Car Manufacterers Pushback Against Diesel Car Tax

Additional tax on diesel cars will further impede industry growth: M&M

Terming the calls for imposing additional tax on diesel vehicles as “retrograde”, homegrown auto major Mahindra & Mahindra today said such a move will only further impede growth of the industry which has had a difficult year in 2011.

Reacting to issues raised from various quarters over usage of subsidised diesel fuel for “luxury” and seeking imposition of additional tax to the tune of Rs 80,000 on diesel cars, the company said use of diesel fuel for luxury personal vehicles is less than 0.2 per cent.

“In my opinion to consider an additional tax on diesel vehicles is a retrograde step...” Mahindra & Mahindra President (Automotive and Farm Equipment Sectors), Mr Pawan Goenka, said.

Urging the government not to consider such a move, he said: “In the upcoming Union Budget, this is perhaps the most critical item for the automotive industry which will have a significant impact on the growth of the industry in the upcoming fiscal year.’’

Explaining why such a move would prove counter-productive, Mr Goenka said: “A tax on diesel vehicles will further impede growth of the industry which has had a difficult year in 2011.’’

Of course, the industry estimate of the percentage of diesel used by diesel cars is flawed :Press Release: CSE trashes contention that diesel use by cars is very low.  Got to keep those profits rolling in.

Gordian Knot of Petrol/Diesel Subsidies

Cleaning the fuel subsidy mess

It is high time that people, who can afford to buy cars and two-wheelers, realise that fuel won't come in cheap. None of them complains when they have to pay for expensive airline or movie tickets. Is petrol such a measly commodity that it has to be sold cheap? There is just no alternative unless state governments decide to do away with sales tax on petrol, clearly an inconceivable option from the viewpoint of revenue generation. Dealing with diesel pricing won't be as straightforward, since it is used in the commercial vehicle segment which carries food products across the country. Higher operating costs will do little to curtail inflation, and diesel prices just cannot be tinkered with, at least for now.

Yet, it is only logical that users of cars and SUVs pay the market price for the fuel. The auto industry believes this is a better alternative to taxing diesel vehicles. Now, how does one ensure that diesel-driven cars are charged higher at retail outlets while vans and trucks pay less? Certainly not the easiest of tasks, especially in a system where cross-subsidies only spawn fuel adulteration. Clearly, finding a solution to this huge mess is almost impossible. There have been any number of expert committees which have come up with suggestions, but the reality at the ground level is something quite different. Till then, sleepless nights are only inevitable for the Government and the entire oil sector.

The auto industry is entirely based on fuel subsidies, hence they would not like the government to further tax diesel vehicles.  They are all shifting to making diesel vehicles since they see people opting for those.  But I don't understand why it is difficult to tax diesel-driven cars at a higher rate without penalising commercial diesel vehicles.  Surely there should be some way of differentiating between car and truck sales?

Profiting From Water

Let water, not profits, flow

As a finite, life-giving resource, access to water must remain a fundamental right. The state, as custodian under the public trust doctrine, should uphold the right of the citizen to clean, safe drinking water. It is such a strong, rights-based approach that should underpin official policy on water in India. Many areas in the country are water-stressed, and there are simmering inter-State disputes on sharing river waters. The National Water Policy 2012, now published in draft for public comments, should ultimately take a holistic view of the issue. The draft text makes some references to the importance of water for people and Nature, but is disproportionately focussed on treating water as an economic good. Such an approach predicated on realising the costs that go into the supply of water can only distort access and prices in the long run, affecting less affluent citizens. To suggest, for instance, that the state should exit the service-provider role and become a regulator is only a step away from abandoning the equity objective. Private sector water services have clearly failed in many countries, including those in the global North, and local governments have taken over again. In the current year, for-profit private water companies in England are raising tariffs, while the publicly-owned service in Scotland is not. Just over a decade ago, water wars in Bolivia reversed privatisation moves. Evidently, private partnership imposes the burden of extra costs.

...if there is any one factor that renders much of India's water unusable, it is industrial pollution. This issue calls for urgent action, and the policy can cover major ground if it lays greater emphasis on making the ‘polluter pays' principle work. A clean-up can make a lot more of India's water bodies and groundwater available for use by people.

 Makes perfect sense.  Also, get rid of the corporate subsidies implied in letting industries pollute untrammelled by the environmental costs.

Corporate Subsidies Anyone?

Coal India puts off price hike on key users' protest

NEW DELHI, JAN 31: 

Buckling under consumer pressure, Coal India Ltd has rolled back the price hike proposed under its new Gross Calorific Value-based pricing mechanism effective January 1.

Coal India will delink the rates from international parity prices, said Mr N. C. Jha, Chairman. This would eventually reduce the prices for different grades of coal. However, the GCV-based grading of coal will continue and the anomalies in the pricing structure will be set right, he added.

Coal India switched to the GCV-based pricing mechanism in line with the international norms and had proposed an average of 12.5 per cent hike in prices.

This had evoked strong protest from consumers in sectors such as power, cement, steel and aluminium. In the earlier Useful Heat Value (UHV) method, the pricing was decided on the ash and the moisture content in coal. 

If The Water Loses Its Salt

Or its purity, where do we go?

Environment Ministry pulled up for absence of water pollution policy

The Comptroller and Auditor General of India (CAG) has pulled up the Ministry of Environment and Forests (MoEF) for the absence of a “specific water pollution policy”. There was no inventory of water sources or identification of pollution levels, the absence of which hampers water pollution management at all levels, it said in its report on the MoEF's performance during July 2010 to February 2011, when Mr Jairam Ramesh was heading the Ministry.

LACK OF PLANNING

Noting the lack of planning to tackle pollution of rivers, lakes and groundwater and assessment of the risks to health and environment, the CAG called for strict enforcement of the related Acts as well as higher penalties.

It said the Ministry had not carried out any study to probe the effect of dumping of industrial effluents by paper mills, pharma, chemical, distilleries and so on.

The National River Conservation Plan (NCRP) was also flayed for focusing on “sewage and crematoria as sources of pollution of rivers. Other kinds of pollution (like industrial pollution) were not considered which had equal, if not more, adverse effect on health and environment”, the report said.

Industries are being subsidised indirectly by this lack of enforcement of the pollution laws.