[sustran] India's Planning Commission working group suggests 'urban transport tax' on purchase/ use of private vehicles

[Pooja Sanghani]

source:
http://timesofindia.indiatimes.com/india/Now-a-green-cess-on-petrol-cars/articleshow/11099730.cms

NEW DELHI: Buying and running cars and two-wheelers could soon become a
costly affair with a Planning Commission working group suggesting a green
surcharge of Rs 2 on every litre of petrol, a green cess of 3% of the
annual insured value of all private vehicles and a steep urban transport
tax to be collected at the time of purchase of private vehicles.
The panel, headed by Delhi Metro chief E Sreedharan, has suggested urban
transport tax on purchase of new cars and two-wheelers at 7.5% of the total
cost of petrol vehicles and 20% in case of personal diesel cars.
The recommendations, which are guided by the "polluter pays principle", aim
to discourage use of private vehicles by imposing higher taxes and also
help generate resources to fund public transport projects.
It is estimated that the new surcharge and taxes will help the government
generate Rs 235,741 crore in the 12th five-year plan (2012-17) and Rs
22,40,804 crore over 20 years.
It was decided not to impose the green surcharge on diesel considering the
fuel's multiple uses and the problems in dual pricing. However, this was
offset with the higher urban transport tax on new diesel cars at 20%
compared to 7.5% for petrol-driven variants.
The annual green cess of 3% is proposed to be collected through insurance
companies. These firms, which collect around 4% of the insured value of the
vehicle as annual premium, will now collect 7% and pass on the additional
3% to the government.
With huge investment needed in the urban transport sector which the Centre
cannot meet from traditional budgetary sources, innovative financing
mechanisms were being explored, an official said. Even public private
partnership projects could only partially meet the funding needs, he added.
The resources mobilised from the new surcharge and taxes will be pooled in
a dedicated national urban transport fund to meet the growing needs of
urban transport.
The working group also suggested dedicated funds at the state and city
level through resources like land monetisation, betterment levy, land value
tax and hike in property tax. It also recommended imposing congestion tax,
a cess on sales tax and hike in parking charges to generate resources for
the fund.
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-- 
Pooja Sanghani (Ms.) | Program Officer, Our Cities Ourselves
Institute for Transportation & Development Policy
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