Seeking a more FDI friendly policy, General Motors India said the government must have consistency in framing guidelines and not resort to short term measures like ‘diesel tax’.
“What we expect from the upcoming Budget is that there should not be diesel tax. It is not the right time for it,” General Motors India President and Managing Director Lowell Paddock said.
Supporting industry body SIAM’s (Society of Indian Automobile Manufacturers) view that only one per cent of diesel consumed in India is used by personal passenger vehicles, he said the ideal way to address the whole issue is to deregulate the fuel and let market determine its price.
There have been calls from different quarters to tax diesel cars saying subsidized fuel has been benefiting the affluent.
Paddock, however, said such a move was uncalled for considering the benefits of diesel technology in terms of environment friendliness and overall benefit.
He said there must be “consistency in the policy” in order to attract more investments in India.
Several auto companies, including Ford India, have stated that their business plans for India could be impacted if ‘diesel tax’ is imposed.
“There should be a foreign direct investment friendly environment,” he said, adding the company has so far invested $one billion in India.
He agreed with other automobile companies in India which have stated that a lack of clarity on pricing of diesel has prevented them from investing further in the country.
Paddock also said other issues like GST, flexible labour laws and managing interest rates must be addressed in the Budget.
Commenting on the company’s future plans, he said in the second half of 2012, the company will launch two new vehicles.
“One is a premium hatchback Sail and the other will be seven-seater a multi-purpose van. With these vehicles coming in we should be looking at good growth this year,” he said.