India needs to discourage the production of large cars, which are not only costly but also have social costs associated with them
The then Union Environment Minister Jairam Ramesh (UPA regime) had once rightly termed SUVs as ‘Socially Useless Vehicles’ misusing diesel subsidies for the elite rich capable of purchasing these luxury vehicles. Earlier the then Delhi Chief Minister Shiela Dixit had also insisted on discouraging big cars which occupy more parking space and road-traffic share. India needs an altogether new car policy whereby the production of big and costly cars may be practically discouraged. Rather it is time that an improved version of auto-rickshaws with provision of air-conditioning may be introduced in the market so that at least middle-class people may like to switch to such air-conditioned auto-rickshaws which will occupy less road and parking space apart from being eco-friendly because auto-rickshaws are now either electric-charged or having CNG-engines. It may be recalled that once the Mexican Ambassador to India in Delhi preferred a private luxurious auto-rickshaw rather than any luxury car.
It is beyond understanding why and how authorities and certain individuals prefer promoting car manufacture in India as if cars are basic necessities rather than a luxury. There are so many other sectors of use for commoners where production should be increased like laying down metro-network in more and more cities. Car manufacturers then can switch over to producing metro coaches for which efforts should be made to get export orders also. They can also utilise their production capacity for the manufacture of three-wheeler auto-rickshaws including air-conditioners.
All such steps may be taken to discourage the manufacture of costly cars with ex-showroom prices above rupees ten lakhs (inclusive of all taxes) in the country. GST along with cess, road tax, insurance-premium and all other levies may be doubled on costly cars than cars with ex-showroom prices of less than rupees ten lakhs. Categorisation of cars should be based on ex-showroom price rather than length and engine capacity.
There should be a complete ban on loans for cars having ex-showroom prices above rupees ten lakhs. Costlier cars are nothing but status symbols, and status-conscious persons must be paying heavily for their show of status in society. Also, import duty on imported cars should be quite high to discourage the import of foreign-made cars. It is observed that there are tax disputes on paying import duty on imported cars gifted to Indian celebrities who are otherwise extremely rich. Complete import duty should be charged on imported cars received as gifts from foreign elements by Indians.
All government purchases of cars (central, states and their undertakings) may be compulsorily from economy-range of cars. However, exceptions may be for cars used by President, Vice President, Prime Minister and foreign dignitaries coming to India. Telangana government in the year 2021 was criticised, and rightly too, for the purchase of a fleet of 32 new luxury cars priced at rupees 30 lakhs each for use of Additional Collectors.
The then Maharashtra government approved the purchase of six luxury cars each costing rupees 22.83 lakhs with a total expenditure of rupees 1.37 crores for its Education Department during the corona-period in the year 2020 that too with the state facing financial crunch when the government should have concentrated more on fighting corona. It is time that suggested air-conditioned auto-rickshaws replace cars for use in government departments and their undertakings. Cars must not be sold with GST subsidy through Canteen Stores Departments for army personnel.
Diesel engines must not be allowed in cars of any category. With petrol and diesel having procurement prices almost the same, diesel is deliberately priced lower because it is used for public transport and goods carriers. It is a misuse of lower-priced diesel to allow it to be used for cars. Supreme Court-appointed Environment-Pollution-Prevention-Control committee headed by Bhurelal rightly suggested a total ban on non-CNG cars in Delhi. However odd-even system for plying cars as suggested by the Committee may cause big problems for middle-class people.
Affording rich will purchase more cars separately registered in odd and even numbers to counter the move. With the lack of infrastructure in the public transport system in Delhi, the best way is to remove any type of capping on a number of auto-rickshaws in Delhi in the interest of middle-class people. This will bring an adequate number of auto-rickshaws onto roads negating the usual behavior of auto-drivers in not going according to meter-reading or denying going to required destinations.
Already US giant Ford has also been compelled to discontinue the manufacture of cars due to mounting losses. The idea should be to discourage other foreign car manufacturers in India and also to shut down production so as to save Indian money going to foreign countries. Instead, every step should be taken to encourage the export of cars manufactured by Indian companies to other countries.
Car-scrapping policy to compulsorily abandon 10-year-old diesel cars and 15-year-old petrol cars in cities like Delhi in the name of curbing pollution is indirectly promoting the car-industry in India. Pollution can and should be controlled by making it mandatory for each registered workshop for every type of vehicle to compulsorily install pollution-checking machines where every vehicle going out of workshops must be given check-out with a pollution certificate.
Rather such pollution-checking-service and certificates should be provided free-of-cost by automobile workshops because it is not very costly. Presently if a vehicle fails in pollution-checking at the pollution-checking-centre, then it has to be first taken to some automobile, and then again driven to the pollution-checking-centre with a cycle repeated till the vehicle passes the pollution-checking test.
It should be made compulsory for each vehicle to be computerised and checked for fitness by authorised workshops of car manufacturers every ten years. Cars failing to test and not fit for necessary modification can be ordered to be scrapped. The present scrapping-policy of compulsorily scrapping cars after 10 years in respect of diesel cars and 15 years for petrol cars is very harmful for those especially senior citizens sparingly using their cars. Different-coloured number plates can be introduced for cars found fit for use after an initial ten years.
Too many variants of any car model confuse customers. There may be just two variants apart from the third with automatic gears, one basic Lx for economy customers and the other Vx with all company-fitted extra accessories and luxuries for affording customers. There is no sense in having too many confusing variants like Lx, Lxi, Vx, and Vxi for the same model. India being the biggest consumer-market amongst nations with free economies, has certainly the power to dictate its consumer-friendly terms for global market leaders collaborating car-manufacture in India.
Union government should induce standardisation of common accessories like tyres and batteries so that the same parts may be used in different models of cars produced by various car manufacturers. It will heavily bring down the cost of consumables through their bumper production in extra large numbers in some limited sizes and specifications. It can be achieved by merging some nearing sizes and specifications. Such guidelines though also mentioned in the auto-policy of the Union government, are never followed in actual practice.
Extra-ordinary heavy prices of car spares provide heavy profit to car manufacturers for which they have monopolies. The study can prove that a new car assembled from new spare parts purchased at maximum-retail-price will cost much more than the price of a new car purchased from a car-dealer at an ex-showroom price. The National Anti-Profiteering Committee under the Department of Revenue of Central Government should ensure that car manufacturers may lower the prices of car spares with some reasonable margin only.
(The writer is a Guinness world record holder and an RTI consultant, views are personal)
