FM signals end of diesel subsidy for car owners

FM signals end of diesel subsidy for car owners

New Delhi: Finance minister Pranab Mukherjee on Thursday said the government can consider doing away with diesel subsidies for passenger car owners.

“...We can accept your (opposition’s) suggestion and try to work out what mechanism could be found out so that this section (diesel car owners) are not subsidized," Mukherjee said in a debate on price rise in the Lok Sabha. Later, Mukherjee said the government is moving in the direction of decontrolling diesel prices as has been done in the case of petrol. The government gives a subsidy of 6.08 per litre on diesel.

Shares of car makers Maruti Suzuki India Ltd, Tata Motors Ltd and Mahindra and Mahindra Ltd fell on the stock exchanges.

Industry body Society of Indian Automobile Manufacturers (Siam) said removing subsidies on diesel for passenger cars would be “a step in the right direction".

“However, the proposed scheme should include only personal use diesel passenger cars," said Siam president Pawan Goenka. “Commercial applications of diesel passenger cars should be exempted from dual pricing of diesel fuel as it would impact mobility for the masses, especially in rural areas."

PTI contributed to this story.