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

The Economic Times - - Economy: Macro, Micro & More - Ra­jat.Arora@ times­group.com

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.

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