Panel suggested Increase in Excise Duty & Registration Costs on Diesel-powered Vehicles

Panel set up by the Ministry for Urban development headed by Joint Secretary in the Ministry in charge of Urban Transport S.K. Lohia suggested an increment the excise duty and registration costs on diesel-powered private vehicles. It also suggested a ban on hoardings on pedestrian walkways and cut down the taxes on buses and other public transport vehicles as part of measures to make cities and towns more socially and environmentally sustainable.

The panel was formed to work out the parameters for the urban transport segment under the recently launched National Mission on Sustainable Habitat. It suggested an increase in the excise duty at the national level and registration costs at the State and city-levels for diesel-propelled private vehicles. It argued that increased use of diesel vehicles was only adding to the burden of particulate matter and nitrogen oxides, key pollutants of concerns in Indian cities, even while defeating the objective of improving the country's energy security.

The panel pointed out that hoardings on pedestrian walkways were posing major safety hazards. The State and city governments could, instead, earn their revenues by going for advertising on public service amenities such as buses, metro trains, commercial passenger vehicles, bus shelters, metro shelters, public toilets and public garbage facilities.

The panel pointed that the total tax burden per vehicle km is 2.6 times higher for public transport buses than cars in India. It suggested that the State and city governments could go in for cascade registration tax for owning more than one private vehicle.

The panel has also called for a re-orientation of the urban transport planning to give pedestrian traffic as much importance as other modes of transit.

The Ministry for Urban development organised a national consultation workshop for a discussion on the report of the panel on 21 September 2011.