In her media address today, Union Finance Minister Nirmala Sitharaman clarified that vehicles compliant to BS IV emissions standards sold till March 2020 will be valid and will remain legally operational. She went on to speak about the proposed increase in one-time vehicle registration fee, saying that the proposal has been pushed back to June 2020. Furthermore, the ban on the purchase of new vehicles for government departments will be lifted, promoting the replacement of old government vehicles with new ones.
The FM has also clarified that both EVs and ICE vehicles will continue to be registered in future also.
Bringing the focus on depreciation value of vehicles and scrappage, Sitharaman said that depreciation will be increased to 30% for all vehicles and that the government will work on formulating a scrappage policy for old vehicles, adding that currently, India does not have the infrastructure for it.
In July 2019, the Ministry of Road Transport and Highways (MORTH) issued a draft notification proposing to increase the registration charges by RTOs for new internal combustion engine-powered cars from Rs 600 currently to Rs 5,000. The move was directed towards promoting electric vehicles in addition persuading owners to scrap older vehicles, in lieu of free registration of their new vehicle.
Before the finance minister's statement today, Minister of Road Transport and Highways Nitin Gadkari stated that the government does not have any plans to ban petrol or diesel vehicles. He said the government is promoting e-vehicles and people will slowly accept it. Gadkari’s statement came after the NITI Ayog had announced banning two-wheelers under 150cc by 2025 and three-wheelers vehicles by 2023.
Indian automobile industry body SIAM (Society of Indian Automobile Manufacturers) President Rajan Wadhera said that SIAM is thankful to the Finance Minister Nirmala Sitharaman, for addressing the difficulties of the automotive sector by announcing specific measures to boost demand. The industry highly appreciates that the FM has responded with a package of measures within 2 weeks of its consultation with the industry.
Reacting to the announcements made today, Venu Srinivasan, Chairman, TVS Motor Company, said: “These measures will provide the immediate relief that the industry was seeking. The promptness of this government’s response is reassuring for not just industry, but for the common man as well because it’s putting liquidity into the market and easing the squeeze on the small and medium sector. While there are indications of a global slowdown, this government has demonstrated its resolve to mitigate the impact of that in India through these measures. This is the stability and proactiveness that industry wants.”
Last month, the NGT has directed the government to formulate a standard operating procedure (SOP) for setting up authorised recycling centres to scrap them scientifically, keeping in view the increasing number of 'end of life' vehicles which will be over 21 million by 2025.
According to the NGT, about nine million vehicles of which 75 percent are two-wheelers will be due for scrapping by 2020. The number will inflate to over 21 million by the end of 2025.