In India cars are getting more expensive. Finance ministry officials said that they would end import tax concessions on December 31, 2014. The Indian government, which is very poor, is trying to solve financial problems by increasing tax. The excise duty will go up from 8% to 12% for small cars, and it will go up from 20% to 24% for larger cars. As the excise duty increases, car prices will surely increase. It seems that consumers will restrain themselves from buying cars, but car makers do not think it grave. They anticipate that car sales will decrease and it will hit them. However, they believe it is temporary and will recover soon.

I think that rising tax is a good way for the Indian government to be wealthy. In Japan there was an increase in consumption tax in April, 2014. At first people would not buy a lot, but now it seems sales are recovering. I think the same is true with India. In terms of redistribution, it should be on luxury items, not on everything. The Indian government will have to relieve dissatisfaction of people. It should do welfare work to encourage people. That makes them trust the government and the economic policy will be effective.