General Motors India and the auto industry regulatory body, Society of Indian Automobile Manufacturers (SIAM) have condemned the proposal of imposition of vehicle taxes on diesel vehicles calling it a retrograding step and have rather suggested the Indian government to hike the price diesel fuel by Re.1 in a bid to the offset the unstable market demand.
Recently, the petrol fuel price witnessed a shoot up to the extent of Rs.78 per litre while the prices of diesel fuel remained unchanged at Rs. 40 to Rs. 45 per litre. Owing to this, the auto market saw a sudden shift in the buyers demand in favour of diesel powered vehicles leading to drastic cut in production and sale of petrol vehicles. This deviation in fuel prices led to a catapult in diesel vehicle demand by 85 percent with dip in petrol vehicle demand to a meagre 15 percent.
Mr. P. Balendran, Vice-President, Corporate Affairs, General Motors India, was quoted as saying, "We as well as Society of Indian Automobile Manufacturers (SIAM) has recommended, a hike in diesel prices by Rs 1 per litre as it would help government earn Rs 6,000 crore revenue." He further said that the government’s revenue earnings from the Re.1 diesel price hike will be over three fold greater than the earnings that would generate from imposition of 5 pc vehicle tax on diesel cars.
The automaker has thereby recommended on behalf of the auto industry to reduce the petrol price and hike the price of diesel fuel in smaller proportion to ensure equilibrium in the market demand. GM India is considering the price stabilization as a right approach to boost up the sluggish market scenario.
