Need strict fitness checks to reduce pollution, says RC Bhargava

Updated : January 27, 2021 09:49 AM IST

Bhargava said a foolproof system was needed for regular fitness certification.

He also added that fitness certificates should be prominently displayed on the windshield of the car.

Industry veteran RC Bhargava, Chairman of Maruti Suzuki, has welcomed the transport ministry’s proposed green tax policy but said that a foolproof system was needed for regular fitness certification.

“The proposed policy for green tax and scrapping of government vehicles has the right intention and object. I hope the government goes further and effectively implements regular fitness certification for cars and commercial vehicles," said Bhargava in an exclusive interview with CNBC-TV18.

He also added that fitness certificates should be prominently displayed on the windshield of the car.

The Ministry of Road Transport on Monday approved a proposal to impose a green tax on older polluting vehicles. Owners would have to pay the proposed tax at the time of renewal of the fitness certificate. The green tax would be imposed on the road tax payable as per state norms. Vehicles in the highest polluting cities could be taxed at a 50 percent rate.

The government is proposing a green tax in the range of 10-25 percent on transport vehicles older than 8 years. Personal vehicles older than 15 years will also attract a green tax. Revenue collected through green tax would be used by the centre and states to check pollution and for setting up of emission monitoring centers.

Union Minister Nitin Gadkari has also proposed a scrapping policy for government vehicles older than 15 years. If notified, this scheme would come into effect from 1st April, 2022.

Government sources told CNBC-TV18 that the proposed green tax is a precursor to a comprehensive vehicle scrapping policy for all segments of automobiles. An inter-ministerial group is exploring two models for India’s scrapping law, one which provides incentives to the customer for scrapping in the form of a GST, road tax and registration cost rebate on the purchase of a new vehicle and second, a scrapping policy driven by disincentives, which raise the cost for renewing the fitness certificate of a polluting vehicle. This has been a longstanding demand of India’s auto sector and industry experts believe that an incentive-based scrapping policy would drive demand for new vehicles.

However, Bhargava believes that incentives for scrapping will not create long-term sustained demand. “An incentive-based policy is always for a short period. India is not short of demand right now. The bigger worry is that the auto sector growth has been steadily declining and has come down to 1.5 percent and therefore we need long-term sustained demand. An incentive-based scrapping policy would not create long-term sustained demand that is needed," he said.

The PMO recently chaired a high-level meeting to review the status of the proposed scrapping policy. The policy has been repeatedly delayed due to differences between key ministries and departments on the contours of the policy and whether a customer should be rewarded with incentives for scrapping an old polluting vehicle. There are now indications that the policy could be announced with the budget this year.

Published : January 27, 2021 09:49 AM IST

Need strict fitness checks to reduce pollution, says RC Bhargava

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