The policy will come into effect following a government notification. The cost of diesel per litre is the lowest in Delhi. Based on the cess imposed, the government is to set up a fund called the Environment Cess Fund to help the introduction of clean air policy. The fund will function as an escrow account and be used in helping Delhiites switch to clean air technologies, said senior officials in the Delhi government.

Chief Minister Sheila Dikshit said the ambient air quality of Delhi has been a major concern for the government.

It has now become essential for the government to make “efforts to control air pollution due to vehicular emission” which needs to be further streamlined.

“The cess is not in the form of a penalty or punishment. It is being levied more as an awareness campaign to encourage residents to switch to cleaner technologies. This is the first time such a concept has been introduced in the city. The fund will be used to introduce new kind of technologies in the city, or alternatively to help people switch from diesel to cleaner fuels and subsidise the parts required for it,” said senior officials.

Dikshit added that she will approach the Union Ministry of Petroleum for the introduction of 50 PPM Sulphur Diesel in the NCR by 2008-09. The cabinet also decided today to commission an adequate number of PUC centers at all 19 border points of Delhi to prevent entry of polluting vehicles. Besides, a financial package to encourage replacement of diesel-driven goods vehicles by new CNG vehicles was also discussed.

The financial incentive may be in the form of a direct subsidy on the capital cost of the vehicle and reimbursement of the amount equivalent to VAT.

The government will not ban diesel vehicles. “It is not democratic. We can only create awareness. The automobile manufacturers pointed out that if we were to introduce alternate fuels, they will manufacture such cars. At present this is not possible,” sources said.

For diesel vehicles
Other decisions taken regarding diesel vehicles:
* National Permit Vehicles will no longer be permitted in the city but will be sent back from the border
* Diesel commercial vehicles will not be allowed to run during the day, but only between 10 pm to 6 am
* Light goods vehicles will have to eventually switch to CNG
* Vehicles switching to CNG on their own accord will be given a VAT waiver
* The incentive will cost the government approximately Rs 102 crore