India Regulatory Brief: Delhi Bans Luxury Diesel Vehicles, New Minimum Wage Considered

December 21, 2015 Posted by India Briefing Reading Time: 4 minutes

Supreme Court Bans Luxury Diesel Vehicles in Delhi to Combat Pollution

The Supreme Court of India has enforced a ban on the registration of diesel-run private cars with an engine capacity of 2000 cc or higher until 31 March 2016 to control air pollution in the capital Delhi. The order surpasses any other orders passed by the lower courts, including the National Green Tribunal (NGT). The decree explains that these high-end diesel-run SUVs are more prone to cause high levels of pollutions as compared to other types of vehicles.

However, the ban will not affect commercial light duty diesel vehicles. In addition, all taxis operating in the city (including Ola and Uber) have been ordered to switch to compressed natural gas (CNG) by 1 March, 2016. Luxury automobile makers including Mercedes Benz, Toyota and Mahindra & Mahindra have complained that a ban on such vehicles will create uncertainty and impact expansion plans. They have argued that National Capital Region (NCR) is the biggest luxury car market in India and contributes to 7 percent of overall passenger vehicles sales.

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India to Pursue Special Guards Against Export Subsidy Removal

The World Trade Organization (WTO) is keen on striking an agreement to remove export subsidies for farm goods. The move will phase out transport and marketing assistance on agricultural products along with support through state-run agencies. The developed countries at the WTO meeting in Nairobi insisted that a deal on export competition for farms be finalized. The motive behind the deal was to gradually remove farm subsidies and reduce import duties in developing countries.

However, the developing and the least developed countries (LDCs) opposed the introduction of new issues and emphasized the Doha Round’s development mandate. India has stated that the new deal would favor a few countries and demanded Special Safeguard Measures (SSM) to protect farm products against import flows. The coalition of G-33 countries, including India and China will issue a different draft on declaration on agriculture. The draft will specify the demand for SSM, which will allow developing countries to briefly hike duties to counter import surges, and price falls of farm products.

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Labor Ministry Proposes Minimum Wage

The Labor Ministry has moved a note to the cabinet seeking approval for a mandatory national minimum wage. Bandaru Dattatreya, Labor Minister will table the new wage code bill in the ongoing parliament session that ends on December 23. The bill will include a merger of four wage related laws – the Minimum Wages Act, 1948, the Payment of Wages Act, 1936, the Payment of Bonus Act, 1965, and the Equal Remuneration Act, 1976.

If the cabinet approves the proposal and the draft bill is passed in parliament, the central government will fix the national minimum wage for unskilled, semi-skilled and skilled workers. The states will have the flexibility to offer a higher minimum wage. Additionally, the labor ministry seeks to consolidate 44 central labor laws into five main laws and fix a uniform definition of wage. This will ease compliance particularly in the labor-intensive manufacturing industry.

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