Hike diesel cess, put the money in public transport

The Times of India , Monday, April 27, 2015
Correspondent : Rumu Banerjee & Jayashree Nandi
NEW DELHI: Delhi's environment department has collected about Rs 190 crore from the pollution cess of 25 paise per litre of diesel imposed in 2008, officials told TOI. The money was to be used to create an "air ambience" fund and promote clean air policies but a major chunk of it lies idle, according to sources.

If the money had been put into public transport, at least a few hundred much-needed buses would have been plying in the city by now. Alternatively, about 20 km of integrated road with pedestrian walkway and cycle tracks could have been built, considering that each km of integrated road costs about Rs 10 to 12 crore, according to experts.

While the cess on diesel was a welcome step, it's essential that the money raised is ploughed into green initiatives if the fight against pollution is to be joined, the experts point out.

They also make the case for hiking the cess on diesel because it addresses two concerns simultaneously—discouraging use of diesel vehicles and creating a public transport fund with the money collected through the cess. Even after the deregulation of diesel, more than 40% of new car sales are diesel because the fuel is still around Rs 11 per litre cheaper than petrol.

TOI, which published an action plan recently, recommended implementing NGT's order of banning old vehicles but also several other interventions such as increasing the tax on diesel.

"We have been asking for the cess to be increased by Rs 2 and the money generated to be used for a dedicated purpose. Taxes on diesel are low in Delhi compared to not just other countries but other states such as Karnataka and Maharashtra. In UP, too, the retail price of diesel is higher than Delhi," said Anumita Roychowdhury, head of Centre for Science and Environment (CSE) clean air campaign.

In the run up to NGT's crucial hearing on the ban on more than 10-year-old diesel cars and a number of other interventions to bring down air pollution levels in the city, several organizations and experts have submitted their recommendations. EMBARQ India in its submission to the transport department recently suggested a fuel tax as part of "travel demand measures", a measure implemented by Germany.

"People often think that the concept of higher fuel prices goes against the economy. Many European cities have proved it's not true. Here tax in general is high and on top of that there is usually an eco-tax of 10%. This helps build and subsidize public transport, for instance. Germany has an eco tax of $0.53 per litre of diesel which is substantially high. No wonder their public transport system is so efficient," said Amit Bhatt, strategy head, urban transport, EMBARQ.

Bhatt added that Delhi government could buy close to 400 buses from the 190 crores it has collected. "It can do a lot like build public transport infrastructure, make bus depots, terminals etc."

The Sheila Dikshit government had in 2004 proposed a pollution cess of 2% on diesel vehicles, besides the 0.25 paisa cess on the fuel in stations, which was implemented in 2007. The government had even contemplated hiking the 0.25 paisa cess to Re 1. However, the pollution cess on vehicles never took off as the UPA government at the Centre stepped in, discouraging the imposition of such a cess.

The cess on fuel in Delhi has remained the same for several years now, even as sale of diesel vehicles has been going up every year. While 31,784 private diesel vehicles were registered in 2010-11, the number went up to 50,062 the next year. The trend continued in 2012-13, when 68,863 diesel vehicles were registered — more than double the number in 2011.

 
SOURCE : http://timesofindia.indiatimes.com/city/delhi/Hike-diesel-cess-put-the-money-in-public-transport/articleshow/47064327.cms
 


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