Tax Exemption for R & D in technology for electric and hybrid cars

An item in the times of India says that this subsidy of Rs 14,000 crores will save Rs 60,000 crores in fossil fuel over six years.
http://blogs.timesofindia.indiatimes.com/toi-edit/rs-14000-crore-subsidy-proposed-for-hybrid-electric-cars/

Times of India’s own counter-view is that the subsidy amounting to Rs 1 lakh for a 32 Lakh car would mean nothing to the consumer.

Clearly, the Govt should not subsidize cars selling more than Rs 5 Lakhs. What we ought to do is to offer a tax exemption for electric and hybrid cars costing less than Rs 5 Lakhs. The focus should not be so much on direct savings, but on stimulating Indian automobile industry to do R & D to create new lines of low-cost vehicles that drastically cut into petrol and gas consumption.  The tax exemption should cover a significant portion of the R & D expenditure.

Srinivasan Ramani

The Right to Information Act and Tax Exemption

There is a discussion on whether political parties should be subject to the Right to Information Act. I wish to comment here on a more general policy issue. A whole lot of enterprises in India are given tax exemption. Such exemption increases the disposable income of these enterprises by a significant amount.  The country extends them a variety of services such as police protection, making transport infrastructure available etc., without demanding they pay tax. In other words, other tax payers like you and I pay for these goodies made available to these enterprises, on the theory that their activities are socially beneficial. They are also given land etc. free or at subsidized prices by the Government. Whether these entities are socially beneficial or not is often in question. 

I would, therefore, argue that all tax exempt entities should be subject to the Right to Information Act. This will make their accounts and activities more visible to public scrutiny. They have as much a right to international visibility as tax exempt bodies connected with Indian cricket!

Srinivasan Ramani