Keep the green tax

The Centre would be sending out a message totally incongruous with national development objectives, if it withdraws duty hike on SUVs

The Centre would be sending out a message totally incongruous with national development objectives, if it buckles under lobbying pressure and withdraws the three per cent excise duty hike on Sports Utility Vehicles introduced in the Union budget. SUVs are not the common man’s utilitarian cars and the increase in duty covers only the more luxurious vehicles that are, at least in the Indian context, mere Veblen goods. The world over, SUVs do not win plaudits for fuel efficiency, and a muscular ‘bigger is better’ cult has grown around these vehicles. These large and heavy space-hogs have a bad accident profile when it comes to pedestrians. Pleading the case of wealthy SUV buyers who want to avoid paying a small extra premium that will fund social sector investments is plainly indefensible. In a populous country with scarce resources, even the choice of an SUV for mobility is unsocial, as Minister Jairam Ramesh observed a couple of years ago, when he was in charge of the Environment Ministry. Moreover, allowing SUVs to access unlimited subsidised diesel when public buses are asked to pay bulk prices adds to the iniquity prevailing in transport. Given all this, it is surprising that Minister for Heavy Industries and Public Enterprises Praful Patel has sought withdrawal of the hike in excise on these vehicles using the fig leaf of falling automotive sales.

The emergence of motor car and motorised two-wheeler sales as prime drivers of growth in the automotive sector is incompatible with the need for sustainable mobility. If people must be able to travel quickly in urban centres and in rural areas, the backbone must be mass transport. Acknowledging the falling share of public transport and non-motorised modes in cities, the Planning Commission’s Expert Group on Low Carbon Strategies for Inclusive Growth headed by Kirit Parikh said in its interim report that fuel efficiency must be promoted through labelling of vehicles, defining minimum efficiency standards and incentivising bus operations in cities through capital subsidy and fuel duty reimbursements. This is the obvious way to go, but none of this seems to be on the priority list of policymakers. Extraordinarily, they are targeting the SUV duty hike on the ground that there is no separate classification for such vehicles under the Motor Vehicles Act, ignoring the rules on vehicle length and engine capacity already available. If Mr. Patel and others like him indeed want to help villagers who need better mobility, he should be asking for concessions for the bus industry. That can lead to robust, low cost vehicles to serve thousands. After all, the commercial vehicle industry is in an even more difficult situation than the passenger car sector.

The article has been corrected for a factual error.

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Printable version | Jun 4, 2020 9:20:02 PM | https://www.thehindu.com/opinion/editorial/keep-the-green-tax/article4599113.ece

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