Looking to push nearly 28 million over 11-year-old polluting vehicles off-roads, the government has proposed incentives worth 8-12 per cent of the cost of a new vehicle for surrendering the old ones.
The benefits under the proposed voluntary vehicle modernisation policy will come in three forms — scrap value from the old vehicle, a special discount by the automobile manufacturer and a partial excise duty exemption.
Inviting comments within a fortnight from general public and all stakeholders on the draft policy, the Ministry of Road Transport and Highways said the ‘Voluntary Vehicle Fleet Modernization Plan (V-VMP)’ will be applicable to the vehicles bought on or before March 31, 2005.
“The total potential vehicles to be replaced with this definition are nearly 28 million,” it said.
Under the scheme, people surrendering their old vehicles and buying new one are likely to receive three benefits amounting to 8-12 per cent of total cost of the new vehicle, the Ministry said.
“To ensure that the resultant impact is beneficial to the environment, the replacement vehicle needs to be BS-IV compliant, which is going to be rolled out nation-wide by April 2017.
The draft policy said that it is expected to boost sales of automobile manufacturers leading to higher production capacity utilization and the automobile manufacturers would support the government in this initiative “financially by giving special discounts to customers buying vehicles under this scheme”.
According to Road Transport and Highways Minister Nitin Gadkari, the policy will boost automobile industry turnover over four-times to Rs 20 lakh crore in the next five years.
Subject to approval from Ministry of Finance, it has been proposed that vehicles bought under this scheme may get up to 50 per cent excise duty relief based on old vehicle and replacement vehicle category.
In addition, SRTU (state road transport undertaking) buses may be given complete excise exemption to ensure higher participation and modernize State’s bus fleet.
“The vehicle owners shredding their old vehicle will get monetary incentives to buy a new vehicle in three forms to aid adoption of this program — scrap value from old vehicle, automobile manufacturers’ special discount and partial excise duty exemption,” the Ministry said in its draft policy.
It said the customers would realise scrap value of old vehicle based on vehicle weight and other characteristics. This would be driven by market forces, with clear transparent pricing mechanism to be decided by recycling and shredding centers (RSCs).
The proposed policy further said it is expected to “not only reduce environmental pollution of SRTU’s buses, but will also promote usage of public bus transport, which will aid road decongestion, lower energy consumption & pollution compared to other means of transport, and safer travel.”
For surrendering the old vehicles, owners would be required to deposit copies of registration certificate (RC), insurance of the old vehicle and proof of identity either electronically or through a physical visit to the collection center which would be extension of recycling and shredding centre.
The collection centre in turn will use VAHAN database to validate owner’s name, registration number, engine number and chassis number of the old vehicle, the government said adding that after document validation, the customer will be informed to deposit his old vehicle and collect the V-VMP certificate.
The owner will be informed of the scrap value for his old vehicle as per the market forces, with a “clear transparent mechanism to be decided by recycling centres and if agreed the scrap value would be handed over to him”.
Gadkari recently said the government will set up industrial clusters near ports that will manufacture automobile parts at half the market rate.
“The labour cost in India is less. Car parts like copper, steel, plastic and aluminium would be available in plenty from old vehicles, which would be recycled at these clusters,” he had told PTI in an interview.
The government is planning 29 port-based coastal industrial centres under coastal economic zones which will boost exports by USD 110 billion besides creating one crore new jobs.
The clusters are planned in the vicinity of India’s top 12 major ports.
India also plans to leapfrog to stricter emission standards of Bharat Stage-VI fuel specifications, skipping BS-V norms altogether, from April 1, 2020.