Slap tax on luxury car users, says Plan panel

Slap tax on luxury car users, says Plan panel

While suggesting a road-map for shifting India to a low-carbon economy, the panel headed by energy economist Kirit Parikh has suggested an “up-front tax on vehicles to compensate for different fuel taxation.”

When asked to elaborate if he is proposing a tax on SUV owners, Parikh said tax should be imposed on diesel vehicles because of the subsidy the fuel received from the government.

The issue was raised by Union environment minister Jairam Ramesh almost six months back when he expressed concerns in the growth of SUV and other heavy vehicles for personal use. He too suggested a new fiscal policy to discourage their purchase in the first place.

The panel also suggested other vehicle efficiency measures like mandatory vehicle labelling system, minimum efficiency standard for all vehicles, corporate fleet efficiency standards and introduction of hybrid and green technology.The panel also suggested more utilisation of the Railways for freight transport because it is about 15 times more efficient than surface transport.

But better utilisation would come only when there is better operational handling, better cargo management and reduce burden of cross subsidy vis-a-vis the passenger transport. Set up in the wake of the Copenhagen climate summit, the panel looked at carbon-intensive sectors like power, transport, industry, buildings and forestry to suggest measures to ensure how each of these areas could have lesser carbon-footprints without compromising on the national economic growth.

The panel, however, made it clear that if India is to sustain an 8-9 per cent GDP growth in the next decade, the total greenhouse gas emissions in 2020 are expected to be at least double of the absolute levels in 2007 notwithstanding the improved emission intensities.The government also initiated a plan to assess the impact of GDP growth on ecology using Green Accounting System and the process will be completed by 2015.

The Union ministry of environment and forest has set up a group under the chairmanship of Sir Partha Dasgupta, Frank Ramsey professor of economics at the University of Cambridge and with noted economists like Vijay Kelkar, Nitin Desai and Kirit Parikh as its members to determine how to calculate the environmental cost of development.