The Indian finance ministry's plan to raise a tax on diesel vehicles, as part of the current national budget, has left motorists and industry chiefs spluttering.
The Times of India reported on Saturday that Jaipal Reddy, India's oil minister, had on Friday formally proposed a plan to Pranab Mukherjee, the finance minister, to put an additional excise duty of 80,000 rupees (Dh5,900) on diesel vehicles.
Car industry representatives are already worried about the health of India's car industry and say the levy would cause further problems for an already battered market.
"This move is such short-sightedness and it will cause more harm in the long term," says Sugato Sen, the senior director at the Society of Indian Automobile Manufacturers (Siam).
"Our automotive sector is already suffering as it is. Today petrol cars are not selling and this could happen to diesel cars too, which could kill our car industry. We need the growth to continue."
There have been previous unsuccessful official calls for higher taxes on diesel cars in a bid to offset of environmental and commercial concerns.
"Green" pressure groups say the latest plan is long overdue and insist India needs to address the issue of diesel fuel emissions that damage the environment and public health.
"The sale of diesel cars has shot up in recent times and soon over half of all cars will be diesel because of the cost of petrol keeps rising," says Vivek Chattopadhyay from Centre for Science and Environment (CSE), a research and lobby group based in New Delhi.
"Cheap diesel is not only worsening the public health risk, but also encouraging more motorisation and congestion. Diesel is causing serious pollution of our cities and we need to behave in line with the rest of the world."
Petrol is deregulated, giving oil companies the freedom to change retail prices as they see fit. However, changing the price of diesel, which is heavily subsidised, requires government approval. According to the mypetrolprice.com website, petrol in New Delhi cost 65.64 rupees per litre, while the price of a litre of diesel was 40.91 rupees, at the start of last month.
The government says it needs to keep the price of diesel low because it is the mainstay fuel for country's huge agriculture and freight industries.
According to oil ministry estimates, cars account for just 15 per cent of all diesel consumption.
Petrol consumption has been higher than diesel use in the past 15 years - with exception of 1996 and 2004, ministry figures show. But, from April to November last year, diesel consumption growth was 7.4 per cent, compared with 4.3 per cent for petrol.
Environmentalists are alarmed at the disparity. "In Delhi alone 1,200 cars are sold daily and nearly half of them are diesel," says Mr Chattopadhyay.
"Cars have already become the largest beneficiaries of the official fuel tax policy.
"The government policy is redundant and there needs to be a way of capping this trend."
Diesel cars now account for almost 40 per cent of all car sales, compared with less than 20 per cent a few years ago, according to Siam. This is despite the fact that diesel cars cost about 40 per cent more than petrol-engine equivalents.
Motor industry chiefs also fear the planned tax, if implemented, would strangle the development of diesel-engine technology.
"Stigmatising the diesel cause will have a cumulative effect - the technology will not be developed and it will be to the detriment to the whole industry," says Mr Sen.
It remains to be seen whether the diesel vehicle sector in India is about to come off the road.
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Retirement funds heavily invested in equities at a risky time
Pension funds in growing economies in Asia, Latin America and the Middle East have a sharply higher percentage of assets parked in stocks, just at a time when trade tensions threaten to derail markets.
Retirement money managers in 14 geographies now allocate 40 per cent of their assets to equities, an 8 percentage-point climb over the past five years, according to a Mercer survey released last week that canvassed government, corporate and mandatory pension funds with almost $5 trillion in assets under management. That compares with about 25 per cent for pension funds in Europe.
The escalating trade spat between the US and China has heightened fears that stocks are ripe for a downturn. With tensions mounting and outcomes driven more by politics than economics, the S&P 500 Index will be on course for a “full-scale bear market” without Federal Reserve interest-rate cuts, Citigroup’s global macro strategy team said earlier this week.
The increased allocation to equities by growth-market pension funds has come at the expense of fixed-income investments, which declined 11 percentage points over the five years, according to the survey.
Hong Kong funds have the highest exposure to equities at 66 per cent, although that’s been relatively stable over the period. Japan’s equity allocation jumped 13 percentage points while South Korea’s increased 8 percentage points.
The money managers are also directing a higher portion of their funds to assets outside of their home countries. On average, foreign stocks now account for 49 per cent of respondents’ equity investments, 4 percentage points higher than five years ago, while foreign fixed-income exposure climbed 7 percentage points to 23 per cent. Funds in Japan, South Korea, Malaysia and Taiwan are among those seeking greater diversification in stocks and fixed income.
• Bloomberg
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US households add $601bn of debt in 2019
American households borrowed another $601 billion (Dh2.2bn) in 2019, the largest yearly gain since 2007, just before the global financial crisis, according to February data from the New York Federal Reserve Bank.
Fuelled by rising mortgage debt as homebuyers continued to take advantage of low interest rates, the increase last year brought total household debt to a record high, surpassing the previous peak reached in 2008 just before the market crash, according to the report.
Following the 22nd straight quarter of growth, American household debt swelled to $14.15 trillion by the end of 2019, the New York Fed said in its quarterly report.
In the final three months of the year, new home loans jumped to their highest volume since the fourth quarter of 2005, while credit cards and auto loans also added to the increase.
The bad debt load is taking its toll on some households, and the New York Fed warned that more and more credit card borrowers — particularly young people — were falling behind on their payments.
"Younger borrowers, who are disproportionately likely to have credit cards and student loans as their primary form of debt, struggle more than others with on-time repayment," New York Fed researchers said.
How to protect yourself when air quality drops
Install an air filter in your home.
Close your windows and turn on the AC.
Shower or bath after being outside.
Wear a face mask.
Stay indoors when conditions are particularly poor.
If driving, turn your engine off when stationary.
Greatest of All Time
Starring: Vijay, Sneha, Prashanth, Prabhu Deva, Mohan
MATCH INFO
Who: France v Italy
When: Friday, 11pm (UAE)
TV: BeIN Sports
