Exorbitant taxes in the name of Public Transport

A Planning Commission working group has suggested a green surcharge of Rs. 2 per litre of petrol and green cess of 3% on the annual insured value of all private vehicles and a steep urban transportation tax to be collected at the time of purchase of private vehicles. The panel was headed by Delhi Metro Chief E Sreedharan has also suggested an urban transportation tax at 7.5% for all new petrol vehicles and 20% for new diesel vehicles.

The principle behind the exorbitant taxes being that the it would discourage use of private vehicles. The idea then is to shift everyone to public transport. This move is backed by the colossal investment needed in the urban transport sector which the Centre will not be able to meet from traditional budgetary sources. A host of other taxes such as land monetization, land value tax, hike in property taxes, congestion tax, a cess on sales tax and hike in parking charges are aimed at being made the channels of mobilising funds for the urban transportation.

It is estimated that the new surcharge and taxes will help the government generate Rs 2,35,741 crore in the 12th five year plan (2012-17) and Rs 22,40,804 crore over 20 years.

While all of the ideas mentioned above are going to cause a massive financial strain on the people of this country the Planning Commission working group has failed to address more immediate issues. If they do implement all the various taxes and impose more taxes on petrol which is already heavily taxed, it will over burden the consumer severely. And, when almost all Indian cities simply do not have the infrastructure to provide convenient and necessary public transport for the people of India, just how exactly does this ‘Planning Commission working body’ expect our citizens to go about their business when they simply cannot afford all the major hike in taxes.