What the Union budget should do

1. Crisis of mobility What the Union budget should do Centre for Science and Environment January 16, 2008

2. In the beginning of this winter we said Delhi has taken major steps to clean up its air………. … ..and yet its air is getting dirty again

3. 2000-04: Delhi made the first quantum leap but it is still struggling… On fuel quality Introduced low sulphur fuels and p etrol with 1 per cent benzene Mandated pre-mix petrol to two - and three-wheelers On vehicle technology Enforced Bharat staae II emissions standards in 2000, five years ahead of schedule (BS III in 2005) On alternative fuels Implemented largest ever CNG programme Largest ever public transport bus fleet on natural gas Other cross cutting policy measures Capped the number of three-wheelers Phased out 15 year old commercial vehicles Strengthened vehicle inspection programme (PUC) Efforts made to bypass transit traffic Set up independent fuel testing laborator ies to check fuel adulteration

4. Winter of 2007. Its smog. Still air, dust, smoke, low visibility…lungs are choked again… Source: CSEi Daily average levels Monitoring at ITO, Delhi (Aug to October 2007)

5. Deadly particles: After a short respite the curve turns upward Source:CSE

6. NOx levels: rising steadily Source:CSE NAAQS (R) 60 microgram per cubicmetre

7. Air pollution is now a national crisis

8. It is time… … we understood the crisis of numbers……

9. Our tax proposal for sustainable mobility…….. Our proposal to the Finance Minister……… 1) Remove central excise duty on buses and provide guidance to the state governments to correct the current distortions which tax the bus more than the cars… 2) Do not reduce the current excise duty on cars and SUVs and also maintain the differential between small and big vehicles 3) Increase the excise duty on diesel cars to provide the needed disincentive for the growth of personal vehicles on cheap diesel 4) Revise the central excise duties to link to fuel efficiency and advanced clean emissions norms once the fuel economy standards for vehicles are in place

10. 1) Why zero excise on buses?

11. It took 30 years to reach the first million mark for personal vehicles in 1971. Another 20 years to add two more million Then in 10 years (1981-91) increased by 14 million Another 10 years (1991-2001) – jumped by 28 million This decade just in four years (2001 to 2004) we have added 16 million Explosive numbers Source: Computed on the basis of MOSRTH motor vehicle registration data Vehicle registration in India : India’s urban population has grown 4.6 times, vehicle numbers have increased 158 times

12. In 1951, buses were 11 per cent of total registration. By 2004 roughly 1 per cent and dropping each day…

13. Take Delhi: adds 1000 vehicles each day on its roads..Builds new roads; then expands old; then flyovers, now planning flyovers over flyovers….. Source: Teri

14. Where is the space for more cars? Between 1996 and 2006 total road length in Delhi has increased by about 20 per cent. But cars increased by 132 per cent Delhi has 21 per cent of its area under roads; only quarter of its population own cars; cars and two-wheelers together drive less than 20 per cent of its people -- and yet roads are choked

15. Peak volume traffic has increased phenomenally Nearly 123 per cent growth on many roads (in PCU/hour) Source: Based on City Development Plan of Delhi, 2006, Eco Smart

17. Result congestion…. Peak hour traffic speed plummets…It can be as low as 10 hours per hour in Delhi, or 7 km per hour in Kolkata… Congestion costs can be as high as Rs 3000 to 4000 per year. ASSOCHAM study: the commuting population could be losing Rs 420 million human hours in congestion. Each day 2.5 hours are lost in commuting to destinations. ……… But Budget does not reflect these costs

18. Vehicle Emissions vis-à-vis Speed Vehicles caught in congestion emit several times more

19. Why this crisis? Public transport marginalised……. Over the years share of public transport buses in the total vehicle fleet dwindles drastically from 11 per cent to 1.1 per cent. But buses meet 60 per cent of the travel demand while they use up less than 5 per cent of the road space Cars occupy 75 percent of the road space but meet less than 20 per cent of the commuting demand. Half of our population are too poor, young, disabled, and old to use cars. It hurts poorer households that spend greater share of their income on transport. Also overall, greater share of household income is being spent on transport…

20. MODAL SHARE BY VOLUME AND PASSENGERS CARRIED AT AMBEDKAR NAGAR Volume of bus and bicycle traffic is significant and growing Non motorised vehicles Motorised vehicles BUS 8 61 75 20 17 19 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% % PCU % of Passengers carried NMV MV Bus

21. Public transport marginalised……. Impact of motorisation can be severe in smaller cities where public transport is inadequate Share of public transport in different cities

22. Wrong policies discourage buses Total tax burden per vehicle kilometer is 2.6 times higher for buses than cars in India, says the World Bank. Tax correction can encourage buses

23. Subsidy for the rich car owners… State taxes are even harsher….. In Delhi if lifetime tax is amortised for the life of the vehicles then the owner pays roughly Rs 300 as taxes per year. But buses pay for more for carrying passengers. They pay about Rs 13000 per year – 43 times more than cars. . In Mumbai bus occupies one tenth of the road space per passenger compared to personal cars. Cars pay one time registration fee which is only 3.5 per cent of the value. Buses pay hefty annual passenger tax. Cars pay Rs 9000 for life and bus pays Rs 41000 every year.

24. Bus-car policies in states: taxing the poor to subsidise the rich?

25. Make it zero excise on buses…… A complete waiver on central excise duty will stimulate investment and growth in the bus sector This should go with the guidance to the state governments that they should also make similar moves to waive off the state taxes State governments should be encouraged to raise funds through dedicated cess for public transport Public transport can enable significant fuel savings. ADB study projects – Bangalore can save 21 per cent of the fuel consumption public share is increased from 62 per cent to 80 per cent.

26. 2) Do not reduce the current excise duty on cars and SUVs Maintain the differential between small and big vehicles….

27. No further sops…. Already car owners are enjoying enormous hidden subsidies… Paying pittance for road space and parking… If parking charges begin to reflect true cost of investments, parking fee could be as high as Rs 30 to 40 per hour. But actually pay Rs 10 at most. Most cities do not even charge for parking. Do not reduce the current excise duties on cars and SUVs – 16 per cent on the small cars and 24 per cent on big cars and SUVs. This differential in taxes for small and big cars must continue. Higher tax on big; lower on small cars.

28. 3) Increase the excise duty on diesel cars as disincentive for the growth of personal vehicles on cheap and toxic diesel

29. Dieselised Diesel cars, jeep and vans in Delhi 1999: Diesel cars only 2% of the new car sales in Delhi. 2007: Diesel cars are 30% of new car sales 2010: It is projected to be 50% of the sales Red alert on diesel exhaust Agency Probable human carcinogen WHO IPCS (1996) Probable human carcinogen IARC (1989) Potential occupational carcinogen NIOSH (1988) Potential to cause cancer HEI (1995) Toxic air contaminant CARB (1998) Likely human carcinogen US EPA (2002)

30. Diesel cars: More losses One diesel car emits as much NOx as 3 to 5 petrol cars; PM as much as 7 petrol cars --- But Central government earns Rs 15.18/litre from every litre of petrol and Rs 5.20 per every litre of diesel. -- Due to crude oil price hike oil companies lose Rs 3.64 per litre of diesel and Rs 1.72 on petrol --- Lower excise concession on small diesel cars further adds to the subsidy

31. Take away economic incentive for diesel…… Ideally price of diesel and petrol should be equalised…but unrealistic given the constraints of different economic groups… …… .But this is a loophole Increase excise taxes on diesel cars to 32 per cent.

32. 4) Link taxes to fuel efficiency and advanced clean emissions norms once the fuel economy standards for vehicles are in place

33. Use taxes to build markets for cleaner and efficient technologies Government is working on mandatory fuel efficiency standards for vehicles. Bureau of Energy Efficiency has the mandate to finalise standards. In the future vehicle taxes should be revised so that they are linked to efficiency. Grant tax concession to advanced and efficient technologies like hybrids, battery operated, alternative technologies which meet emissions standards before due date of implementation