Plan to scrap 28 million pre-2005 vehicles takes a hit

NEW DELHI: The road transport ministry's proposal to retire nearly 28 million vehicles purchased before 2005 has hit a wall.

In its concept note `Voluntary Vehicle Fleet Modernisation', the ministry had proposed cut in excise up to 50% while buying a new vehicle after surrendering old one, offering fair value for the scrap material and discounts by auto manufacturers. It estimated the incentives would cut the cost of a new vehicle by 812%. The government had on Monday told the Supreme Court it was bringing a voluntary vehicle scrapping policy to beat vehicular pollution.

Sources said the finance ministry has indicated that instead of excise tax rebate, the option to give upfront cash incentive to people offering to scrap their old vehicles may be explored. In recent months, Niti Aayog has taken special interest in the voluntary vehicle scrapping policy.

"In cash incentive option, there'll be a cap on the amount. The excise cut could benefit bigger vehicles more than smaller ones," said a government source.

While the road transport ministry had claimed that the policy would reduce emission by 25-30% and oil consumption by 3.2 billion litres annually, transport experts have termed it an exercise to push vehicle sales.

"Certain quarters in the government are keen to push the plan in the name of reducing pollution even as they claim that vehicular emission is a minor contributor to air pollution," said S P Singh of IFTRT, a think tank.