Budget: RoadMin may demand duty cut on clean fuel vehicles

Ministry may ask for an allocation to the tune of Rs 35,000 crore in the current fiscal

The Road Ministry may pitch for lesser levy on vehicles using cleaner fuels and duty exemption on purchase of public transport besides seeking an allocation of Rs 35,000 crore in the upcoming Budget.

The Road Ministry, which was allotted Rs 23,000 crore in the provisional budget, is likely to ask for an allocation to the tune of Rs 35,000 crore in the current fiscal," a source in the know told PTI.

The wish-list includes excise duty relief on purchase of public transport vehicles by state transport or private utilities. The Ministry may also seek 2% excise duty on electric or hybrid cars and vehicles using biofuels, sources said.

At present, electrically operated vehicles attract excise duty in the range of 2-27%.

Lesser levy on bio-fuel based vehicles is likely to encourage use of cleaner fuels.

The budget allocation for the Road Ministry for the 12th Plan period (2012-17) is Rs 1,44,000 crore, of which Rs 38,000 crore has been spent so far.

The Ministry requires a budget of Rs 35,000 crore in FY 2015, Rs 40,000 crore in FY 2016 and Rs 45,000 crore in the FY 2017, sources said.

In the interim Budget, excise duty on small cars, scooters, motorcycles and commercial vehicles were cut to 8% from 12% earlier.

The same for SUVs was slashed to 24% from 30%, while on large cars it was reduced to 24% from 27% and mid-sized cars to 20% from 24% earlier.