Taxing times for Cars

It has just become more expensive to own a second car in Hyderabad. Life tax has been increased by 3% for owning a second car ostensibly to discourage people from adding more cars to the already congested roads. The higher life tax is applicable to even those people who already own a two-wheeler and want to buy a car. The authorities think that traffic problems can be solved with this move and something had to be done in that regard. This is a half hearted measure that is too little too late without giving adequate thought to the overall issue.

India is perhaps one of the few countries that has remained insulated to the all time high crude oil prices. Petrol prices don’t go up when crude prices go up because of political concerns over public backlash or negative vote in any of the interminable elections in the country. It is rather shocking that in India people are going for bigger cars even as oil prices keep going up. There is a need to limit the size of the cars in the interest of fuel efficiency, lower pollution and to avoid congestion on roads. Government of India has rightly provided lower excise duty on small cars about couple of years back. Although, the foreign car makers protested initially they have responded to this initiative with new small cars like Chevy Spark from General Motors and i10 from Hyundai.

An independent initiative to develop a revolutionary small car prized at Rs 1,00,000 is the TATA Nano that has been unveiled on Jan 10^th at the Auto Expo in Delhi. The Nano is appropriate for India and only an Indian company can take the bold initiative to develop it despite the doubting thomases and nay sayers and the detractors. The Nano will herald higher safety on the road in India as it will give an option to families riding two-wheelers with small children. The Nano can be hailed as an alternative to Autorickshaws which should also be subjected to the same safety standards as cars. The Auto is a product of famous India ‘Jugaad’ made by Bajaj Auto under the erstwhile license and permit raj with least concern for environmental pollution and safety of the driver / passengers.

Bigger cars and SUVs mean big profits for auto companies and though they are fuel inefficient and bad for the environment. The higher life tax should selectively target the petrol / diesel guzzlers like the TATA Safari Dicor, Chevorlet Tavera, Mahindra Scorpio, Honda CRV, Mitsubishi Pajero, Toyota Innova and Land Cruiser and a host of other desi and imported SUVs. It is crime to allow import of SUVs like the Hummer which probably gives a mileage of 3km a litre. Government of India can impose a non-tariff barrier on the import of these SUVs by setting a minimum mileage limit and this cannot be challenged even in the WTO after all it will be good for the environment. It will also be part of developing countries response to climate change mitigation that has caught the imagination of the whole world.

These big cars and SUVs should be charged higher parking fees and should pay a Carbon Tax that should be collected every year along with the insurance (based on mileage recorded) so that they owners feel responsible through out the lifetime of their ownership.

I personally feel owning a two-wheeler and a car could be encouraged as the owner will have the choice of using the car when traveling with the family rather than the couple and the kids riding the two-wheeler which is totally unsafe.

What we need is better public transportation – buses, metro rails, car pooling etc. Over 10,000 vehicles are being registered in Hyderabad every month. The congestion will get worse inspite of the flyovers and the metro rail or the bus rapid transit system. We need drastic measures to overcome drastic situations and I suggest the following bold initiatives to contain the menace of traffic growth:

1) Keep Autorickshaws off the road once a week (just imagine how peaceful it is on those days when the Auto drivers go on strike)

2) Keep cars over 1000 CC off the road once a week (to encourage ownership of small cars) or allow cars ending with odd number only on odd days and cars ending with even number only on even days (this will encourage car pooling)

3) Enrolment of a child in school must be conditional upon the parents living within a 10km radius from the school.

4) Give an extra allowance to employee who walk or cycle to work or an incentive to employees who live within 10km from their workplace.

5) Inter city buses and outstation lorries must not be allowed within city limits between 7am to 10pm. Inter city buses must be terminate outside city limits and ferry passengers to the city with smaller buses or taxis or autos.

6) Increase the daily working hours and make it a five day working week for offices.

7) Earmark places for markets and vendors to stop encroachment of the roads by vendors.

8) Build some parking ramps near important market places like Charminar, Abids, Ameerpet etc. Places like Charminar should be made completely pedestrian places.

9) Lastly, invest in metro rail and bus rapid transit systems.