Environment cess on diesel cars, hike in diesel
sales tax a giant step towards clean air in Delhi: CSE

Delhi takes lead in slapping environment cess on polluting diesel technology – and becomes the first state to do so.

The city government has simultaneously increased sales tax on diesel.

These are vital steps to control the deadly trend of dieselisation in the city.

New Delhi, July 22, 2004: Centre for Science and Environment has welcomed Delhi government’s move to impose environment cess on diesel passenger cars and Sports Utility Vehicles (SUVs) and increase sales tax on diesel in the Budget announced today. These long-awaited steps were urgently needed to arrest the alarming trend of dieselisation in Delhi.

Recently, CSE’s open letter had drawn the attention of Delhi Chief Minister Sheila Dikshit to the alarming rise in the number of diesel-run cars. The toxic emissions from these cars were not only a threat to the citizens of Delhi but also threatened to negate the overall gains of the pollution control measures taken earlier. CSE had urged the chief minister to review the skewed taxation policy to end the unfair advantage that diesel enjoys.

This application of ‘polluter pay principle’ will not only help to control the harmful trend of the growing number of diesel cars but also help Delhi government to generate revenue that can be spent to improve public transport system.

CSE had highlighted that vehicle registrations data collected from State Transport Authority show that the share of diesel cars out of all the cars registered has increased from four per cent in 1998-99 to 16 per cent in 2002-03. Petrol car registration has stagnated during the same period. Annual incremental growth rate for diesel cars is as high as 106.3 per cent, as opposed to 12.27 per cent for petrol cars. It therefore seems unfair that while in the interest of public health, mass transport buses have been converted from diesel to CNG, the rich car owners are technically ‘subsidised’ with a distorted tax and pricing policy that encourages them to choose this toxic fuel.

The sales tax on diesel was fixed at a paltry 12 per cent. Delhi had not even imposed the minimum 20 per cent sales tax on diesel, as done by the other states. This anomaly has now been addressed. In Mumbai, the sales tax on diesel is as high as 34 per cent.

Inappropriate policies have allowed diesel vehicles with inherently high Nitrous Oxide (Nox) and particulate emissions to proliferate in the city. Diesel vehicles that are high emitters of toxic particulates are also legally allowed to emit three times more NOx than petrol vehicles under the current and future Euro norms. Expansion of this fleet will undo both particulate and NOx gains from the measures already implemented. It will be extremely damaging to ignore the scientific evidence accumulated from round the world on the toxic effect of diesel.

For a complete backgrounder, visit: http://www.cseindia.org/apc-index.htm