India is looking to bring in the vehicle scrappage policy soon — here’s what it means for you
- The reports that emerged from the closed-door meeting of the union minister of Road and Highways, Nitin Gadkari, and SIAM president, Kenichi Ayuwaka claim that the auto industry had proposed certain sales incentives and tax rebates for the government to review.
- The scrappage policy aims at phasing-out old vehicles, which end up polluting the environment.
- Apart from environmental concerns, the policy also aims to increase demand in the market.
The reports claim that the auto industry had proposed certain sales incentives and tax rebates for the government to review. It also indicated that another meeting is likely next week to review these discussions.
In July 2019, the Central government had proposed amendments to the motor vehicle rules to allow scrapping of vehicles older than 15 years. The scrappage policy is meant to flush out old cars running on the roads and aim at phasing-out these old vehicles, which end up polluting the environment.
Further, in a draft notification, the government proposed renewing fitness certificates for vehicles older than 15 years every six months instead of the current one year. Under this policy’s norms, owners with a commercial vehicle older than 15 years and private vehicle owners with vehicles older than 20 years, could be considered for scrapping their old vehicles.
Move aims to boost demand and cut down on steel imports
Apart from environmental concerns, the policy is also aimed at increasing demand in the market. That is why the centre has proposed OEM’s to offer certain discounts on the new vehicles purchased after scrapping an old one.
The policy will reduce the dependency on steel imports as the steel and other metal deposits from the scrapped cars will minorly be cutting down the metal imports year by year.
How can this policy benefit the vehicle owners?
With the resale value of vehicles beyond 15-20 years being extremely low, this policy will provide monetary compensation to owners for sending those vehicles to the scrapyard. The other benefit being that the government is still mulling is for automakers to offer incentives to new buyers for scrapping their old vehicles. Reports suggest that carmakers have agreed to a proposal of offering 1% discount to new buyers.
SEE ALSO: Here’s when we will know the 2020 US election results
Ratan Tata, Mukesh Ambani and Uday Kotak to be a part of PM Modi's Virtual Global Investor Roundtable on Thursday
- PM's visit to vaccine centres gets 'praise' from Congress
- Pollution, pandemic and pre-term birth
- Serum Institute of India threatens to seek ₹100 crore in damages from Chennai volunteer
- PM to interact with more teams of Covid-19 vaccine developers
- UP to have cold chain space for 1.23L litres of vaccine