Speaking at the SIAM’s 63rd annual convention, Union Minister of Road, Transport and Highways Nitin Gadkari has urged the automobile industry to stop the production and sale of diesel cars and SUVs, which he described as ‘polluting vehicles’.
- Gadkari suggests additional 10 percent tax on diesels
- Clarifies this is only a recommendation, not a mandate
Gadkari said it's time the industry said "bye bye to diesel", and if not, he would like to propose an additional 10 percent tax as a "pollution tax" on diesel vehicles, with the intention to make it difficult to sell them in the country. He added that the domestic industry must make significant progress towards reducing fossil fuel imports.
With the tighter BS6 Phase 2 emissions norms, many diesel vehicles and engines have already been shelved, and prices for those still in production have risen considerably, thanks to the expensive technology required to meet the norms. In fact, data sourced from JATO Dynamics India show that the share of diesel vehicles in the market have gradually come down, while petrol, CNG and electric vehicles have become more popular. In 2019, diesel vehicles constituted 32.78 percent of the market, but currently it stands at 17.74 percent (year-to-date).
The additional tax could be the final nail in the coffin for diesel vehicles, but this is still only a suggestion from the minister who, in the past, has often voiced various ideas, not all of which have been implemented. The minister later also clarified via a tweet that "there is no such proposal currently under active consideration by the government."
Hormazd Sorabjee
Anurag Chaturvedi
