The following is excerpted from Times of India dated 27/11/2012:-
Amicus curiae and senior advocate Harish Salve, who has been assisting the forest bench of the Supreme Court for nearly a decade, lamented that the benefits of switching the entire public transport system in Delhi to CNG was lost as more and more diesel cars were added every year because of the price differential between petrol and diesel.
“Delhi has already exhausted all soft options,” warned Salve before arguing before a bench of Justices Aftab Alam, K S Radhakrishnan and Swatanter Kumar that “the solution must be to restrain the growth of personal vehicle usage, particularly diesel vehicles, and this is only possible through a highly augmented transport system in Delhi and the region”.
Justifying harsher levy for diesel cars, Salve said in his application, “The market share of diesel cars is more than 50% of sales. This is because of the growing differential between petrol and diesel. The emission norms for diesel cars legally allow higher limits for NOx and particulate matters as compared to petrol cars.”
The former solicitor general, while advocating imposition of 25% of cost of all new diesel cars as green tax, suggested levy of an environmental compensation charge on existing personal vehicles — ranging from 2% (petrol) to 4% (diesel) of the vehicle’s cost every year.
For old cars, the levy would be collected annually by the insurance companies along with the premium amount, he suggested, and said the insurance companies must ensure that the vehicle had valid pollution under control certificate at the time of annual renewal of policy.
We in India have an uncanny ability to mix immiscible facts and make a concoction and purvey the same as the TRUTH for common consumption.
First and foremost, the issue on Diesel to be decided is whether the subsidy on Diesel, is being utilized by those who are not the targeted beneficiaries of the subsidy. If so, then how to quarter them and make them pay for the benefits so enjoyed by them.
Secondly, if Diesel is more polluting how to curb the usage of Diesel in cities, where pollution has become an ever increasing nuisance.
The first is related to the well entrenched SOCIALISM and the second is relatable to ENVIRONMENT.
To deal with the first issue, if the targeted segment of Diesel users are the Railways, road transport, DG sets, farm and earth moving equipments then surely the passenger car segments are to be taken out of the persons enjoying the benefits. Is it possible to take them out? And in any case, what is the percentage of the un-targeted segment? This un-targeted segment of diesel using passenger car owners constitute 0.6% to 16% (depending on the data source) of total consumption of Diesel in the country. The fears that this is growing and might skittle out the petrol cars is not an entirely unfounded fear. But, should we get into the shoes of HONDA CARS and help them out in limiting the purchase of diesel cars? HONDA stands out among all the names merely because they have the avowed principle that they produce only gasoline cars. No other car manufacturer falls in this segment.
So if there is an 8% of cars using the benefits unintended for them how do we recover the benefit from them? That should be the issue. I believe, if we frame the issue properly, we may have a fair chance of discovering a method to solve the issue. But if we start with a SOCIALISTIC bent, like assuming that a person who can make a higher capital cost would reap the benefit of this subsidy and save over a period of time, we are more likely to impose immediately impalpable costs and curb INVENTIONS on improvement of diesel passenger cars.
Democracy is for the people. But if we segment the people into those who can and those who can’t, then we cannot be ‘for’ the people. The people who decide for others are ‘by’ the people category. But these BY THE PEOPLE segment the people into those who can and those who can’t and in the name of socialism lay burdens on those who can, merely based on their notions of socialism. Instead, impartially decide on issues and make the undeserving pay- but do not make them pay more.
I travel a lot by road and use our National Highways. There are trucks which struggle to climb even a moderate slope, when i asked a person who was employed with Ashok Leyland, as to why you make such inefficient engines which struggle to carry the cargo, he said, “Boss, these trucks are designed to carry 12-15 Metric Tonnes and they are made to carry up to 25 tonnes, and that is the reason for all that struggle. ” I have more reason to believe him considering his domain knowledge and incisive thinking.
My suggestion is that, there are umpteen NHAI toll collection centres, why not have a weighbridge be installed at every toll centre so that when the vehicle comes to a stop, all transport vehicles could be charged as per the weight and not by the axles and tyres of the vehicles. This will ensure that exploitation of diesel by the truckers are not resorted to.
Further, DG sets are used by the various gated communities and high end tenements, why not charge them for such usage and say that anyone who BUYS DIESEL IN CANS WOULD NOT BE GIVEN THE SUBSIDY BENEFITS? This will also ensure that the earth moving equipments and excavators do not use subsidized diesel, as most of the times, they need to buy diesel as these excavators cannot travel by roads.
Another suggestion is that, when diesel bunks are allotted to fleet owners for diesel, if the vehicles used are for earth moving equipments, why not charge them for diesel at unsubsidized rates?
This is to take care of the enjoyers of unintended subsidy.
As regards the environmental issues , there was a time when sulphur emission was sought to be reduced and at the instance of Government, the oil refining companies went on a overdrive and ensured that the Diesel supplies to the country was reduced in its sulphur content. So why not we ask PCRA and CSIR (there is an institute called Indian Institute of Petroleum which eats up Rs 18 crores per year on allocations by the GoI and sits on 257 Acres of land allotted by the Government for it) to conduct original research instead of aping and pilfering innovations from the West?
Instead, Mr Harish Salve gets into TAXATION benefits for the exchequer and suggests GREEN TAX of 25% on all new Diesel cars! How preposterous! The actual cost of producing a diesel car is not any higher than that of a petrol car. In any case, if the production of more diesel cars are encouraged, then the price of the diesel cars would come down, but when the Government reads Socialism into the current account benefits enjoyed by the diesel car owners, then some in the Government tend to accept these opinions as God given Truths and impose unwanted Taxes on Diesel cars.
The Polluter Pays principle is one of the binding principles of the Environmental Law, but why do we Indians have to make an 8% user pay for the sins of the whole community, which enjoys the benefits of low freights, railways, farm equipments, earth moving equipments etc.? Sheer OPINION which is being sanctified in the altar of Environmental Laws!
Finally here is an excerpt of an article from THE ECONOMIC TIMES (25/08/2012):-
Although the government tries to keep diesel prices artificially low, there is no mechanism to ensure the benefits go to the desired purposes. “A good portion of the diesel subsidy is used by sectors where it is not intended to be spent. Nearly Rs 8000 crore subsidy is consumed by power generating sets in malls and big buildings, while around Rs 3000 crore of subsidy is spent in powering telecom towers,” said Debasish Mishra, Senior Director, Deloitte India.
According to the government the first round of field survey of All India Study on Sectoral Demand of diesel and petrol revealed that nearly 16 per cent of diesel is consumed by passenger vehicles, 4.6 per cent by gensets and 2 per cent by mobile towers. This is wastage of an estimated Rs 23,000 crore of subsidy for full FY13. However, PPAC maintains its study will take one year to finish, when it will be able to put definite numbers to the consumption pattern.
Here is another link of a news item which pegs passenger car consumption of diesel at less than 1%: http://timesofindia.indiatimes.com/business/india-business/Personal-cars-account-for-0-6-of-Indias-diesel-consumption/articleshow/11249656.cms. So, if one goes by Kirit Parikh’s report at 15% for passenger cars, the total diesel subsidy would be Rs. 15, 000 crores (on a total diesel subsidy of Rs. 1,00,000 crores) but if one were to go by the least suggesting data, then the subsidy is only Rs 600 crores. So let us firstly decide the quantum of unintended subsidy enjoyers and find out the FACT of the problem before suggesting the remedies to the Supreme Court of India.
Otherwise, the diesel passenger car owners would become the whipping boys in the hands of the ever eager taxation proponents and collect money disproportionate to what they enjoy. If at all the diesel car owners enjoy, it is because Diesel gives more mileage per litre of diesel than petrol. Our legislators are not likely to review any of the measures relating to taxation once imposed. Further our budgeting mechanism assumes the tax collection based on the last year’s tax accruals and adds the growth of consumers in that sector and calculates the taxes for the coming fiscal.
Let us be rational and encourage rationalizing our taxation and not let harebrained opinions, like GREEN TAX, rule the roost!
Firstly impose a condition on all diesel engine/car manufacturers that the engines ought to be made compliant as per the latest standards fixed by the European countries, which have imposed stringent emission norms. That only such diesel vehicles are to be sold from a particular cut-off date.
Secondly, impose conditions on Petroleum refining companies in India to manufacture Diesel which could be used only by those passenger car engines which are compliant of European emission norms.
Once these two conditions are met, then the Diesel passenger cars in India, would have to buy that Diesel meant only for passenger cars and price this Diesel WITHOUT SUBSIDY. This would ensure that the Diesel passenger car owners do not enjoy the benefits unintended for them. Even this charge that Diesel passenger car owners are living off the subsidy would be over.
Further, when the latest technology is brought in norms relating to emission standards, Environmental concerns would also stand addressed.
So what do we do with the existing Diesel cars? Simple, like the phat-phats of Delhi, they would be phased out after serving 15 years , when an FC becomes essential.
INSTEAD OF FOLLOWING A SANE SOLUTION, IF WE GO BY HAREBRAINED SUGGESTIONS THE FUNDAMENTALS OF DEMOCRACY WOULD BE SHAKEN AS THERE WOULD BE NO RATIONALE FOR OUR DECISION MAKING AND DEMOCRACY WOULD PETER INTO OLIGARCHIC DEMOCRACY!