ATTN : SHRI AMITABH KANT ( NITI AAYOG )

Transportability  Theory

{  From   Special   to   General   }

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Einstein's came up with “ Theory of Special Relativity “ in 1905

Then , he proposed  “ Theory of General Relativity “ in 1915

Context :

NITI Aayog, Heavy Industries Ministry differ over levy on two-wheelers to subsidise EVs

Highlights :

In a report titled ' Transforming India's Mobility ' NITI Aayog had suggested ,

#    using the feebate mechanism to incentivize the use of green mobility

       technologies

#    identifying potential mechanisms

#    develop a regulation for incentivizing green mobility technologies with a

       feebate mechanism.

Proposed Methodology :

NITI Aayog wants to levy a " Penalty " on 2 wheelers ( 2 crore getting sold per year in India - and almost all use Petrol  – a polluting fuel )

and,

Use this money ( Rs 500 per 2 wheeler = Rs 10,00 cr / year ) to give " Subsidy " to Electric Vehicles ( non - polluting )

For calculating that

·      Penalty  for the polluting 2 wheelers , and

·       Subsidy , for the Electric Vehicles ,

NITI Aayog proposes to use the following “ factors “ of usage :

#  " Energy Used "         (  Polluting Petrol vs  Non polluting Electricity )

#    TIME of usage         (  Weekday Working Hour   )

#    LOCATION of use    (  Vehicles entering City Centre )

Also envisaged in another report of NITI Aayog ( Goods on the Move ) :

#  Charging trucks to enter the city during congested periods while incentivising them to

    enter during night time ( with both, costs and savings being passed through to the

    receivers of those goods )

Let us call this proposal of NITI Aayog ,  “  Theory of Special  Transportability  “

So , why is Heavy Industries Ministry objecting ?

·      There is already a 16 per cent Feebate in place as EVs attract 12 per cent GST whereas the IC-engine vehicles attract 28 per cent

·      NITI proposal could lead to a hike in prices 

·      Practical challenges associated with the collection of the tax , once introduced

·      Who will collect it as now all cesses have been subsumed under the GST ?

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My  Take  :

·      NITI Aayog proposal is more of a “ Special Theory “ which takes into account only 3 factors ( Energy type / Time / Location  )

·      It ignores the following factors :

Ownership – Purpose – Age of Vehicle – Capacity – Where used – When used

·      Despite a 2 wheeler using “ dirty petrol “ , if ALL of the above mentioned factors were taken into account , there will be scenarios when a 2-wheeler is causing less HARM to the environment than even an Electric car !

·      All of these factors ( of usage ) do not cause “ identical “ impact on the environment . It is therefore  essential to assign different “ Weightages “ to each factor , depending upon it’s “ Harm Potential “

·      Since ALL vehicles are causing at least “ some and VARYING amount “ of HARM to the environment , throughout the day ( and night ) , there is no case for penalizing “ some ( by permanent “ branding “ as bad vehicles ) and subsidizing others ( by permanent branding as good vehicles ) . This is a flawed argument  !

·      No proposal must depend upon “ human intervention / discretion “ , which will , not only will make it difficult ( more likely, impossible ) to implement but , will invariably lead to increased corruption !

·      A proposal must be seen as “ just – impartial – unbiased “ and must get implemented consistently and automatically “ without fear or favour “ ! Only then it will be respected even if it is “ disliked “

My proposal :

Envisages a technology-based platform which collects a “ TRANSPORT  TAX “ from ALL vehicles , 

#    Automatically - Consistently

#    Every Hour

#    Without human intervention

-        based on integrated  Pigouvian  approach to transport tax pricing

You might even want to call ,

Transport : an Integrated Logistic Plan ?   ,

-        a “ Theory of General  Transportability “

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11  Dec  2018

www.hemenparekh.in / blogs