Finance Minister Nirmala Sitharaman has said that the tax proposals in the Union Budget for FY20 on fossil fuels and electric cars must push people to avoid polluting fuels and adopt either electric vehicles or public transport.
Sitharaman in an interaction with the media said the increase in the duty on petrol and diesel announced in the budget was not meant to hurt the middle class, but address environmental concerns.
“If I am investing in better metro connectivity, public transport and better future transport, I would expect a behavioural shift towards using public transport rather than using one’s own car with a single passenger,” the Minister added.
In her budget speech, Sitharaman had announced that the softening of crude oil prices had given her the scope to increase the special additional excise duty and road and infrastructure cess by Re 1/litre each on petrol and diesel.
“If I had given people deduction for buying affoprdable house, is that for the super rich? Not at all, it is for the middle class. If I have also promoted the use of electric cars in place of fossil fuel vehicles, again, it is keeping in mind the commitments we have made for environment’s sake. I am also helping the middle class to shift from a fossil fuel run vehicle to one that runs on electricity,” she said.
The union government has proposed to impose additional 2 per cent excise duty on petrol and diesel in the budget for 2019-20.
With the budget the government has announced an outlay of Rs 10,000 crore for Phase 2 of the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles, or FAME 2 scheme, to boost electric mobility and increase the number of electric vehicles in commercial fleets.