Environment and Forests Minister Jairam Ramesh today decided to take on diesel automobile manufacturers and those driving sports utility vehicles (SUVs) and called for a rejig of the subsidy regime.
At a workshop on promoting low-carbon transport, Ramesh said driving SUVs in countries such as India was "criminal" and such diesel-driven cars should be penalised.
"The luxurious growth of large-size vehicles like SUVs is really a growth of concern. The use of vehicles like SUVs and BMWs in countries like India is criminal. There should be a reformed diesel policy as the real beneficiaries of the diesel subsidy are the owners of the BMWs, the Benzes and Hondas and not farmers," Ramesh said.
He further said the country was subsidising diesel, and added: "We have reformed the policy as far as petrol is concerned but we are yet to reform the net effect of diesel subsidy. The subsidy in the social security sector should be really for LPG (liquefied petroleum gas) and kerosene. We seriously need to think about our fuel policy regime."
Industry did not seem to share the minister's concerns. "Diesel today is a highly clean technology. There is no reason why diesel cars should be discouraged. We are in agreement with Jairam Ramesh that subsidies on diesel should be withdrawn, and the fuel should be freed to be regulated by the market. But doing away with diesel would mean discouraging improvements made for reducing carbon dioxide emissions," said Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers, the main industry lobby group.
While the Indian automobile sector has grown by 32 per cent during the first half of the financial year, the SUV segment has expanded by 21 per cent during the period. Anticipating further growth in the segment, particularly for high-end SUVs, auto makers are lining up launches and expanding their portfolio.
