Safety, Standards and pricing:Small Car Industry

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Sunanda K. Chavan
Till the year 1988,legislation regarding safety standards and pollution control was either nonexistent or not enforced. The Motor Vehicles Act of l988 has set the idling emission limit for four-wheeler as percent and for two and three wheelers as 4.5 per cent. Smoke density limits have been set for diesel vehicles. At the same time, vehicles that are fuel— efficient attract less excise duty and can avail of concessional customs duty.

Under the Motor Vehicles Act, every component used has to comply with standards laid down by the Bureau of Indian Standards (BIS). The rules regarding brakes, wipers, steering, safety glass and lights, noise pollution hasn’t been dealt with except for rules against the use of air horns. There are also tougher laws against overloading as it causes accidents, air pollution and excessive wear of the roads.

Other policies are linked to the eventual pricing of a vehicle. In the Sixties, manufacturers had to get any price increase approved by the government. In 1967, price discipline freed jeeps and CVs from this practice. However, cars were subject to statutory price control. The auto-manufacturers finally succeeded in getting the decontrol of car prices in the year 1975.
 
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