Sunday 3 October 2021

FAME III on horizon ?

Context :

Government to levy fine if companies don’t comply with flex engine scheme: Gadkari

Extract :

Union Minister of Road Transport and Highways Nitin Gadkari, on Saturday, said that the Centre will impose a fine on vehicle manufacturers who fail to support the government’s initiative to promote flex engine vehicles.

“ All companies have been already instructed to gear up for converting petrol engines into flex engines. Otherwise, there will be a fine ( imposed by the government ) “ , said Gadkari

The government plans to make it mandatory for all vehicle manufacturers to make flex engines ( that can run on more than one fuel ). The order is likely to be issued in next three-four months

My Take :

Some 30 months ago , I sent following e-mail to our Cabinet Ministers :

Ø FAME II > FAME III > FAME IV ………………………( 05 Mar 2019 )

Among the suggestions ( to accelerate the adoption of Electric Vehicles ), listed in that e-mail , was following :

What , if any , is the shortcoming of just announced FAME II ?

# There are no “ dis-incentives “ for manufacture / sale / purchase of Petrol

– Diesel vehicles

Policy Instrument > Taxing all Vehicles based on their “ Harm

Quotient “ for environment.

Dis-incentivize purchase of Petrol / Diesel vehicles

# Instead of spending / wasting scarce government funds to “ Subsidize “

the buyers for purchase of E Vehicles, ( and that too, for 3 years ), it

would be far better to “ dis-incentivize / penalize “ them (

and permanently ), by introduction of Pigovian TRANS-TAX on each and

every vehicle , for its entire life ( no more “ Old Vehicles “only ), as

conceptualized in detail , at :

Transport : an Integrated Logistic Plan ? [ 20 Nov 2018 ]

# There are no “ dis-incentives “ for manufacture / sale / purchase of

Petrol – Diesel vehicles

( A.4 ) Dis-incentivize manufacturers for production of Petrol / Diesel

vehicles

This could be achieved by gradually raising the GST rate for such

vehicles, starting from April 2022 and simultaneously gradual

reduction in the GST rate for Electric vehicles

Dear Shri Gadkariji,

I presume that :

Ø Your order will provide sufficient time ( April 2023 ? ) for vehicle manufacturers to change-over ( as you did when mandating changeover from BS IV to BA VI norms directly ( bypassing BS V standards )

Ø These Flex engines will run on any combination of Petrol and Ethanol, since, to begin with there will be a mix of all types of Fuel Stations ( pure petrol / pure ethanol / blended fuel )

Why should you get my suggestion ( Transport : an Integrated Logistic Plan ? 20 Nov 2018 ), examined by experts ?

Ø Through mandatory installation of pre-paid ( bank account linked ) RFID sensors on ALL vehicles , you managed to collect a Highway Toll Tax of Rs 103 + crores in a single day , on 1 July 2021 . ( Entirely automatically, without human intervention )

Ø By today, that figure could have crossed Rs 110 crores / day

Ø That is from just 3.5 cr users ( vehicles )

Ø India’s current, total 2+3+4 wheeler population, could be approx. 28 crore ( 8 times of 3.5 cr )

Ø As per my suggestion, if ALL of these vehicles are taxed 24x7 ( whether plying on highways or not ), then the proposed TRANS-TAX collection could well become Rs 1,000 Cr / day ! And without needing a single human being to collect !

Ø Partial implementation ( like SAND-BOX testing ), could start with just one state ( Maharashtra ? ) by April 2023 and gradually extended to cover entire country by April 2025

With regards,

Hemen Parekh / hcp@RecruitGuru.com / 04 Oct 2021

July 02