Policy to Scrap Old Vehicles Gets In-principle Nod
The voluntary policy, applicable on vehicles older than 15 years, will now go to the cabinet
New Delhi: The Committee of Secretaries (CoS) has given an inprinciple approval to the roads transport and highways ministry’s proposal to provide a package of incentives to remove old and polluting trucks, buses and other commercial vehicles from the roads. The policy will be voluntary and applicable to commercial vehicles older than 15 years. “The CoS met on Thursday and broadly agreed to the voluntary vehicle retirement policy drawn by the transport ministry, but the final contours are yet to be worked out,” a senior government official said.
The ministry’s proposal has been awaiting clearance for almost a year now. The committee, which gave the green signal to the proposal on Thursday, had secretaries from the ministry of finance, environment, steel, heavy industry, roads and law ministry as its members.
The proposal will now has to be cleared by the Union Cabinet for implementation.
Under the proposed policy, commercial vehicles older than 15 years will be eligible for incentives if replaced by new ones. According to government estimates, the programme may help replace several million vehicles with less-polluting ones, thereby reducing vehicular emission.
The policy proposes three incentives for the vehicles scrapped -half the road tax and excise duty at the time of purchase of the new vehicle, fair value for the scrap, and discounts from automobile manufacturers. These incentives are likely to cut cost of a new vehicle for the buyer by 15% on an average.
"We'll also have to take states on board to give exemption on roads tax. The Centre can consider compensating a share of this tax exemption," the official said.
The proposal will also be put before the goods and services tax ouncil as the scheme offers tax incentives. Transport ministry’s proposal provides incentives to remove old, polluting vehicles from roads
CoS had representation from finance, environment, steel, heavy industry, roads and law ministries
The proposal will now have to be cleared by the Union Cabinet for implementation
Transport ministry says the policy has the potential to reduce vehicular emission by 25%, save oil consumption by 3.2 billion litres a year
Under the plan, those opting to scrap their old commercial vehicles will have to deposit documents relating to the vehicle at the recycling centre. After verification, the owner will get a certificate and the price for the scrap. He has to provide the certificate to the dealer while buying the new vehicle to avail of the discount.
According to the ministry, the policy has the potential to reduce vehicular emission by 25% and save oil consumption by 3.2 billion litres a year.
The ministry had last year released the first draft of the proposed policy. The draft policy was for voluntary retirement for all fourwheeler vehicles which were bought before April 2006. However, the policy which has been given a go ahead by the CoS is only limited to commercial vehicles such as trucks and buses which are older than 15 years.