Increase duty on diesel cars up to Rs 2.5 lakh: Jaipal Reddy

[Payeng]

You have hit the nail on the right head. Stop the subsidies.



For a person driving to work daily say 80 KMs, the efficient Diesel Engine will always be more preferred than a petrol engine, even if the gap were to come down. Gone are the days of Indira Gandhi when driving personal cars was considered to be a luxury. I was quite surprised to read this line.

Things have changed now in India, there are more avenues of revenue generation. We do not talk about the wasteful expenditure of the Govt. we do not talk about the downsizing of the Govt. we do not talk about the tardy implementation of projects, where the cost overruns are 3 to 4 times the original budget costs. If we are able to control these, we may be able to continue the necessary subsidies, though not the fuel subsidy.

Another probability is maybe Diesel price will be equal to Petrol price as nothing is literally subsidised but taxes are exempted, I dont see how it will help the economy, current tax rates are controversial but think from an economic prescriptive, fuel runs a national economy, India's highest imports are crude oil, a tax less government for India is illogical.

Now regarding the subject of is personal transport in India a luxury or not, does not needs a comparison of time and development, a personal transport exempting the issue of non availability of an alternative option 'is' considered as a luxury in economic term, in the other hand bus transport system, railways system and airlines are considered as economic transport, while a personal jet can be considered as a luxury same stands for a personal car and you cant own a personal rail transport ...lol, one definition of luxury is : 'something you can do without', the term 'economy' define itself, if we are wasting fuel we are hurting our economy. Wonder why this 'Save Fuel' advertisement, its not that humanity is trying to preserve an endangered kind, but no proper utilisation hurts they economy.

I do not support exemption of taxes on luxury, the government (which do not means Congress) is right to tax upon luxury on fuel which is a major import item for our economy, remote inaccessible areas is an exception but they enjoys certain subsidiary to cover up, though its another matter of debate and controversy. Ever citizen capable of owning his own car is a good sign of development, but everybody travelling uneconomically cannot be justified plus accessing subsidised fuel which is meant to accelerate national economic growth but utilised in personal luxury is certainly a matter of concern for our national economy planners which may not be the case for the Political Chair holder of a department.

Now why tax on fuel? Because it is the highest imported item for our economy, shaking EXIM balance and free luxury upon it is certainly not justified from an economical point of view.

Now why exemption from Diesel? Because literally Diesel drives the national economy which in turn gives back economic growth to maintain our EXIM balance in the positive side.

What will happen if people selects diesel as the fuel of choice for personal transport? The exemption on diesel will not stand justified as the core cause of exemption will stand null and void.

I may agree that the increase of price for personal use Diesel vehicle might not be the most effective solution, that makes a good debate, but raising issues like corruption or black money or as some raise the issue of CONgress is too political a debate which I have least interest to participate in such an arrangement. Yes, I agree we need to fight with corruption issue and money laundering but stopping a subsidisation program because our current leaders are corrupt is what I think is not a valid point, thats not the way economy works.

My stand on corruption is, corruption is not in the government (I dont mean congress when I say government) but in the minds of the people and the society at large, no law on earth can stop it or enforce a fully efficient supervisory authority unless people start realising it themselves and strive to throw it out of the society themselves. Correction on system ( government machinery) can be discussed from the point of view that where is the loop hole? but rebooting the system is not what I prefer with the flaw still within.

Lastly I would like to know what is your point of view on this debate, Economics or Political?

 

[rock127]

Another idiot opens his mouth, without understanding one tiny bit. Makes one wonder about his Ivy League education, and if rumors are to be believed he is among the runners for the post of the Finance Minister.

The main and the tough job of the Govt. is to bring some rationalization to the fuel prices. As EjazR had recently pointed out so skewed are the prices that today, Furnace Oil is costlier than Diesel!!!!

What is this Wizard going to do about the lakhs of diesel cars already on the road, what about the the millions of Diesel generators belching away, millions of agricultural pumps pumping water in the absence of an irrigation system??? What will happen when the car sales plunge. already the IIP is in almost negative territory........and he is a Minister.

Perhaps govt is in a hurry to devastate the economy on a fast track and after that looting all the money and putting in UBS.

 

[Payeng]

No panic buying of diesel cars despite petroleum ministry's suggestion to hike duty

MANGALORE: Car dealers in the coastal city have been a worried lot ever since Union petroleum minister S Jaipal Reddy recommended to the finance ministry for a steep additional excise duty on diesel-run cars.

According to the proposal, Reddy suggested that an excise duty of Rs 1.7 lakh should be imposed on small cars, while medium and larger diesel-run cars, such as sedans and sports- and multi-utility vehicles, should attract duty of Rs 2.55 lakh.

Dealers are egging on the customers not to postpone their buying in this lean season to boost sales citing the petroleum minister's recommendations to finance minister Pranab Mukherjee.

There worry is not without a reason. The sale during peak time in Mangalore is 1,500 cars per month and averages at 1,200 per month in normal times. The high interest and petrol rates have seen the growth slump drastically in the recent two months to 700 cars per month, all dealers put together, despite assurance of low interest rates and freebies.

Cauvery Ford, deputy general manager, Rajesh Shetty told TOI the recommendations, if accepted by finance ministry, would be blow to the whole automobile industry which is registering hardly any growth. Though there may be a renewed demand for petrol vehicles in case the rates are hiked, the whole scenario is depressing,'' said Shetty. The car sales are likely to be down from mid-June and mid-July as many customers put off buying in the inauspicious Aati month.

Mandovi Motors team leader Sandhya says that customers are still not aware of the proposal; hence the demand is low for this time of the year and there's no panic buying for available stock of diesel cars. Another reason for low demand during this season is customers defer buying vehicles either due to spend on school admissions or vacations.

No panic buying of diesel cars despite petroleum ministry's suggestion to hike duty - The Times of India