Homebusiness News

    Scrappage policy to raise sales: Road Transport Secy

    business | IST

    Scrappage policy to raise sales: Road Transport Secy

    Mini

    The government rolled out the voluntary scrapping policy on Thursday saying there are 85 lakh light motor vehicles and 17 lakh medium and heavy commercial vehicles (M&HCV) older than 15 years that can be scrapped. Giridhar Aramane, Secretary, Ministry of Road Transport and Highways girishared his views.

    The government rolled out the voluntary scrapping policy on Thursday saying there are 85 lakh light motor vehicles and 17 lakh medium and heavy commercial vehicles (M&HCV) older than 15 years that can be scrapped. Giridhar Aramane, Secretary, Ministry of Road Transport and Highways shared his views.
    “We have discussed with the Society of Indian Automobile Manufacturers (SIAM) and original equipment manufacturers (OEMs), they have already agreed to provide 1 percent discount formally. We are expecting that as the number of scrapped vehicles increase, there will be competition among the OEMs to grab as much market as possible because the increase in scrappage also means an increase in the sales,” he said.
    There are more than 80 lakh vehicles that are eligible for scrapping, he added.
    “Government is providing incentives in terms of the 25 percent reduction in the road tax for personal vehicles and 15 percent for the commercial vehicles (CV). We are also educating the public of the benefits, which they will achieve by modernizing the vehicles,” he stated.
    In terms of registration fees, he mentioned, “Registration fee waiver has already been decided. The partial waiver of the road tax also has been decided, the draft rules are out for public consultation. Once we receive the comments from the state governments as well as the public, we will finally notify them.”
    On old government vehicles eligible for scrappage, he said, “There are 22 lakh vehicles, the replacement cost is coming to around Rs 9,700 crore per anum if we sell them and lease out new vehicles.”
    “This is a voluntary scheme, people can start it right away. The benefits will be available from October this year. The government vehicle scrappage can start from next April, we have mandated it from April 1, 2022,” he pointed out.
    According to him, the automobile industry should consider the overall benefits and should develop the market for scrappage.
    “The fitness centres we are already setting up. we are setting up 26 fitness centres as a pilot scheme in all the states. These centers will start functioning in next six-eight months and we will keep on increasing the numbers. We are not waiting for anything or anybody to happen before establishing fitness testing centers,” he said.
    Regarding scrappage centers, two-three OEM run centers are already functional and the government is talking to other investors also to come in to the center and establish them.
    “we are in discussion with certain state governments to provide them incentives like land at a cheaper cost or plots in the industrial estates so that their initial capital cost will come down considerably,” he mentioned.
    When asked about the Remission of Duties and Taxes on Export Products (RoDTEP), he replied, “Discount has to depend upon the market for the new vehicles, the incremental increase in the vehicle sales not on what is already there. So my advice to the automobile industry is that they should be able to develop the potential for scrappage in the country by offering some incentive.”
    For full interview, watch the video
    Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
    next story

      Most Read

      Market Movers

      View All
      CompanyPriceChng%Chng