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| Action Alert: CSE welcomes Delhi Budget's focus on clean
air
A
pleasant surprise! The Delhi government has announced the budget for the year 2005-06. The
sales tax on Diesel was increased from 12 per cent to 20 per cent. Although announced in
the last Budget, this was put on the back burner following severe pressure from the diesel
lobby. Nevertheless the Delhi government did not buckle. The hike in tax will be enforced
as Value-Added Tax (VAT) from April 1, 2005. More good news - CNG has been exempted from
VAT.
We've long been campaigning for making diesel less attractive an option for consumers. Although Delhi has the country’s highest per capita income, it had the lowest diesel prices. Unlike other states, Delhi was not even levying the minimum 20 per cent sales tax on diesel. The sales tax on diesel Mumbai is as high as 34 per cent. If the Delhi government could apply the ‘polluter pay principle’ and bring the sales tax on diesel at par with, say, Mumbai’s rates, it could add as much as Rs 700 crore per year to its coffers - money to spend on public transport and stricter vehicle inspection programmes. Clearly, the first step towards correcting this distortion has been taken. Higher car prices offer opportunity Only a few days preceding the budget, the Delhi government changed its age-old practice of linking road tax to the weight of the vehicles. Now it will be levied according to the price of vehicles. This is expected to increase the price significantly – especially for the higher-end cars. Diesel cars will additionally have to pay an extra cess. In the meantime, the auto industry has announced price hikes in all classes of vehicles from April 1, when Euro III standards come into force. The Budget also hiked the overall allocation
for the transport sector, and together with the revised road tax, this will give the Delhi
government considerable muscle and money to promote public transport. Let's now hope that
these funds don't end up just being spent on additional flyovers. Related links >>
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| Your opinion
counts! Write to CSE’s ‘Right to Clean Air Campaign’ (cleanair@cseindia.org) with your comments. |
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