FM must take front seat to drive auto sector’s growth agenda
With partial deregulation of diesel prices in fiscal 2012-13, the price differential between petrol and diesel is decreasing, which could result in soft diversion of demand from diesel to petrol cars. Phasing out of subsidy on diesel prices is seen as a major setback for auto players who have already planned huge investments in diesel car manufacturing units. To arrest any further damage to these stakeholders, the government should hold its temptation for introducing an additional duty on diesel cars to discourage diesel usage for non-commercial purpose. The finance minister may drive his agenda on eco-friendly vehicles by granting investment-linked incentives. Steps for implementation of stringent emission norms and incentives on purchase of new vehicles complying with emission norms, support in form of reduced taxes on CNG/ LPG/ hybrid and other alternative-fuel vehicles would also entice people to buy eco-friendly vehicles. Further, thrust on allied sectors such as infrastructure and tourism would also supplement the development of the auto sector.
On the indirect tax front, measures such as 100% Cenvat credit on capital goods in the year of purchase, reduction in excise duty rates, refund of unutilised
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