Impact analysis is an important tool to assess the effectiveness and efficacy of regulatory policies formulated by the Government. The impact analysis help in diagnosing the infirmities and gaps in policies and provide opportunity to rectify the same for better outcomes and compliance. An impact analysis of few regulatory policies is discussed hereunder.
With the implementation of the decadal AMP-2006-16, the growth of automobile sector has been rather impressive despite a slowdown-phase during the implementation of this AMP. The short fall in some the targets of AMP 2006-16 will be make up in the current AMP-2016-2026 with better planning and execution. With the economic growth looking up, the sector is expected to outperform the projections envisaged AMP-2 during the decade of 2016-2026. The automobile sector in India has immense potential for growth and supplement the growth of other related sectors synergistically. For achieving high sustainable growth, the Government of India has not only simplified and streamlined the regulatory policies framework for ease of doing business but also committed for minimum Government and maximum Governance.
The recent decision of the Government about the leapfrogging to BS-VI norms for all types of vehicles from April 2020 will not only reduce the emission emitted by vehicles but also bring the diesel vehicles and gasoline vehicles at par in terms of emissions discharged by them. However, the actual reduction in the levels of air pollutants in ambient air may not be achieved because of the large number of on-road old and inefficient vehicles. The benefits of this policy cannot be realized unless the inspection & maintenance of in service vehicles, end of life vehicle, dismantling, recycling is implemented across the country. The end-of-life vehicles policy should be given legal force by notifying it under the CMVR, 1988 for boosting the recycling of vehicles in an environmentally sound manner. Further, with tighter emission norms in combination with fuel economy norms will synergistically come down and commensurately reduce the impact on human health and climate change.
The biggest reform in the taxation regime was rolled out recently in 2017 as unified GST expected to have an overall positive impact on automotive sector. However, the electric cars are levied GST at 12% and hybrid cars at 43% which is not supportive in promoting green vehicles or low carbon transport to improve the air quality and climate targets committed in Paris during the annual conference CoP-15. Further, the recent announcement by the Government for revision of GST Cess from 15% to 25% on SUVs and high-end Sedans may be a dampener for the spirit of automobile sector and may impact the rating of India and cause erosion of trust among the investors and auto-makers. Inconsistency in policy implementation may not only hit long term planning and business strategies but also technology transfer. Therefore, such anomaly should be redressed by the Government in the interest of promoting EVs, human health and climate change.
Further, despite the new vehicles especially the cars are coming with several safety measures, accident avoidance and accident preventive systems, the accident frequency of vehicles in India is amongst the highest about five lakhs accident reported every year with more than 150,000 deaths. To ensure safe and secure driving on Indian roads, the Government brought a Bill which is pending in the Parliament. The Bill envisages safety measures, stricter penalties and discipline on roads for prevention of road accidents. Presently, the Bill under reference to the Parliamentary Standing Committee of the Parliament for examination. Furthermore, for prevention and control of accident, the Government should implement universally accepted 4 E’s viz. (i) Education; (ii) Enforcement; (iii) Engineering; and (iv) Environment and Emergency care of road accident victims. The disciplined and responsible driving among the drivers and owners of cars can lead safe and secure transportation which can be achieved through effective compliance and enforcement, education, awareness and proper training of drivers of vehicles.
Additionally, to remain export competitive, the harmonization of international technical regulations is needed because sometime these international technical regulations can be used as export barriers, also referred as Technical Barriers to Trade (TBT). Therefore, the export competitiveness is always in the interest of industry to produce technically sound vehicles aligned with international technical standards. But the fact remains that the transportation in India is unique in terms of diversity, complexity and driving cycle. Therefore, the three wheelers, e-rickshaws, tempos apart from local taxi, minibuses etc. which are crucial part of multimodal transport system in India for short distance journey especially in congested areas and last mile connectivity, provide employment to large number of people and as such should not be put under the rigidity of international technical regulations. This unique India specific transportation needs homegrown solutions.
Universalization of electric vehicles in the country by 2030 for low carbon economy and transport is gaining momentum through NITI Aayog. However, a radical policy shift to promote 100% EVs in public sector and 40% in private has implications related to affordability, types of energy used, battery technology, charging infrastructure. But it is also fact that the industry has already made a huge investment in efficient gasoline, diesel and hybrid vehicles. The over-dependence and reliance on a single option (viz. EVs) is not in spirit of promoting innovations and out of the box thinking. The process of policy formulation for any sector economy must be technology and fuel neutral provided vehicles meets the regulatory requirements. Further, Government at present is making renewed efforts to implement 5 per cent blending of renewable biofuel in both petrol and diesel. While diesel biofuel blending is near zero, the petrol blending today stands at an overall of about 3 per cent in the form of first generation i.e. molasses-based ethanol. The second and third-generation biofuels are being popularize because of their potential for cheaper, cleaner with high yield fuels derived from non-food biomass, cellulose and algae. The algae are capable of much higher yields with lower resource inputs than other feedstock, algae derived biofuels provide many advantages over other alternate fuels and have promising future. Methanol is also propositioned to be a future fuel by the NITI Aayog.
The technological advancement in automotive space in India is evolving fast due to development of innovative and converging technological solutions. The ITS-enabled vehicles provide useful information like congestion, fuel consumption, emissions, accident prone areas, traffic flow etc. Further, application of the smart-phones is enlarging the horizon of applications of ITS. The recent advances in convergence of technologies (telematics) like telecommunication, vehicle technologies and ITS are further revolutionizing the performance of vehicles in terms of safety, driving, communication, storage of information for records and analysis of information for rectification and amendments. Currently, the shared, connected and autonomous vehicles are integral part of our priorities for developing affordable EVs. The Google self- driving car has completely changed the thought process of Governments, auto-makers and the public alike.