Government to announce incentives for scrapping old vehicles

The government, in the next few weeks, will be announcing incentives for scrapping old and polluting vehicles. This will be part of the proposed voluntary vehicle scrapping policy that aims to phase out old and unfit vehicles.

Union Minister Nitin Gadkari said buyers of new vehicles, after opting for scrapping of their old and polluting vehicles, will be offered benefits under the new policy to phase out old and polluting vehicles. He explained that it would lead to a 30 per cent boost to the Indian automobile industry turnover to Rs 10 lakh crore in the  years to come.

Nirmala Sitharaman, the Finance Minister, had last week pointed out that the policy will help in encouraging fuel-efficient, environment-friendly vehicles, thereby reducing vehicular pollution and oil import bill. “Vehicles would undergo fitness tests in automated fitness centres after 20 years in case of personal vehicles, and after 15 years in case of commercial vehicles,” she said.

Giridhar Aramane, road transport and highways secretary, said under the proposed vehicle scrappage policy, all vehicles will have to undergo automated fitness testing. The testing will be non-discriminatory and without any manual intervention, to ensure that the fitness level of the vehicle is revealed without human intervention, manipulation, corruption or fudging of the data.

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“The incentive structure of the scrapping policy is under works. We are in discussion with stakeholders. Minister will announce the result of discussion in few weeks. However, disincentives have been recently notified by the state governments, which is the green tax. Many states are already imposing it, but in a very ineffective way,” Aramane said. “The state governments and private partners will be assisted, facilitated in the establishment of these scrapping centres. The government will only play a facilitating role, it will not involve in regulating, controlling the scrapping centres. Scrapping facility is already well developed, especially in the shipping sector. We are trying to integrate automobile scrapping with the shipping sector and other sectors, where economies of scale can be achieved.”

Aramane further said that many states have been notified in ineffective way. “We want to advise that state governments through notification under Motor Vehicles Act to consider imposing green tax on older vehicles which cause more pollution.” Gadkari said those going for scrapping of their vehicles will get some benefits from the manufacturers. He believes the policy will prove to be a boon, for the economy as well as for the automobile sector. The minister said that finer details of the policy would be unveiled by him.