The New Delhi government has finally decided to levy an environment cess of 25 paise per litre on diesel.

Mrs. Sheila Dikshit, Chief Minister of New Delhi said, “A fund called the Environment Cess Fund would be started to help introducing clean air policy.”

The government has also decided to set up adequate number of centres at 19 border points to prevent the entry of polluting vehicles into the capital from neighbouring states, she added.

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 subsidize the parts required for it, a senior official said.

The state government has also discussed a financial package to encourage replacement of diesel driven goods vehicles plying on local permits with new CNG-run vehicles.

The financial incentive could be in the form of a direct subsidy on the capital cost of the vehicle and reimbursement of amount equivalent to VAT, Sheila Dikshit stated.

Presently, diesel costs Rs 30.48 in the capital. In June, the Delhi government had raised sales tax on petrol and diesel by 1 per cent.

The state government will also approach the Union Ministry of Petroleum for the introduction of 50 PPM Sulphur Diesel in the NCR by 2008-09.