A bevy of proposals are doing the rounds of transport division in the union urban development ministry which have the potential to deal a body blow to both consumers and car manufacturers alike.
There is a proposal to tax every second car in a household. It will attract a cess over and above road tax and value-added tax VAT.
The proposal a major dampener to car owners in metros like Delhi and Mumbai,where 30-40 lakh cars ply,is currently being deliberated by state governments also. Incidentally,the government thinks the proposal will help meet its two long-term objectives of curbing usage of private vehicles to control traffic congestion in cities and popularising public transport.
Another salvo that8217;s being deliberated upon by policy makers is making renewal of driving licences every year mandatory. Now,this could well become a major dampener if some bit of consensus is built upon the draconian proposal. Driving licences are issued for 10-20 years.
While strict enforcement of traffic rules is a key driver for the new norm,the government also intends to get more money in its coffers in terms of licence fees. The model is borrowed from Brazil where the proceeds are used for beefing up urban transport infrastructure.