The Kirit Parikh Committee has recommended a hike in the excise duty of diesel cars to the government and it is highly likely that the Ministry of Petroleum will be pushing for this hike in the upcoming budget. Currently, a ‘war’ is raging on within the government and in the Parliament regarding the subsidies government give to diesel. That is why, the Kirit Parikh committee was appointed by the government to look into the issue of petrol and diesel cars and make an attempt to strike a balance between the two and suggest necessary measures for the same. Now the committee has suggested a hike of almost Rs.80,000 in the excise duty of diesel vehicles in one go.
Car manufacturers are waiting with bated breath to see the next move from the government in this regard. For instance, Maruti Suzuki is one company which would be looking at these developments very carefully. The company has already announced a diesel version of its Swift hatchback. If the government ultimately decides to accept this proposal then it will be a big blow to the plans of Maruti Suzuki and other auto manufacturers who are planning diesel variant of their vehicles for the Indian market.
With the constant hike in petrol prices, it is only the diesel cars that are providing some sort of growth to the Indian auto market. Currently, the ratio of diesel and petrol car sales in India stands at 80:20, heavily in favour of diesel cars. This recommendation, if accepted, could well be a death sentence for this industry in India. All we can say that the government needs to tread cautiously before accepting such regressive recommendations.
