Not that BEST and the railways have spared Mumbai commuters, but auto and taxi fares will go up on 1st May, leaving many fuming
The Mumbai Metropolitan Region Transport Authority (MMRTA), which is scheduled to meet this month, is reportedly pondering a hike in auto and taxi fare from 1st May. This has left several commuters fuming as they are already burdened with the recent fare hikes from BEST and the railways.
According to media reports, the unions of auto and taxi drivers believe that the fare would go up by at least Re1 due to increase in cost of living index from October 2012 to March 2013.
"The increase in fares has already been steep, to the extent that, where possible, commuters are avoiding autos. The deal is very unfair for passengers. Mumbai commuters' woes have multiplied manifold after the clamp down by the RTO on 'meter tampering' by auto and taxi drivers. Seeing refusals to ply and the callous attitude of the drivers, even the thought of such demands is most disturbing," said MS Mirchandani in an email.
Last year, the state government accepted the recommendation of one-man Hakim Committee, which, among other things, said that auto and taxi fares should be revised every May based on various factors, including cost of living index.
"As far as the date on which fare revisions are to be effected, it should preferably be on the first of May (since the impact of different taxes and levies imposed by the Central and state budgets will be known by then). The revision should be made on 1 May 2013, and on every 1st May thereafter," the Hakim Committee had said.
Mr Mirchandani said, "If the demands, as spelt out, are acceded to, auto and taxi drivers will be better off than most people in the organised sector. Bear in mind that though the drivers have bargaining power, they are not in the organised sector per se that they can demand long term benefits. And India is not a welfare state."
Mumbai Grahak Panchayat, a consumer organisation, had already challenged the Hakim Committee report and the matter is in court.
According to Mr Mirchandani, the demand (of auto and taxi driver unions) covers many items repeatedly. "Rightly, the Committee has dropped the demand for including 'fines' paid to the police and other authorities for violations of law. Future demands can also cover and provide for cost of idle running; LTA; inflation adjusted accounting; contribution to PF, Gratuity, NPS, ESIC and compensation for not driving an auto when ill (some kind of 'loss of profit' policy). Many other heads can be added to further boost the figures and the 'inflated' claims," he added.
Vedanta's ability to tie-up funding to refinance its sizable maturities will continue to be tested in the next 18 months, even if the company can refinance its April and June 2013 maturities, according to the ratings agency
Ratings agency Standard & Poor's (S&P) said it placed its 'BB' foreign currency long-term corporate credit rating on Vedanta Resources PLC on CreditWatch with Negative Implications, due to the delay by the company in refinancing its large maturing debt obligations.
“Vedanta's ability to tie-up sizable funding to refinance its maturities will continue to be tested in the next 18 months, even if the company can refinance its April and June 2013 maturities,” S&P said.
It said Vedanta is expected to eventually garner funding for the debt maturities. “However, Vedanta's inability to plan and execute a strategy to diversify funding sources, lengthen maturities, and improve its less than adequate liquidity could pressurize the rating further,” the ratings agency added.
The company has, however, tied up the majority of the funds for its $809-million debt maturing on 29 April 2013 and is tying up the rest. Vedanta is also in the process of securing funding for its $1,350 million debt due 6 June 2013.
Since acquiring India-based oil company Cairn India Ltd in December 2011, dividends received by Vedanta has formed only a small part of its large debt servicing needs. The holding company does not maintain any credit lines and, therefore, needs to rely on external sources of funding for refinancing, adds S&P.
S&P also placed its 'BB' rating on Vedanta's outstanding issuances on CreditWatch with Negative Implications.
S&P said it could even lower the rating for Vedanta (a) in the unlikely event that it does not tie up all the funding for its April 2013 maturities by 12 April 2013; (b) if Vedanta fails to finalise funding for its June 2013 maturity at least one month before the maturity date; or (c) if Vedanta's refinancing framework and financial management strategy are not conducive to lengthen the maturities, diversify funding sources, strengthen liquidity at the holding company, and improve access to cash at the subsidiaries.
Vedanta has been in the news often over the past one year and its difficulties have been covered in the following Moneylife articles:
According to Praful Patel, it is wrong to levy the SUV tax on cheaper SUVs such as Tata Sumo and Mahindra Bolero, which transport people in rural areas
Praful Patel, minister for heavy industries and public enterprises, said on Thursday that vehicles priced below Rs10 lakh should be exempted from the sport utility vehicle (SUV) tax announced in the Budget.
Supporting the automobile industry's demand for a second look at the increase in excise duty on SUVs to 30% from 27% , he said, "I certainly feel there is a need to look at the excise duty on SUV. To begin with, there is no classification of SUV to be found in the Motor Vehicles Act."
Last week, the Standing Committee on Finance headed by Yashwant Sinha had called the government’s move to impose additional tax on SUVs discriminatory. Following the Budget on 28th March, certain long cars normally referred to as sedans have come under the government’s definition of SUV and have ended up paying higher taxes.
Chidambaram, in his Budget proposal, said that any vehicles over and above the 4-metre length, having a 1500cc engine, and 170mm ground clearance would pay 30% tax while sedans would continue to pay the regular 24-27% tax, depending on their classification. However, this has also affected popular sedans like Maruti SX4, Toyota Corolla Altis and Honda Civic.
Speaking on the sidelines of the Hero Mindmine Summit, Patel said the SUV tax has hurt vehicles like “Sumo and Bolero, which are used in rural areas to transport people.”
Stating that he has taken up the matter with finance minister P Chidambaram, Patel said, "I suggested that any vehicle below Rs10 lakh may be brought out of the definition.”
He said the objective must be to "dis-incentivise people who use high-end cars" and for them "not to be subsidised by cheap diesel."
Patel said the automobile industry has 'merit and justification' in seeking a re-look at the higher tax on SUVs.