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SC bans registration of 2000cc+ diesel cars in NCR

TheNewsInternational Team

The Supreme Court has maintained its order of banning registration of diesel vehicles over 2000cc engine capacity in the National Capital Region till March 31, CNBC TV-18 reports.

It has also given a deadline of March 31 to cab aggregators like Ola and Uber to switch to cleaner fuels like CNG.

The apex court pointed out that this order will not impact the common man as it is applicable only on 2000 cc engine vehicles which are owned by the affluent section of the society.
The Environment Compensation Charge (ECC) on commercial vehicles has also been doubled to Rs 1400 for light commercial vehicles and Rs 2600 for larger trucks. However, this will be applicable only on vehicles carrying goods into Delhi.

Other commercial vehicles will not be allowed even to transit via Delhi. Diesel commercial vehicles over 10 year old have also been banned entry into the city.

SC Advocate, Aishwarya Bhati said the court, at its next hearing scheduled on January 5, will look at the real impact of this decision on reduction in pollution and decide whether to extend the ban or relax the restrictions.

In a worst case scenario, if the pollution menace is not controlled, Bhati says, the court may even consider putting a cess on vehicles less than 2000 cc.    

Analysts believe that among the listed companies, sentimentally, Mahindra & Mahindra (M&M) would be the most hit, as nearly 98 percent of its sales are in the over 2000 cc category.

However, they also added that a larger impact on the company’s earnings will be seen only if the ban gets extended to other cities also, as right now only 2 percent of its total sales are in Delhi.

Analysts expect Maruti , with a larger portfolio of petrol variants, to gain out this order.

Market expert, Prakash Diwan, believes that the SC’s suggestion that car dealers offload their existing diesel vehilcle inventory in other markets will not be feasible as there will be logistics cost involved and also selling in smaller towns and ciities would mean discounted rates, which will not be financially viable for the dealers.
Below is the verbatim transcript of Aishwarya Bhati’s interview with Sonia Shenoy and Reema Tendulkar on CNBC-TV18.

Sonia: Is there any clarity on what the duration of this ban will be? Will it be for about three months?

Bhati: Yes that is right. I was there when the judgment was being pronounced so right now all this arrangement is till March 31 2016. You have to understand that winter months are the most severe as far as pollution goes. At the same time the court has made it clear that they will monitor so there are directions for monitoring pollution levels, etc.

The next hearing is on January 5 but everything will depend on how much impact these measures are able to have. In fact this is a running thing; if the pollution situation doesn’t improve, we may need even more drastic steps and if it improves then maybe the court can consider relaxing some of these.

Sonia: You did mention that the ban will be till March 31 2016 which is for three months. There will be a partial ban on diesel vehicles which have more than 2000cc and there will be a ban on diesel vehicles which are more than 10 years old. Anything else that has come through which we have missed out on?

Bhati: No, this is the most important thing. Secondly, the court has increased the environment cess that was levied by the October order. They have also clarified to say that this cess is only for vehicles which are inbound to Delhi. So, all commercial vehicles which are not carrying goods for Delhi and are merely using Delhi as a transit, they will not be allowed entry at all in Delhi. So, this cess is only for Delhi. The 10 year ban is for commercial vehicles, so, all diesel vehicles which are more than 10 years old, before 2006 registration, they are not allowed to even bring goods to Delhi.

Sonia: I just wanted one more clarification. There is a ban only on diesel car registrations right, there was no mention of the diesel car plying. So, so far it is only on registrations?

Bhati: So far it is only on that. The court, after pronouncement of judgement there were oral discussions between the council and the court and the court expressed that we may think of putting a cess on diesel vehicles which are lesser than 2000cc, etc. However, let us see what else is required to be done; that is why I said this issue will have to be closely monitored. Let us see how the pollution levels go. If they go north, the order will be different and if they go south, the order would be different.

Reema: The Supreme Court has given cab aggregators like Uber, Ola time to transition to say CNG. Any word on whether there is some time or some relief given to dealers who are sitting on very large inventory, any transition period given to them?

Bhati: You have to understand that these are all directions which are given exclusively for national capital territory of Delhi. So, I am sure these dealers, etc can take their inventories out of Delhi and sell it. It is not like they can’t sell it elsewhere. These are measures which are exclusively for this and Ola, Uber also, etc there is direction for everybody to clean up. There is direction for Delhi government to buy vacuum cleaners for cleaning up roads, etc so that there is no dusting of roads.

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