It also submitted that "Government has already announced the draft policy for 'voluntary vehicle fleet' modernisation programme as it has been recognised that old vehicles are significant contributors to ambient air pollution within the road vehicle sector in May 2015."
Attorney General Mukul Rohatgi told a bench comprising Chief Justice T S Thakur and Justices A K Sikri and R Banumathi that government was mulling providing monetary incentives to old vehicle owners for replacing them with BS-IV standard, and by 2020, there will be vehicles complying with BS-VI standards.
He made these submissions while placing before the bench the affidavit filed by the Ministry of Heavy Industry and Public Enterprise in which it also opposed the suggestion that apex court will determine the amount of green cess likely to be imposed on owners of large diesel vehicles at the time of registration.
The government opposed imposition of cess on diesel cars of engine capacity higher than 2000cc, saying such vehicles are already "highly taxed".
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It further told the bench that the contention that diesel was more polluting was not a reality as each type of fuel has its own advantages and disadvantages.
The ministry said "diesel cannot be isolated to be a bad fuel with dangerous emissions as petrol and CNG are also responsible for emissions which are harmful to human health".
The government has said that under the Central Motor Vehicles Rules it has a "robust mechanism" for testing emission parameters as per which every vehicle manufacturer has to compulsorily submit a prototype of each vehicle made by it for testing at one of the notified testing agencies.
It also said that in the 10 years from 1999 to 2010 as the emission norms were made more stringent, there has been a "drastic" reduction of 76 per cent in particulate emissions from diesel cars and once oil and automotive companies move to BS VI norms, the emissions from such vehicles would be "almost non-existent".
The government has claimed that there has been 88 per cent reduction in hydrocarbon and nitrogen oxide emissions from diesel cars during the same 10 year period and it would drop further to the levels of petrol and CNG vehicles by 2020.
"Automobile industry in the country being the fifth largest sector receiving foreign direct investment is now facing obstacles in the flow of FDI due to ban and is impacting 'Make in India' initiative adversely.
"The ban has led to five per cent de-growth of the industry and further continuance may lead to employment and production loss that will upset manufacturing sector as automotive sector contributes almost half of the manufacturing sector in India," the ministry's affidavit has said.