India is heavily dependent on Imports for petroleum. The purpose of giving excise duty concession for small cars is that the public should go for fuel efficient cars, thereby saving petrol and diesel. Therefore, the definition of small car should be linked to the fuel efficiency. If you define the minimum mileage (km/litre), indirectly there will be a cap on the cubic capacity. If a car manufacturer offer their bigger model with the same fuel efficiency compared to a smaller car of their rival (say Tata Indica with the same fuel efficiency as Maruti Alto), why to discourage them?
