Government’s plan to scrap old, polluting vehicles runs into roadblock
The vehicle scrapping policy, which was aimed at reducing pollution, was welcomed by vehicle makers because it meant more sales for them.
The Union road transport and highways ministry’s ambitious vehicle scrapping policy, which proposed a mandatory cap of 20 years on the life of all commercial vehicles starting in 2020, has hit a roadblock. The Prime Minister’s Office (PMO) has directed the ministry to take a host of measures, including more active consultations with states, before implementing the policy, three officials familiar with the matter said.
The policy, which was aimed at reducing pollution, was welcomed by vehicle makers because it meant more sales for them.
The PMO on July 9 returned the cabinet note sent by the ministry with a slew of directions, one of the officials said on condition of anonymity. The ministry had sent the cabinet note to the PMO on June 11, the official said.
Besides asking the highways ministry to consult the states on the “framework” of the scheme, the PMO has directed that the scheme be made “voluntary” and “linked with incentives which should originate from manufacturers,” a second official said.
“The PMO has said that the expenditure details of the scheme should be firmed up on the basis of incentives,” the second official added.
The vehicle scrapping policy is partly aimed at reducing pollution. 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 the Central Pollution Control Board and Union road ministry emission norms. The ministry had expected 350,000 vehicles to be scrapped in the next two to three years if the scheme received the cabinet’s green signal.
On Monday, a report released by the Centre for Science and Environment (CSE), said that about 20 million vehicles had accumulated in India by 2015 that are obsolete and require scrapping. Anumita Roy Chowdury, executive director of CSE, said on Tuesday that it was important to get the policy framework right. “Because scrapping policy has to be combined with proper end-of-life regulation. First, you have to have the infrastructure for scrapping. Manufacturers also should be made responsible. They have to ensure that the metal and material they are using can be reused to the maximum. Also, they will also have to be made responsible for end of life disposal of vehicles.”
Since the scheme will require a huge network of automobile scrapping facilities the PMO also wants the ministry to start such facilities on a pilot basis for “gaining experience,” the second official added. The third official, who is from the road ministry and also did not want to be named, said the ministry is going through the directions given by the PMO.
The road ministry had proposed in its cabinet note that the scheme will be voluntary only till 2020, after which it will be compulsory for owners to scrap commercial vehicles older than 20 years. As per the proposal, until the 2020 deadline kicks, owners of such vehicles can voluntarily scrap their vehicles and receive a discount on the purchase of new ones, the second official added.
It was following a meeting at the PMO in March that the road ministry had been directed to put up a proposal before the cabinet in three months. In its communication, the PMO also asked the ministry also “explore” the establishment of scrapping facilities on the so-called “Swiss challenge mode,” given that such facilities would require vast tracts of land that may not be readily available in many states.
Under this method, the government would receive an unsolicited proposal from a person/ company that is put online. A second person can then submit a counter proposal; if the original proposer fails to match the terms of the counter-proposal, the project will be awarded to the latter. A senior official of Society of Indian Automobile Manufacturers said the policy needs to be fleshed out properly before it is enforced. “For instance, the industry has not taken a call on how much incentive they need to give... Many are running at a loss so incentives can’t be too high. Also where are the scrapping centres? Such centres have to be sure of the volume (they will handle) before they start.”