Economy

Demand for “Penal Tax” on Diesel Vehicles

M Reyaz,  BeyondHeadlines

New Delhi: Delhi based industrialist Vivek Bharat Ram is pressing for “penal tax” on diesel vehicles.

Ram has written a letter to the Finance Minister Pranab Mukharjee, dated June 18, a copy of which is available with the BeyondHeadlines, demanding action on the Kirit Parkih Report at the earliest.

File photo of Tata Nano car at an auto expo

He writes, “I am unable to understand how the Government is continuing with its flawed policy of not putting a penal tax on diesel vehicles.”

He added, “As it is unlikely that the government will put diesel on a free float like petrol” and so the recommendations of the Parikh Report must be implemented.

In earlier letter to the Deputy Chairman of the Planning Commission, Ram had written, “You are aware that there are mainly two large manufacturers who produce primarily.” diesel vehicles and, through the automobile associations, they have a strong lobby to keep status quo.”

The two companies hinted at, but not named, are Tata Motors and Mahindra &d Mahindra.

He wrote this letter “in continuation” to his earlier letter dated May 20.

He again took a dig at those companies writing, “The general perception is that this flawed policy continues to remain at the behest of two major manufacturers in the automobile industry…”

He further alleged, “If this is true this matter is a scam of huge proportions costing the Government tens of thousands of crores of rupees every year.”

He argued that such a “policy is distorting the investment policies of automobile companies” as because of cheap diesel price they are forced to making huge investments in diesel technology.

Parikh Report had argued that, “If you are putting heavy tax on petrol because it is for luxury consumption and if you don’t want to put the similar tax on diesel, then obviously we have to put the same kind of tax on diesel vehicles like SUVs and others.”

Parikh had further added, “If the government desires, it could consider imposing an upfront tax on personal (diesel) vehicles.”

Environment Minister Jiaram Ramesh, last year, too had echoed similar views.

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