Draft scrappage policy a combination of incentives and disincentives

The ministry of road transport and highways (MoRTH) in its long-pending draft vehicle scrappage policy has proposed some incentives. According to proposal motorists and freight operators who purchase new vehicles after scrapping their old ones may be entitled to a waiver of the registration fee and a discount on the road tax. The policy is aimed at taking off the roads old, fuel-guzzling vehicles whose roadworthiness may be in doubt and replacing them with new ones in a potential boost to automobile sales and their manufacturers. Gadkari said last year that it would also help recycle key raw material made available by scrapping vehicles, such as steel, aluminium and plastic, thereby lowering automobile prices.

The objective behind the scrapping policy is to phase out older, unfit vehicles and replace them with safe, fuel efficient, environment- friendly, new- generation vehicles. Commercial vehicles cause higher levels of pollution due to higher mileage covered by them. Therefore, efforts are focused more on these vehicles. The draft was discussed at the 40th meeting of the transport development council chaired by Union transport minister Nitin Gadkari. It has some disincentives also. Proposed disincentives include raising the registration fee for renewal after a vehicle completes 15 years, a higher fee for fitness certificates and fitness testing of vehicle aged above 15 years and restrictions by states on the entry of such vehicles into city limits. A higher road tax is proposed for vehicles older than 15 years.