Upholding the Polluter Pay principle, the Supreme Court has extended the ban on the registration of diesel vehicles with over 2,000 cc engines in the National Capital Region till auto makers are ready to compensate for the pollution that such vehicles cause to the city environment.
Although the quantum of such compensation is yet to be finalised but the outcome would significantly increase the price of such vehicles thus, impacting its demand in one of the most promising regions (NCR) of the country.
The industry feels that such a cess on top of industry-wide infrastructure tax of up to 4% imposed in the budget, would be too much of a burden that can be passed on to the customers. “The green tax that the court is contemplating might drive the price sensitive buyers toward the cheaper petrol variants,” says Sudarshan Shreenivas, an auto expert with India Ratings & Research. The super rich, however, would not mind paying such a levy, adds Shreenivas.
The fact that some car makers are already ready with sub-2,000 cc engines proves that they anticipated such a levy. Mahindra & Mahindra is ready with its 1,990 cc engines.
The fact that some car makers are already ready with sub-2,000 cc engines proves that they anticipated such a levy. Mahindra & Mahindra is ready with its 1,990 cc engines. Similar moves by others might help the industry to move-on without circumventing the court’s order. 2,000 cc diesel vehicles especially the sports utility vehicles (SUVs) are the big craze among the upwardly mobile middle class as diesel driven vehicles are perceived to be more fuel efficient than petrol run cars. The auto industry feels that the sluggish demand conditions are already testing their patience. The industry fears that a similar move by other state governments might impact the demand of diesel cars quite significantly with the consequent job losses.
Green lobbyists, however, have hailed the judicial intervention to clean the city air as Delhi is one of most polluted regions of the world.