In a move that could improve air quality on Indian roads, the government is considering a proposal to offer financial incentives of up to R1.5 lakh for disposing vehicles that are over 10-years old. Small cars could get owners in the region of R30,000. For big vehicles, after tax exemptions, this could be around R1.5 lakh. The customer will get a certificate that enables him to get a discount while buying a new car. The idea is to replace old cars with new ones that meet emission standards. That apart, it will lead to increased demand for the automobile industry. The eligibles’ number is huge. In Delhi alone, it is estimated that a third of the 8.5 million vehicles plying are over 15 years. Apart from better air quality, the move should create more space on the roads. The ‘scrapping with financial incentives’ model has been executed quite successfully in the past in the US, the UK, China and Indonesia.
Letting go of the old cars will not only boost the auto industry, at a later stage, it should also provide jobs to thousands of people as vehicle scrapyards are set up. There is also a proposal to allow import of cars that need to be scrapped.