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Govt may soon cap life of commercial vehicles at 20 years

Nitin Gadkari recently said the policy was needed to curb vehicular pollution.

india Updated: Mar 16, 2018 23:24 IST
Moushumi Das Gupta
Moushumi Das Gupta
New Delhi, Hindustan Times
Vehicle scrap policy,PMO Meet,commercial vehicles
The policy will be effective from April 1, 2020, and life of the commercial vehicle for scrapping has been fixed at 20 years, an official said.(HT File Photo)

The Centre’s ambitious vehicle-scrapping policy will become compulsory for all commercial vehicles from 2020 and their life will be capped at 20 years, a high-level meeting chaired by Nripendra Misra, principal secretary to Prime Minister Narendra Modi, decided on Friday, two senior government officials familiar with the development said.

The plan is to try to get the GST Council to consider a lower tax on new commercial vehicles bought against a scrapped one from the current rate of 28% to between 12% and 18%, one of the officials added on condition of anonymity. Vehicle manufacturers will also offer a discount on purchases against scrapped vehicles.

The road ministry has been directed to put up a proposal before the cabinet in three months, this person added.

Once the cabinet approves the scheme, and till the deadline of 2020 when it kicks in, owners of vehicles older than 20 years can voluntarily scrap their vehicles and receive a discount on the purchase of new ones, the first official said.

India has 700,000 trucks, buses and taxis manufactured before December 31, 2000 that contribute 15-20% of vehicular pollution, according to an analysis by AT Kearney based on data from Central Pollution Control Board and Union road ministry emission norms. The government expects 350,000 vehicles to be scrapped in the next two to three years.

Besides Misra, Friday’s meeting was attended by NITI Aayog CEO Amitabh Kant, and secretaries of the ministries of finance, steel, environment, highways and micro, small and medium enterprises, the Department of Heavy Enterprises and the Department of Industrial Policy and Promotion (DIPP)

.“The steel ministry along with Niti Aayog have been directed to draft a policy to promote establishment of recycling and shredding centres,” the first official said. Vishnu Mathur, director general of the Society of Indian Automobile Manufacturers, welcomed the plan. “We have been asking for it for a decade. It will not only help curb pollution but will improve safety on the roads. Besides, other benefits will also accrue from recycling of scrap,” he said.

Beijing, the Chinese capital, managed to remove 34 0,000 vehicles that were over 10 years old from its roads in 2016 by providing monetary incentives to owners to replace them with new ones.

First Published: Mar 16, 2018 23:16 IST