GST: Cheaper cars eat into costly bread

It has been over a week since the single tax regime, the Goods and Services Tax (GST), kicked in, and we all realised how it impacted our lives.

Some breads are more expensive, for example. But they can’t eat bread, let them eat cake, or so it seems, since the prices of luxury vehicles have been significantly reduced, by as much as 10% in some cases.

So have the prices of small cars, by just over 2%. Meanwhile, hybrids have become more expensive, by just over 12%.

But should we be having cake, especially when we can barely breathe in the NCR region?

In the last one year, there has been huge public horror at the state of the air. It’s unbreathable, except that we are all breathing it. It’s a health emergency.

One key way forward, popularly agreed upon, is limiting private transportation. It isn’t impossible.

Cities Indians like, such as London, make it expensive to take cars in certain parts, and Singapore won’t allow you to own a car until a car-slot opens out on the roads. This is not quite what even the government itself wanted.

The GST has the potential of doubling as a sin tax — limiting perverse consumption and bolstering the right kind of consumption.

By making hybrids expensive and polluting cars more affordable, not only does it encourage car ownership, but of the wrong type.

Fortunately, this can still be re-considered. And re-considered it must be. Hybrids must be cheaper than pre-GST prices and every other car significantly more expensive. And beyond GST, public transportation is key. There is no other way forward to protect public health.