Abolition of excise duty on public transport sought

In order to encourage more people to use public transport, Ministry of Urban Development today demanded abolition of excise duty on public buses.

“We have submitted a proposal for reducing the excise duty on buses meant for public transportation to zero level to the finance ministry,” Urban Development Minister Jaipal Reddy said here while addressing the National Conference on the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Urban Mobility India 2008.

“Last year, it (excise duty) was reduced to 12 per cent from 16 per cent. But we want it zero per cent to encourage public buses as a mode of popular transportation in cities,” Reddy said. Pointing out that most of the cities do not have an organised city bus service, he said movement of goods and people has been facing several problems of congestion, pollution and accidents, coupled with lack of coordination among various agencies.

“Unless these are remedied, poor transportation of goods and people can become a major hurdle to economic growth and cause deterioration to the quality of life,” he said.

Stressing the need to switch over from personal vehicles to public transport, Reddy said, “If we provide attractive options of public transport it will persuade the urban commuters to shift voluntarily to the public transport systems.”

Till now over 1,000 projects worth Rs 45,000 crore have been sanctioned for infrastructure development in cities and towns under the JNNURM.

“The JNNURM is reform-oriented and since the launching of the project on December 3, 2005, majority of the states have scrapped Urban Land Ceiling Act as a move to expedite urban reforms. Stamp duty has also been reduced to 5 per cent from 12 per cent,” Reddy said.

Making an assessment of the capital investment requirements, he said: “Funds to the tune of Rs 3,35,000 crore will be required to cater to the basic urban infrastructure needs of all 63 cities under the JNNURM. So there is a need to tap private capital for execution of the projects.”