us. Reason being - the choice doesn't exist. LPG subsidy is a prime example - it should be for poor households only but people like us who earn six figure salaries a month buy LPG cylinders which are subsidized to the extent of 50%. The atta that you buy (or the one used in restaurants/dhabas/office cafeteria) is largely made from grains pilfered from the PDS (subsidized to the extend of 80%). The universities that we went to are subsidized to the extent of 90%. Can't we pay up full cost of tuition? We obviously can.

The only thing this move will do is add more money to government coffers. It is again a decision taken by the govt. Which is neither here nor there. It does not alter the ground situation in any way.

Well our middle class is proably the most highly taxed section of the society. You pay 30 % tax, then there is indirect tax in form of VAT and service tax, municipal taxes, octroi, tolls etc.

Out of the Rs 100 you earn yu end up getting no more than 40- 45. the rest is appropriated by the govt which is not only oinefficient but also corrupt.

The Agriculture sector has been made a holy cow by the Political class as they take refuge over there to hide their ill gotten gains and evade taxes. In the name of the agriculturists there are subsidies on power, no agricultural IT, lower interest rates on bank loans, subsidies on fertilisers etc.

It is a shame that more 60 % of the Indian population is engaged in agriculture and cannot feed the rest of the nation. We still end up importing food in huge quantities.

Reservations and privileges are generally to support a small advantaged class of people.

In our country as small salaried class is bearing the burden of supporting 90% of the population . Despite this we get no return for our tax rupees. We have power cuts, water cuts, poor roads, poor schools, poor medical facilities no social security cover and poor law and order . To maintain a decent lifestyle we end up having power back ups, filter our own water, send children to pvt schools and colleges, go to private hospitals when ill. The list is endless.

Then government talks about middle classes/affluent classes getting subsidies meant for the poor.

No one talks about the burdened middle class who find it difficult to raise 2 kids where as the poor multiply at an alarming rate .

compare it to the west where thetaxes may seem to be higher but you do not have to pay thru your nose for these services

[ananth_iy]

Originally Posted by igp_79

I beg to differ. Superficially what you say is right.
But why clip of the freedom of choice from the people. I would like to own a diesel car, even if diesel was priced the same as petrol

Diesel tech is also advanced, arguably more advanced than petrol tech. (Diesel engines are inherently more energy efficient than their petrol siblings. A comparitive volume diesel puts out more torque and more FE, with environmental impact being the same though the type of emissions may be different)

In hill stations the off road capability and the low end power of a turbo diesel make driving easier and pleasant

So, artificially limiting a technology to certain segments is a step backward as for as general progress of a society is concerned. everybody would agree that we are upset when some new tech is available elsewhere in the world but not in india. The need is more choice ( be it automobiles or shaving razors), not limiting of existing choices.

Point well taken igp. When I was looking at a solution, I was trying to grapple with how to not hit inflation. Raising taxes on diesel vehicles would indirectly mean taxing all the transport sector and that would lead to a price rise across all sectors.... wouldn't it?

[sugam]

Instead of charging a premium for diesel cars or adding additional taxes on buying new diesel vehicles, why doesn't the government add a dye to the subsidized diesel, like in the UK?
Any private vehicle using the subsidized diesel is detected by the coloured exhaust / dye deposited at the exhaust outlet. In the UK, such private cars are impounded and crushed.

Of course, implementation of such laws would be nearly impossible here because of the castrated judiciary and the 'jugaadu' people.

[igp_79]

Dyes in subsidized diesel may have problems. here's why.
I have a kerosene based genset . When i want to pick up kerosene for the genset at any retailer's in my town, it is always the blue dyed subsidized one that is supposed to be distributed to the needy through the PDS system. I have still to see the nondyed 'for commercial use' version and mind you , i purchase kerosene rather frequently. The blackmarket in india is rampant, especially in the suburban, semiurban and rural regions . Dyed diesel would just be another regulatory nightmare for the government to add to the already inadequately regulated kerosene, lpg, PDS rice... an endless list.

[sugam]

Originally Posted by igp_79

Dyes in subsidized diesel may have problems. here's why.
I have a kerosene based genset . When i want to pick up kerosene for the genset at any retailer's in my town, it is always the blue dyed subsidized one that is supposed to be distributed to the needy through the PDS system. I have still to see the nondyed 'for commercial use' version and mind you , i purchase kerosene rather frequently. The blackmarket in india is rampant, especially in the suburban, semiurban and rural regions . Dyed diesel would just be another regulatory nightmare for the government to add to the already inadequately regulated kerosene, lpg, PDS rice... an endless list.

When the car using subsidized diesel faces a threat to be impounded and / or crushed, I don't think any owner would risk feeding it with subsidized diesel even if it is the only stuff available around. So no one in their right mind would buy subsidized diesel for their cars.
So the retailers would be forced to provide 'commercial' diesel.

It's simple, no buyers, no sale.

The diesel car owners might face some harassment initially, but once the system falls into place, it could all be ok. Only the law enforcement officers have to be strict so that they don't let offenders get off the hook.

Other views?

[Screwdriva]

This will only make a marginal difference. Still, if the government can redirect the additional funds generated into promoting CNG/ Electric vehicular infrastructure, we're heading in the right direction. Big IF though