Govt may set eight-year life cap for CVs

Written by Timsy Jaipuria | New Delhi | Updated: Apr 14 2014, 09:13am hrs
In a move that could come as a setback for owners of commercial vehicles (CVs), but boost manufacturers prospects, the road ministry has started working on a proposal to phase out CVs after eight years. Currently, there's no such tenure by which a CV is phased out, but getting registrations becomes difficult after 14 years.

The proposals rationale is to enhance safety and curb pollution.

The department of heavy industry, a stakeholder in the matter, is yet to examine the proposal. However, since the definition of a mandatory end of life is to be spelled out soon under Automotive Mission Plan 2006-2016, the proposal is likely to kick off once the new government assumes office.

According to industry estimates, there are around 70 lakh CVs in India, including buses and trucks. "There are 60 lakh goods carriage vehicles and 10 lakh stage carriage vehicles (buses). 98% of goods carriage is over 8 years of age and 90% of stage carriage is over 8 years of age," said SP Singh, senior Fellow and coordinator, Indian Foundation of Transport Research and Training (IFTRT).

Late last year, the commerce ministry had also proposed a version of the US government's 'cash for clunkers' programme to help revive India's manufacturing replace your 15-year-old CV with a new one and the government will chip in with R1 lakh. The department of industrial policy & promotion has proposed a R1,000-crore scheme that could incentivise the purchase of 1 lakh new CVs. The idea was to revive manufacturing, especially the automobile sector, which boosts downstream activities.

Heavy industry officials said the proposal is still nascent and would take time to get finalised as it would require car crushers in each state.

"This has been a recurring demand of the Society of Indian Automobile Manufacturers. This would be an indirect way for automakers to get relief at a time when they are seeing declining sales since the last one year..." Singh said.

Supporting the proposal, Siam director general Vishnu Mathur told FE, "there is a need of freight modernisation in the country. Once inspection and maintenance centres are in place, the yearly test would show that the maximum number of CVs running are road-unworthy... There is a need to have an end of life policy in the country.