Get ready to pay more for that dream car

NO CHEAP THRILLS: Apart from hike in car prices, a Re-1 cess on petrol may also be on the cards.

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New Delhi: Rajendra Maltatia is shopping for a car for his wife and hopes to choose one from the mid-segment.

After careful budgeting, Maltatia zeroed in on the Maruti SX4, but now faces an unexpected hurdle.

The Urban Development Ministry could play the spoilsport in Maltatia’s plans as there is a proposal doing the rounds for an eight per cent cess on new cars.

That means Maltatia's chosen car could cost Rs 50,000 more than it does today.

“This is an additional burden on the tax payer. As it is we have to pay so many different types of taxes,” says Maltatia.

Two wheelers may also see a price hike of four percent and once you get over the purchase shock, get ready for higher running costs. A Re-1 cess on petrol may also be on the cards, all in the name of improving public transport and weaning away people from using cars.

The ministry hopes to collect almost Rs 5,000 crore in just one year if these recommendations are implemented by the cabinet.

They claim that this money will help in upgrading public transport systems across Indian cities.

But the industry as well as experts are unconvinced and say the move will not push people towards public transport .

“Cess does not make sense. While it may reduce usage, it will certainly not reduce sales," says Chairman, Bajaj Auto, Rahul Bajaj.

The proposal was introduced earlier but put on the backburner. With talks of snap polls already doing the rounds, the implementation of this plan may well result in an electoral backlash.