Scrappage policy: No direct sops for junking old cars

NEW DELHI: The government is unlikely to offer any direct incentives for junking old vehicles but will empower states and automakers to provide sops against scrapping certificates.
The transport ministry, which had circulated a Cabinet note on the Voluntary Vehicle Scrappage Policy for inter-ministerial comments, has received approval from all the ministries concerned, an official said.

“The Central government will not offer any direct incentives in the policy or any tax sops, as was being talked about earlier,” an official told ET. “State governments will be free to offer rebates on road tax against a scrapping certificate. Even original equipment manufacturers can allow a discount against a scrapping certificate if they want to boost their sales.”

The ministry is changing the draft guidelines issued in October for setting up authorised vehicle scrapping centres.

“We are making minor changes based on comments received on the draft guidelines for scrapping centres and the scrapping policy will follow soon,” the official said.

The much-awaited policy, which is expected to revive car sales, will focus on creating disincentives for older vehicles plying on roads.

More frequent pollution checks, higher re-registration charges and stringent fines for not carrying required documents, among other measures, will be put in place to deter the use of vehicles more than 15 years old.

The transport ministry issued a draft notification earlier this year proposing that renewal of registration of petrol and diesel cars be increased to Rs 15,000 from Rs 600 at present.

The National Green Tribunal noted in July that there will be over 21 million ‘end of life vehicles’ by 2025. About 9 million vehicles, of which 75% are two-wheelers, will be due for scrapping by next year, it said.

The main purpose of the policy is to combat air pollution caused by old vehicles, a point that is missing in the public discourse, a second government official said.