New Delhi, July 28,
2004: Centre for Science and Environment (CSE) has welcomed the Delhi
government’s decision to impose environment cess on diesel passenger cars and
multi-utility vehicles, and simultaneously raise the sales tax on diesel in the budget
announced last week. The government is also examining the possibility of imposing an
additional entry tax on diesel vehicles registered outside Delhi, to discourage their
entry into the city. These long awaited steps were urgently needed to arrest the alarming
trend of dieselisation in Delhi, said Sunita Narain, director, CSE.
Speaking at a press
conference today, Narain also criticised the motivated designs of the automobile industry,
transporters and fuel retailers to scuttle these moves for shortsighted business gains
– in total disregard of public health concerns. Anumita Roychowdhury, coordinator of
CSE’s Right to Clean Air Campaign, took strong exception to the misleading claim made
by the automobile industry association, which said that environment cess on diesel cars is
not scientific as this discriminates between vehicles that meet existing emission norms
and comply with government regulations. The industry, she said, is concealing the
fact that Euro II emission standards that are currently in force in the city are
discriminatory as they legally allow diesel cars to pollute more. Diesel vehicles are
designed to emit more nitrogen oxides and particulates compared to petrol cars.
"These are the pollutants we should be worrying most about," said Roychowdhury.
Growing scientific
evidence from across the world points to the toxic effects of poor quality diesel. Recent
reports from the US Environment Protection Authority (USEPA) show that diesel engines emit
almost 100 times more particulate matter than petrol engines. Japanese scientists have
isolated a deadly compound in diesel fumes that is the strongest carcinogen known. Diesel
particulate matter has been branded as a probable human carcinogen by scientific
organisations and regulatory agencies such as the International Agency for Research on
Cancer, World Health Organisation and the California Air Resources Board. A Natural
Resources Defence Council study in the US shows that children riding diesel school buses
are being exposed to 46 times the cancer risk considered significant by the USEPA.
CSE has consistently
pointed out that the passenger car segment is in the deadly grip of dieselisation. Share
of diesel cars in total car registration has jumped from four per cent in 1998-99 to 16 in
2002-03; petrol car registration has stagnated during the same period. Annual incremental
growth rate for diesel cars is as high as 106.3 per cent, as opposed to 12.27 for petrol
cars (see
graphs).
Industry’s
resistance to the government move is retrograde and damaging, especially at a time when
regulators have finally noticed the pollution potential of diesel vehicles. The urgent
need for elimination of price advantage of diesel cars and their toxic emissions has found
policy acceptance even at the Centre. The Union ministry of environment and forests’
Raja Chelliah committee has recommended an additional excise duty and emissions tax on
diesel vehicles to "neutralise the price advantage". Yet another policy document
– the Union ministry of urban development’s draft national urban transport
policy – states categorically that diesel cars take unfair advantage of an
artificially low price and that personal diesel passenger cars "would be discouraged
in million plus cities. This could be by way of much higher registration fee to offset the
price advantage or by way of an outright ban".
CSE has strongly urged
the Delhi government not to let business designs derail "one of the most
path-breaking decisions taken in the country". This application of ‘polluter
pays’ principle will not only help control the trend of dieselisation, but also
generate revenue for the Delhi government that can be spent on other air pollution control
measures – including improvement of the public transport system. Any step taken
backwards now will only amount to an unfair subsidy for rich owners of diesel cars.
The complimentary step of
increasing the sales tax from 12 per cent to 20 per cent is the first attempt to correct
the tax distortion that had marred the fuel market in Delhi. With this eight per cent
hike, Delhi has aligned itself with the uniform floor rate for sales tax for states in the
country. Detractors should note that even after this correction, sales tax in Delhi is
still low compared to cities like Mumbai, Ahmedabad and Chennai. If the government had
brought the sales tax rate at parity with Mumbai, where it is 34 per cent, it could have
netted additional revenues of Rs 400 crore annually.
The bogey raised by
transporters and fuel retailers that higher tax in Delhi will push demand across the
border to Haryana (which has lower taxes) is baseless. The impact will be negligible. A
sizeable fraction of the public transport fleet is already on CNG. It is possible to
encourage the remaining segment of the city commercial fleet to move to CNG. The Supreme
Court has already directed the government to speed up the construction of the bypass
around Delhi so that transit traffic – trucks and other commercial vehicles –
can be taken away from the city. The implication of the cross border shift is, therefore,
minimal and cannot cause any great loss to the city.
CSE feels that any
backtracking at this stage will destroy the process of evolving fiscal polices that are
urgently needed to phase in clean technology.
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