Thaindian News

New Delhi, May 9 (IANS) Despite Environment Minister Jairam Ramesh calling for imposing a tax on oil-guzzling diesel SUVs (sports utility vehicle), a government panel on low carbon strategies Monday remained unclear about imposing tax on diesel vehicles.

The expert group on low carbon strategies for inclusive growth set up by the Planning Commission under the leadership of Kirit Parikh in its interim report Monday suggested low carbon pathway at 8 to 9 percent of growth for the 12th Five Year Plan (2012-17).

“Given differential fuel efficiencies and fuel taxation, if the government desires, it could consider imposing an upfront tax on personal vehicles to absorb the benefits accruing from differential taxation while passing on fuel efficiency benefits to the consumers,” the report noted.

However, some members of the group felt such an up-front tax would be unfair to the manufacturers as up-front costs are an important determinant in vehicle choice, it further said.

“It may be better to simply get rid of the relative distortions in fuel pricing by letting petrol and diesel be priced on the same footing, and letting fuel efficiency and technology govern the choice of vehicle for consumers,” it said.

Parikh said there is heavy tax on petrol and no tax on diesel, and some kind of tax on diesel vehicles has been suggested but there has been differences in the group.

The report looks at five broad areas - power sector, transport sector, industry, buildings and forestry.

The group has suggested some fuel efficiency measure in each of the sectors but have not yet worked out the costs associated with these measures, policy interventions required to adopt these measures and the kind of technology required.

The 34-member group was constituted in January 2010 to conform to the country’s commitment to transform into a “low carbon” economy.

India had announced voluntary targets to reduce the emissions intensity of its gross domestic product (GDP) by 20-25 percent to the level of 2005.

The recommendations made by the group are to be included in the 12th Five Year Plan (2012-17).

Nitin Desai, former under secretary-general of Economic and Social Affairs at United Nations, Ajay Mathur of the Bureau of Energy Efficiency, Jamshed Irani of Tata Sons and Pawan Goenka of Society of Indian Automobile Manufacturers (SIAM) are among the other members of the group.