Ban on diesel taxis hampering India's image as preferred investment destination: Ficci

The uncertainty arising out of ban on diesel taxis in the national capital may prove detrimental for the automobile sector and is bound to hamper India's image as a preferred investment destination, Ficci said on Thursday.

"The lack of clarity in the policy and such stringent measures could result in uncertainty that would impact on the image of the country as a preferred investment destination besides impacting a large number of entrepreneurs who have entered the travel industry," the industry chamber stated.

The Delhi government banned plying of diesel-run taxis on the city roads after the Supreme Court last week refused to extend the April 30 deadline fixed for conversion of diesel cabs into less-polluting CNG mode.

"The ban could prove detrimental to the auto industry, and may not result in any significant lower emission levels since the new diesel vehicles emit lower pollutants given they comply with the advance vehicle emission standards (Euro IV), whereas the older vehicles with old emission norms would continue to ply on the road," Ficci said.

It noted that the experience worldwide is that the stand alone mandatory policies or vehicle replacement programmes are not very common and without additional incentives (fiscal or otherwise), these measures may become unpopular.

"The need of the hour is vehicle replacement programmes supported by some form of policy incentives," Ficci said.