India’s ranking on the Doing Business indicators may have improved a tad, but the business community will be forgiven if it continues to harbour doubts after the Supreme Court’s decision to allow diesel cars with engines over 2000 cc to sell in the National Capital Region (NCR) subject to a one per cent retail cess. The apex court’s order was in response to a public interest litigation (PIL) that sought stringent action to control rising pollution levels in the national capital. One of the puzzling elements of this decision is how the apex court can order a cess, which is surely the prerogative of the executive (and a hearing on the issue is scheduled next week). Judicial overreach has been a matter of concern for some years, and nothing exemplifies the risks of this trend than this decision. The only saving grace in this regard is that the court has clarified that there would be no retrospective change in the rate of the green cess.
The question that flows from the order, which reverses a seven-month ban on diesel vehicle registration in the NCR by the National Green Tribunal, is whether it will lessen pollution. The diesel car manufacturers are happy to see an end to months of uncertainty in the country’s largest car market — last year’s ban had adversely impacted a number of car companies as well as dealers, some of whom also saw employee exits. Yet, there are doubts as to whether a cess would make NCR’s citizens delighted beneficiaries of cleaner air. A study conducted by IIT Kanpur showed that diesel vehicles are the most consistent source of pollution throughout the year. Besides, experts have found that one diesel car emits pollutants equivalent to five petrol cars, six diesel cars emit pollutants equal to one diesel bus and nine diesel cars emit pollutants equal to one diesel truck. Besides, popular diesel cars in India have been found to be emitting six to 12 times more than what was permissible. On emission of particulate matter, it is more or less established that diesel is a bigger emitter than CNG or petrol. Besides, diesel emissions are of smaller particulate matter — and therefore more harmful to the lungs.
The arbitrary nature of last week’s order is open to question on many other counts. First, if it is accepted that diesel is a harmful emitter per se, why have cars with engines less than 2000 cc been excluded? Indeed, if it is assumed that a large proportion of the sports utility vehicles in the NCR are bulk people carriers, then the emission per person for such cars is lower than that of smaller diesel cars. Second, it is uncertain how far the buyers of a luxury car, paying anything between Rs 10 lakh and Rs 75 lakh, will be deterred by a one per cent increase in cost.
A better synchronisation of standards and policy would benefit carmakers much more than an impost. Finally, it is unclear how the money collected from the cess will be spent since the government typically does not provide such details. On balance, it is hard to escape the view that considered thinking has not gone into the court’s decision.
