NEW
DELHI: As part of a plan to phase out vehicles which are over 10 years
old, the road transport ministry is looking to provide incentives of up
to Rs 1.50 lakh to those who surrender their old vehicles - a long
standing demand of the auto industry.
While transport minister
Nitin Gadkari confined himself to offering excise duty waiver, a
proposal that he plans to take up with the finance ministry soon, other
sops could include lower interest rate on auto loans, discount from
manufacturers as well as the scrap value of the old vehicle.
The move will come as a huge bonanza for the auto industry, which is showing signs of revival. While the auto lobby had made similar demands in the past, essentially to push up sales, the proposal seems to have found the minister's support in the wake of the National Green Tribunal's order banning diesel vehicles over 10 years old in the National Capital Region.
In 2013, Anand Sharma, the then commerce and industry minister, had pitched for sops of up to Rs 1 lakh for phasing out over 15-year-old commercial vehicles, a proposal that was rejected by the finance ministry.
On Thursday, addressing a conference of Association of State Road Transport Undertakings, Gadkari said if the proposal gets okayed, an owner of an old car would get incentive of up to Rs 30,000, which could go up to Rs 60,000 for heavy commercial vehicles such as trucks. The minister added that there would be other benefits of up to Rs 1.50 lakh but did not elaborate. While firm estimates are not available as the details are yet to be worked out, auto industry sources said a nationwide scheme would cost at least Rs 5,000 crore.
Describing it as a win-win solution, an official said, "Since sales will increase, waiver of a portion of the excise duty won't hurt the government. Similarly, auto shredding plants recycling the metal will get more work and can offer better prices. Banks will also benefit as they will get more customers at a time when loan demand is weak."
Gadkari said the comprehensive scheme would include provisions of setting up of 8-10 auto shredding plants near ports such as Kandla, which would issue certificates for accepting old vehicles and would recycle vehicles from India and abroad. "It will create huge employment as well," Gadkari said.
The move will come as a huge bonanza for the auto industry, which is showing signs of revival. While the auto lobby had made similar demands in the past, essentially to push up sales, the proposal seems to have found the minister's support in the wake of the National Green Tribunal's order banning diesel vehicles over 10 years old in the National Capital Region.
In 2013, Anand Sharma, the then commerce and industry minister, had pitched for sops of up to Rs 1 lakh for phasing out over 15-year-old commercial vehicles, a proposal that was rejected by the finance ministry.
On Thursday, addressing a conference of Association of State Road Transport Undertakings, Gadkari said if the proposal gets okayed, an owner of an old car would get incentive of up to Rs 30,000, which could go up to Rs 60,000 for heavy commercial vehicles such as trucks. The minister added that there would be other benefits of up to Rs 1.50 lakh but did not elaborate. While firm estimates are not available as the details are yet to be worked out, auto industry sources said a nationwide scheme would cost at least Rs 5,000 crore.
Describing it as a win-win solution, an official said, "Since sales will increase, waiver of a portion of the excise duty won't hurt the government. Similarly, auto shredding plants recycling the metal will get more work and can offer better prices. Banks will also benefit as they will get more customers at a time when loan demand is weak."
Gadkari said the comprehensive scheme would include provisions of setting up of 8-10 auto shredding plants near ports such as Kandla, which would issue certificates for accepting old vehicles and would recycle vehicles from India and abroad. "It will create huge employment as well," Gadkari said.
