Committee suggests tax hike on diesel cars

This may be a bad news for those going for a diesel car, but it is certainly good news for the environment. The Indian economy may be achieving new heights and may target 9 percent growth rate, but has anyone analyzed the impact of the carbon emissions. We are not sure of the individuals but the government did and established a committee to assess the impact of economic growth on the environment. The committee recently released its interim report and is said to have suggested hike in tax on diesel cars. If this is accepted the diesel car prices will shoot affecting diesel car and SUV sales in India.       

Since diesel is cheaper than petrol, and despite the fact that diesel cars cost more than the petrol versions, still those who have high running prefer diesel cars than the petrol versions. It is also hoped that the proposed hike in tax will in a manner will compensate the difference in the petrol and diesel prices.

The panel constituted by the planning commission of India was headed by Kirit Parikh who has been a member of Economic Advisory Council (EAC) of the Prime Minister of India. The panel researched on low carbon strategies for inclusive growth. Besides, the tax hike, the committee is also said to have suggested a vehicle rating system and minimum efficiency standards for all diesel cars.

With the suggestions in place, the up-front tax on diesel cars is expected to increase thus affecting the on road pricing of cars. The committee also suggested a similar strategy for power, transport, industry, buildings and forestry sectors to cut carbon emissions. Besides, the panel is said to have suggested proper city planning and more use of public transport in order to keep a check on carbon emission and sustainable growth achievement of more 9 percent.