Manufacturers Might Be Asked To Offer Incentives Under New Scrappage Policy: Report

A recent report suggests that the upcoming government scrappage policy for end of life vehicles will offer no tax exemptions to owners, and any incentives for vehicle buyers will have to come from automakers. According to Mint, a government official has told them that the Union Cabinet is likely to approve the scrappage policy after the monsoon session of Parliament is over. However, the official also added that "incentives, if any, will have to offered by OEMs (original equipment manufacturers)."

Reportedly, under the new scrappage policy, all commercial vehicles that are 15 years old, and all private vehicles that are 20 years old will be eligible for scrapping. However, the fitness certificate will also be mandatory for these vehicles to ply on the road, which the owners will need to obtain from automated testing centres. The government official has also said that if a vehicle fails the fitness test more than thrice, it might be subjected to mandatory scrapping, according to the proposed policy. All that said, given the fact the government is yet to finalise the norms for setting up of vehicle scrapping facilities, even if announced, the policy might not be implemented immediately.

Also Read: Announcement For Scrappage Policy To Be Made Soon: Union Minister Prakash Javadekar

Under the proposed policy, if a vehicle fails fitness test 3 times, then it might be subjected to mandatory scrapping

The need for an effective scrappage policy has been in discussion for a few years now. Earlier this year, a bench headed by National Green Tribunal Chairperson Justice Adarsh Kumar Goel said a proper mechanism to set up authorised recycling centres compliant with environmental norms was an urgent need given a large number of ''End of Life Vehicles'' (ELV). The green panel had said the response of the MoRTH is very unsatisfactory and lacking insensitivity. The Society of Indian Automobile Manufacturers (SIAM), has been urging the government to formulate a scrappage policy to phase out older and polluting vehicles. The scrappage policy is part of the stimulus package requested by OEMs for the auto sector's revival, in addition to a reduction in the GST rates.

Also Read: Scrappage Policy In Final Stage, To Get Cabinet Approval Soon: Nitin Gadkari

Speaking at the SIAM convention, Union Minister Prakash Javadekar had said that the official announcement about the scrappage policy will be made soon

Also Read: Need An Effective Scrappage Policy To Help Auto Industry: Daimler India CEO

The Minister of State for roads, V.K. Singh, recently told the Rajya Sabha that the Government of India has drafted a cabinet note on creating an ecosystem for voluntary and environment-friendly phasing out of unfit and old polluting vehicles. Earlier, the Centre had asked States Governments to offer a rebate on road tax to vehicle owners, against the presentation of scrapping certificates. Plus, recently, speaking at the SIAM convention, Union Minister Prakash Javadekar also confirmed that the new scrappage policy will be announced soon. However, if these reports are true, and the government is not going to offer any incentives from its side, then this certainly changes things for both manufacturers as well as consumers.

Source: Mint