Government of India consults a lot of Economic experts and other eminent experienced people before formulating the guidelines and rules in the annual Indian Budget. As per one of these reports, the recommendations make by “Kirit Parikh committee”, there are many suggestions related to the Oil industry. The report talks of proposals to reduce economic burden on the Govt. by increasing Kerosene and LPG prices and deregulating Petrol and Diesel prices. The most striking recommendation in the report is to increase the prices of Diesel engine vehicles
An additional excise duty on a diesel vehicle to bring it at-par with petrol driven cars. At the current levels of usage, an additional excise duty payable amounts to about Rs.80,000/year.
This recommendation is enough to make the major carmakers in India worry about the Diesel car pricing and sales. Most of the small diesel cars in India are sold because of their low running cost. If the initial cost of the car is increased by a big amount (amount may be announced in this budget), the economic factor for low running cost will be automatically offset. This will mean a drastic drop in the sales of small cars powered by Diesel engines. Lets keep our fingers crossed and see if these recommendations will actually be implemented in the budget of year 2011 or not.