NaMo budget on transport and pollution: Green expectations - Dashed hopes

NDAÔÇÖs maiden budget upholds and supports UPAII blunders to protect the automobile industry while ignoring the perils of dieselisation and vehicle growth

By Anumita Roychowdhury
Published: Thursday 10 July 2014

NDA’s maiden budget upholds and supports UPAII blunders to protect the automobile industry while ignoring the perils of dieselisation and vehicle growth

Great expectations of “achhe din” for urban transport and healthy cities dashed just as the maiden budget speech was read out by the new Finance Minister, Arun Jaitley, today. This maiden budget was expected to set the vision, principles and intent of the new Bharatiya Janata Party (BJP)-led National Democratic Alliance regime in addressing motorisation, pollution, and energy guzzling in the transport sector. But unfortunately the “defining” line of the new proposal is – “think small, and do little”.

Unthinkable is the political readiness of the new government to maintain status quo and implicitly endorse the lame duck United Progressive Alliance-II (UPA-II) budget of Mr Chadambaram last year when he had given across-the-board cut in excise for all types of vehicles including the highest ever cut for fuel-guzzling and polluting diesel SUVs. Mr Jaitley has chosen to uphold and support UPAII blunders to protect the automobile industry while ignoring the perils of dieselisation and vehicle growth based on outdated technology and poor quality fuels.

Equally damning is the complete disregard of fiscal strategy for the refinery sector to help produce “clean fuels” which is part of original promise of the BJP manifesto. The new Auto Fuel Policy Committee has recommended 10 ppm sulphur fuel nationwide by 2020 to allow use of advanced emissions control systems. But the committee has also tagged conditions of fiscal support to tide over the cost of Rs 80,000 crore of refinery upgradation. The committee has proposed a small cess on each litre of petrol and diesel sold for additional revenue to meet the refinery costs. But official response to this public health imperative is that of sheer indifference.

A package of differentiated cess on per litre of diesel and petrol sold and an environment tax on diesel cars based on the “polluter pay” principle could have created a dedicated fund to improve refinery technology to produce clean fuel. This national fund could have been subsequently used to fund public transport as well. The finance minister has clearly not considered any innovative fiscal strategy to stimulate investment to fast track production of cleaner fuels to help meet the tighter standards. Hopefully, the investment proposal to expand natural gas pipelines will open up opportunities to expand natural gas vehicle programme in the country.

Promises not kept

The most serious breach of promise is the volte face on affordable public transport. The galore of election promises made for efficient public transport and its integration, and discouragement of personal transport in the BJP manifesto have left no mark on the budget proposal. The Rs 100 crore proposal for two metro lines in Ahemedabad and Lucknow, that can barely cover the cost of feasibility studies, is a populist gimmick. The budget has nothing to offer in terms of scaled up efficient and affordable public transport system for the urban majority. It is an irony that only a couple of days ago the government gave out its poverty formula to say that every third Indian is poor and urban poor can spend only Rs 47 per capita a day. Yet there is no proposal to scale up affordable transport in cities.

The “Gujarat model” has been quoted liberally for the sanitation sector but not for Ahmedabad’s bus transport modernisation programme that increased modal share of public transport ridership in the city from a mere 4 per cent in 2004 to 16 per cent now. Central assistance for bus transport reforms is not even on Mr Jaitley’s agenda. The government could have launched a million bus programmes and reforms, and eliminated tax burden on buses. Buses (that occupy twice the road space taken by a car but carry 40 times the number of passengers, and emit several times less per person) could be a game changer.

Missed opportunity

The budget speech talks big on “new accounting standards” for the corporate sector to align with international best practices. But the government has missed the opportunity to leapfrog to new gen fiscal principles for its own accounting methods to calibrate against sustainability principles, to account for public health and sustainability in fiscal policy. The new government remains clueless, like all others, about balancing the costs and benefits of regulations; use of market-based instruments to shift markets and change behaviour; minimise trade-offs; and recover environmental and social costs through tax measures.

The finance minister has clearly not paid heed to even his own ministerial colleagues who have cautioned on air pollution, motorisation and public health challenges. Only yesterday the new environment minister Prakash Javadekar had expressed concern over the increase in use of diesel despite the gap between the prices of petrol and diesel being reduced. He had hoped that people would switch over to petrol vehicles and diesel standards could be upgraded to cut pollution.

Moreover, the new health minister, Harsh Vardhan, had despaired in an article written in Hindustan Times just before taking oath – “Why is there no reaction to the World Health Organization’s May first-week announcement about Delhi’s skies being the most polluted in the world? This collective indifference of a great mass of people to the certainty of their doom has few parallels in world history.”

Exactly our question, Mr Finance Minister. This ‘indifference’ is surely unparalleled.

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