Of Hybrid Cars and Mixed Blessings
Hybrid cars have been ushered into the Indian market with great fanfare and positive publicity. Such technologies indeed might be lifesavers. The media, however, seems to have gone overboard with its demand for waiver of customs duties on such cars.
Such duty waivers would bring about price-parity between hybrid foreign cars and their conventional counterparts. Hybrid cars, because of their mixed reliance on petrol and electric batteries, cut down fuel consumption by half. Fuel savings, in combination with the mentioned parity would imply that the overall cost of car travel would decline and the car market would expand; and, lo and behold, clogged streets in Bangalore and Bombay would start overflowing.
What is the ideal recommendation in this case? Simple: the trusted and proven combination of carrots and sticks with a reduction but not elimination of customs duties on hybrid cars coupled with higher taxes on conventional ones. The magnitudes of the reductions and increases should be chosen such that hybrid cars become preferable to conventional ones; but not by much so that the overall size of the country’s automobile fleet does not increase.
Food for thought: why don’t the governments in densely populated countries like India, China and Thailand equip their public buses with hybrid engines? This might result in both fuel economy and environmental sterilisation.
Siddhartha Mitra, Director (Research), CUTS (June 20, 2008)
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