Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
Investing in India? Get Equitymaster Research  
Will India follow China's footsteps? 
(Mon, 3 Mar Pre-Open) 
Chinese and Indian cities are known for having some of the most polluted air in the world. It's likely you would have heard about Beijing's severe smog; but it seems that Delhi is no different. And this situation is only likely to get worse.

One of the reason for Delhi's pollution being as bad as Beijing is the smog created from cars and trucks running on cheap diesel. In Delhi over 1,400 vehicles are being added to the city every day. India subsidizes sales of the fuel to the equivalent of US $15 bn a year, encouraging purchases of diesel vehicles that can pump out exhaust gases with 10 times the carcinogenic particles found in gasoline exhausts.

What may be worrisome about the air pollution is that nobody's talking about it. While China has come under increasing pressure to clean up its act-both from within and outside the country, Delhites have other problems on their mind. Neither the residents nor local government have air pollution in their agendas.

But given the rising economic cost and pollution, this option of doing nothing cannot be acceptable anymore. The options are to either to equate the price and emission standards or to ban production of personal diesel vehicles. If this is not possible, then the new government should in the coming budget tax diesel vehicles to remove the existing fiscal distortion in price and policy.

Two things are certain. India's air quality is among the worst in the world, and is urgently in the need of robust policy and enforcement solutions to clean the air. China has also launched aggressive control measures, from limiting the number of cars that ply its roads to sanctioning punishments against factories that fail environmental standards. India, however, has seen little action since enacting a set of reforms over a decade ago, which included moving industry beyond city limits and switching public transportation to cleaner-burning fuel.

The scale for tackling this has to be increased. From buses to metro, there needs to be a nuanced approach to deal with air pollution. We only seem to have structures and policies based on private vehicles and cars. A complete paradigm shift is needed.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

View all commentaries | Archives  RSS
Read the latest Market Commentary


Equitymaster requests your view! Post a comment on "Will India follow China's footsteps?". Click here!


Become A Smarter Investor In
Just 5 Minutes

Multibagger Stocks Guide 2017
Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
We will never sell or rent your email id.
Please read our Terms