Excise duty subsidy

Drawing attention to Gadkari’s recent announcement that the draft of V-VMP is ready, and will be sent for Cabinet approval after nod from the Finance Ministry, an industry expert questioned the need to hurry. He drew attention to the transport minister’s claim that automobile production will increase by 40 per cent after the (modernisation) policy is implemented. He also drew attention to the minister having sought from the Finance Ministry a rebate on excise duty of 50 per cent at least on the purchase of new vehicles by buyers who surrender their old polluting vehicles for scrapping. In the wake of the government not passing the benefit of record reduction in the international crude prices, a rebate of 50 per cent (at least), which would amount to Rs. 1.5 lakh approximately in case of a commercial vehicle, looks like a difficult proposition. At a time when fleet utilisation hasn’t gone up significantly; neither has the funding situation improved drastically, such an incentive, even if passed, may meet with limited success.