Govt. could earn upto Rs.14k Cr. from proposed old vehicles scrapage scheme.

The National Green Tribunal (NGT) recently directed the Ministry of Heavy Industries to expeditiously frame a policy with regard to scrapping of vehicles and publicise benefits associated with it for persons who opt for it.

The Tribunal on July 20, 2016, asked the Ministry to take a view with regard to scrapping of vehicles and publicise benefits associated with it which would be provided to persons who opt for such a policy, while barring entry of 15- to 10-year-old diesel vehicles with national permits in Delhi NCR.

With even the Supreme Court coming down hard on air pollution with diesel vehicles and banning of diesel vehicles, almost every state agreed that the biggest polluters are old vehicles that do not observe the strict vehicle emission norms.

Normally passenger vehicles have useful life around 10-12 years but Indian car owners ride their vehicles around 15-19 years in the absence of any policy over age of vehicles. Huge scraping of vehicles will start due to ageing and specifically in Delhi & NCR after NGT order of banning diesel vehicles of 15 years and above.

Tata 1210

Tata 1210

Union Minister Mr. Gadkari has said “the central government will benefit by Rs 4,000 crore and state governments will benefit by Rs 10,000 crore.”

Currently, there are no regulations to deal with the disposal of automobiles, but there’s an emphasis to make scrapping of vehicles safer and environment-friendly. It is gaining pace after National Green Tribunal (NGT) ordered a ban on 10-year old diesel and 15-year old petrol cars in Delhi and surrounding areas.

With the scrapping of 10-year-old vehicles, the Government of India plans to generate steel scrap worth Rs. 11,500 crore annually. This will help to reduce burden of imports. The government will offer an incentive of 8 to 12 % of the cost of the new vehicle to those surrendering old vehicles. The government plans to get views from stakeholders as well as general public. The proposed policy is to allow for stricter emission norms for vehicles from April 2020.

Tata 1210

Tata 1210

When implemented on trucks and buses, the reduction in CO2 emission would be almost 17%, and HC+NOx reduction will be 18%, and 24% reduction can be seen in PM emission. Vehicle owners who surrender their old vehicle will stand to benefit around 8 to 12 % of the cost of the new vehicle. This, in turn, will help production and manufacturing of vehicles.

The policy will help the industry with a turnover of Rs. 20 lakh crore within the next five years. This will increase steel demand in the country Once the policy is approved and implemented, it is estimated to result in domestic steel scrap generation worth Rs 5,500 crore to substitute imported scrap and that it would create huge employment.

Ashok Leyland Comet

Ashok Leyland Comet

Ashok Leyland Hippo Tractor

It can be recalled that the government had told the Supreme Court in July 2016 that a new policy to combat pollution including the scrapping of old diesel vehicles and a scheme to replace about 28 million automobiles registered before March 31, 2005, by BS IV-compliant ones by April 2017, is underway and will be implemented soon.

But contrary to this, the government told the Supreme Court that a voluntary vehicle scrapping policy was being planned to beat vehicular pollution instead of mandatory scrapping policy. It is understood that the scrappage policy can be implemented only after setting up an eco-system wherein polluting and old vehicles can be duly collected and transferred to authorised dismantling facilities.

These facilities would then safely dispose of the old scrap, recovering the reusable metals and materials that can go back into the production-cycle, thereby relieving India of unnecessary imports.

Ashok Leyland Hippo Tractor

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