The big fuss about BS-IV vehicles

Arbitrary decision can seriously injure the claim of India as high-potential investment destination

Toward the end of March, the media and activists highlighted the so-called irresponsible behaviour of the auto industry regarding BS-III/IV. I feel that there is a need to present a more balanced perspective on the whole issue.

To be fair to the industry, it never questioned the deadline of April 1, 2017, as the date of “manufacturing”. No request for deferment or delay. It was a part of an emission road map of over a decade which ensured smooth transition to the next level of emission technologies. There was no debate, no dissent. Then, why was an unnecessary fuss created?

The fuss was about the sale of 8.2 lakh BS-III vehicles post-April 1 as against a monthly production of 22 lakh. Just 10 days’ stock of production; they would have added a pollution load of just 0.4 per cent across the country (not in Delhi). Or was it a matter of some convoluted principle that anything that adds even an iota of emissions would be banned regardless of any cost-benefit considerations? If it was the last, I can think of a host of products and activities that create much more pollution and deserve to have been banned by now, and have also shown visible results.

India is emerging as a leader in the automobile industry. It’s a success story post-liberalisation. Usually over 15,000 dealers hold 45 days’ stock. In March, BS-III stock had declined to only 10 days. The rest were all BS-IV. They mostly consisted of commercial vehicles and two-wheelers, mainly in rural areas. Their sales were affected by demonetisation. Meanwhile, BS-IV autos were already being supplied in several cities since 2010 which dispensed appropriate fuel. To meet the deadline, the industry had a couple of months earlier started manufacturing BS-IV and scaled down the production of BS-III. The OEMs’ (original equipment manufacturers) annual production plan is shared by the local vendors—in tier-I, II and III cities—and foreign suppliers. Any change in schedule needs lead time of four-eight months. Some car manufacturers had switched to new norms much earlier. Most of the new models were already BS-IV compliant. They could do so as relevant fuel was available in cities. Commercial vehicles had to deal with lower grade fuel as available across the country. In 2010, BS-IV fuel supply was introduced in select cities. It took seven years to cover all of India. It’s ironical that we accept oil companies taking up to seven years but go ballistic for selling legally permissible 10 days’ production across the country!

What about cost benefit? Within two days to March 31, the network sold most of the stock with heavy discounts incurring a loss of Rs 6,200 crore. This did not prevent an addition of 0.395 per cent pollution load. Why did the activists make an issue out of a non-issue? To cover up their failure to deal with other contributors of pollution?

Blinkered View: In the last 15 years the focus of the Supreme Court, high court and Environment Pollution Control Board in the NCR, for unexplainable reasons, has only been on vehicular emissions while ignoring other polluters. Photo: Reuters

There is no point in lamenting that the industry was “told” six months earlier that no BS-III vehicles would be sold after April 1, 2017. Industry takes instructions only from the government, which has created the law. Why couldn’t they persuade the government to amend the law? Or did the government taking a holistic view refuse to accept their suggestion? It is amazing that even today the notification regarding the date of manufacture remains unchallenged. In fact as late as March 3, 2017, the ministry concerned clarified that BS-III vehicles manufactured before April 1, 2017, could continue to be sold as was the norm with previous transitions.

Incidentally, the notifications of new safety norms, which include providing air bags, come into effect on October 1, 2017. It also states the date is effective for “manufacturing”. It has not been contested. Maybe to them, safety is not so important.

And this leads me to my next point.

The auto industry all over the world is highly regulated, be it safety, emissions, fuel efficiency etc. Regulations are notified for the next decade through a proper administrative process to be legally enforceable and to make all industry players equally accountable. Complying with notified standards is in the blood of the industry. It is in their genes! They are not used to any deviations suggested by an agency without the mandate. Nothing like what is witnessed here. It is Greek to them. Governments across the world offer a stable policy for investors, who commit billions of investments creating employment opportunities. Such arbitrary acts seriously injure the claim of India as a high-potential investment destination.

Only the government can design sustainable policies and regulations. The judiciary or environmentalists have a constructive and positive role to play by ensuring implementation of government policies. They can influence government policy but not lay down new laws without taking a holistic view of an issue. Had the activists focused with the same passion on withdrawing the lakhs of over 15-year-old and ill-maintained vehicles there would have been visible improvement. Each belches out seven times more pollutants than new vehicles. There is need to focus on public transport, dust, diesel generators, pet coke, burning of agriculture waste and biomass, etc. No one raises a voice against adulteration of fuel which nullifies the latest technology of auto engines. Non-vehicular sources contribute 80 per cent of the pollution.

In the last 15 years the focus of the Supreme Court, high court and Environment Pollution Control Authority in the NCR, for unexplainable reason, has only been on vehicular emissions while ignoring other polluters. This has not yielded any result. Pollution is an all-India issue. Delhi is not India. Fortunately, for the first time a comprehensive action plan is in the works. Nothing less than a national mission mode to implement it will work. It is our responsibility not to let down the young and the generations to follow.

The author is founder and chairman and managing director, Carnation Auto India