Increasing number of experts are now highlighting the impact of our cities as a key concern globally. As we pass the 50 per cent mark for urban population worldwide, it is becoming evident that with this have come a wide range of social, environmental, economic, cultural and governance problems. Most of the solutions are not ‘rocket science’ – technologies and tools are increasingly available but good policies and community engagement are vital for achieving a low carbon society.
Research figures attribute between 40 to 80 per cent of greenhouse gasses to cities. India has some of the most populated cities in the world. Given the density of population and in many cases poorly planned communities and infrastructure; the cost of adaptation to the effects of climate change is going to be very high. Reversing urbanisation trends is more difficult in the short term than dealing with the problems within the cities. The disparity between the haves and have-nots in cities is increasing even more rapidly and this causes other social problems.
Some key issues that face cities today and which need to be addressed on a priority basis are:
Urban energy: Providing energy to all is a major task even considering the long term environmental impacts of pollution. Sustaining economic growth (a lot of which is urban) requires energy and centralised supply that is high carbon based or high risk based (nuclear) needs to be considered with care. Renewables are a clear option and cities now need to explore decentralised power (urban based). Buildings provide a very good platform for both improving efficiency in use and integrating renewables. Together with this there is the need for smarter grid infrastructure to manage peak time and off peak demand. A smart city in the future will have smarter grids and high levels of onsite generated energy, higher levels of end use efficiency and a very engaged end user community.
Urban water: The days of reliance on outside water supply and acquifer are limited. Cities need to ensure a high level of recover, reduce, recycle and reuse of the water that is received through rainfall. Water sensitive urban design is critical to good water management.
Urban waste: Waste is a major concern in all cities. It is not only about how waste is collected and removed but also about how imaginative one is in recovering, reusing and recycling from the waste chain. This can provide innovative solutions for a cyclic economy of the future.
Urban transport: The growth of cities with car dependency has led to high levels of pollution and chaos on our roadways. The health impact of all this alone runs in billions of dollars a year. Good policy is critical to choice of travel modes and transit options can have a major impact in cleaning up our cities.
Good land use planning: Together with all the above good land use planning is critical if we are to improve our cities. Liveable cities which are concerned about the health and well being of their citizens have developed masterplans which rely on good strategy for all the above services along with zoning for residential, industrial, commercial and other areas. The micro-climate of the urban environment can be much better managed with urban vegetation.
The problems in cities seem to be getting worse faster than improvements from planning strategies (in most rapidly developing countries). Community education and social change behaviour actions will be required to make major strides in making our cities better. Sustainability for cities means reducing the ecological footprint (resource inputs and waste outputs) whilst simultaneously improving the quality of life (health, housing, accessibility, community etc.). The path to a low carbon city of the future offers opportunities for economic and social development by capturing innovations in product and tool development and for social innovations through community engagement. Countries like India are very well placed to lead in this area.
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Petrol in India is cheaper than in countries like Hong Kong, Germany and the UK but costlier than in China, Brazil, Japan, the US, Russia, Pakistan and Sri Lanka, a Bank of Baroda Economics Research report showed.
Rising fuel prices in India have led to considerable debate on which government, state or central, should be lowering their taxes to keep prices under control.
The rise in fuel prices is mainly due to the global price of crude oil (raw material for making petrol and diesel) going up. Further, a stronger dollar has added to the cost of crude oil.
Amongst comparable countries (per capita wise), prices in India are higher than those in Vietnam, Kenya, Ukraine, Bangladesh, Nepal, Pakistan, Sri Lanka, and Venezuela. Countries that are major oil producers have much lower prices.
In the report, the Philippines has a comparable petrol price but has a per capita income higher than India by over 50 per cent.
Countries which have a lower per capita income like Kenya, Bangladesh, Nepal, Pakistan, and Venezuela have much lower prices of petrol and hence are impacted less than India.
“Therefore there is still a strong case for the government to consider lowering the taxes on fuel to protect the interest of the people,” the report argued.
India is the world’s third-biggest oil consuming and importing nation. It imports 85 per cent of its oil needs and so prices retail fuel at import parity rates.
With the global surge in energy prices, the cost of producing petrol, diesel and other petroleum products also went up for oil companies in India.
They raised petrol and diesel prices by Rs 10 a litre in just over a fortnight beginning March 22 but hit a pause button soon after as the move faced criticism and the opposition parties asked the government to cut taxes instead.
India imports most of its oil from a group of countries called the ‘OPEC +’ (i.e, Iran, Iraq, Saudi Arabia, Venezuela, Kuwait, United Arab Emirates, Russia, etc), which produces 40% of the world’s crude oil.
As they have the power to dictate fuel supply and prices, their decision of limiting the global supply reduces supply in India, thus raising prices
The government charges about 167% tax (excise) on petrol and 129% on diesel as compared to US (20%), UK (62%), Italy and Germany (65%).
The abominable excise duty is 2/3rd of the cost, and the base price, dealer commission and freight form the rest.
Here is an approximate break-up (in Rs):
a)Base Price | 39 |
b)Freight | 0.34 |
c) Price Charged to Dealers = (a+b) | 39.34 |
d) Excise Duty | 40.17 |
e) Dealer Commission | 4.68 |
f) VAT | 25.35 |
g) Retail Selling Price | 109.54 |
Looked closely, much of the cost of petrol and diesel is due to higher tax rate by govt, specifically excise duty.
So the question is why government is not reducing the prices ?
India, being a developing country, it does require gigantic amount of funding for its infrastructure projects as well as welfare schemes.
However, we as a society is yet to be tax-compliant. Many people evade the direct tax and that’s the reason why govt’s hands are tied. Govt. needs the money to fund various programs and at the same time it is not generating enough revenue from direct taxes.
That’s the reason why, govt is bumping up its revenue through higher indirect taxes such as GST or excise duty as in the case of petrol and diesel.
Direct taxes are progressive as it taxes according to an individuals’ income however indirect tax such as excise duty or GST are regressive in the sense that the poorest of the poor and richest of the rich have to pay the same amount.
Does not matter, if you are an auto-driver or owner of a Mercedes, end of the day both pay the same price for petrol/diesel-that’s why it is regressive in nature.
But unlike direct tax where tax evasion is rampant, indirect tax can not be evaded due to their very nature and as long as huge no of Indians keep evading direct taxes, indirect tax such as excise duty will be difficult for the govt to reduce, because it may reduce the revenue and hamper may programs of the govt.