Common man eagerly waiting for ‘Vehicle Scrappage Policy’ that may form part of 2021-22 Union Budget


Daya Sagar

Suggestions were invited by Union Finance Ministry in reference to preparation of Budget Proposals for 2021-22 for that last date had been kept as December 7, 2020. I was expected that by that time Government of India / “Ministry of Road Transport and Highways (MoRTH) would have made public the final Vehicle Scrappage Policy for ‘end of fixed life vehicles’ but that had not been . On January 12, 2021 it has reported in media much-awaited “vehicle scrappage policy” could find mention in the Union Budget 2021-22. So, suggestions as regards the financial implications that the “Vehicle Scrappage Policy” may contain for the Finance Ministry of Government of India/ MoRTH could not be made by December 7, 2020. No doubt references have been made in public / through media, at occasions, for considerations of the Ministry of Road Transport and Highways Government of India but since no policy has been finally drawn officially how far the government has considered the suggestions is not known. Hence suggestions that would need the consideration of the Union Finance Minister Nirmala Sitharaman have been sent now ,although the deadline of December 7, 2020 is over, after learning through media reports that Union Finance Ministry may make a “Vehicle Scrappage Policy” or something like that a part of the Union Budget 2021-22 going to presented on February 1, 2021.
Since any “Forced Vehicle Scrappage Policy of the Government for ‘end of fixed life vehicles’ as has been so far talked about if goes at is it shall be surely damaging for in fair wisdom for vehicles otherwise tested fit for use even after 15 or 20 years of registration. But in case the reports that have been appearing in media from 2016-2020 surely some good for the owners of the vehicles could be expected in the policy under discussion. But reports of January 4, 2021 quoting Nitin Gadkari Union Minister for Road Transport and Highways as having said in an interview to an English daily “We are already in the process of making (vehicle) scrapping policy. With the scrapping policy, I am confident that in the next five years India will be the number one manufacturing hub in the world”.
No doubt last September 21, 2020 also it was reported referring to some government sources that the upcoming government scrappage policy for ‘end of life vehicles’ will offer no tax exemptions to owners, and “incentives, if any, will have to offered by OEMs (original equipment manufacturers) has surely disturbed many keeping in view that So far the scrappage policy being talked about has been seen by some more as part of the stimulus package requested by OEMs for the auto sector’s revival . Is it to benefit only the businessman, Manufacturer?
Scrapping vehicles simply on basis of “Age” may not be Socio-Economically that fair in India.”Vehicle Scrappage Policy” without subsidy/ tax reduction for New purchase will be more Unfair.
It has been learnt that Union Finance Ministry may make a “Vehicle Scrappage Policy” or something like that a part of the Union Budget 2021-22 going to presented on 01-02-2021.So may the Union Finance Minister make some incentives as part of the “Forced Vehicle Scrappage Policy of the Government for ‘end of fixed life vehicles’ in fair wisdom for vehicles otherwise tested fit for use like : (i) 50% reduction in the excise duty on new vehicle purchase (ii) Atleast 30% reduction in the GST on new vehicle (iii) 50 % reduction in the registration and fixed road tax at the time of registration of new vehicle (iv) 25% reduction in the basic insurance premium for first 3 years (v) 1% unit reduction/ subsidy in interest rate percentage unit for the bank loan raised for purchase of new vehicle .
Ministry of Road Transport & Highways and Ministry of Finance should also take cognizance of some facts that go against any proposals that may be suggesting blanket ban on use of a vehicle based on it’s “age” only from professional considerations like (i)a vehicle does not comprise only of an engine, an engine can be overhauled / rebuild worth giving performance near to a new engine at much lower a cost which is very very important for a commercial vehicle,(iii)for a vehicle the chassis / body to form the part of assembly that is important for / safety/service /physical stability / compactness of the structure of vehicle no less than engine ; no doubt annual inspection by RTOs/ MVD is carried in India only for commercial vehicles ( and that to in general only for elements other than engine performance ) where as there is nothing wrong in case that is extended to all vehicles as is done in some other countries but there too even in many advanced countries there is no blanket age bar on the vehicles (iv )there are many vehicle owners in India who may not be using their private car/ vehicle even for the 1st overhaul life averaged by the manufacturers or who have so nicely maintained their vehicles where as the junk value of the vehicle on age basis could unduly burden a private car owner by atleast 4 to 5 lakhs where as one could manage the feel like a new car by spending not even 15 to 20 % of that (iv) there could be good number of such cases in the commercial sector also where the individual truck or bus owner would have well maintained the vehicles and just spending 15 to 20 % of the cost of a new truck / bus ( may be atleast 30 Lakh) would make the vehicle worth meeting general physical / environmental safety needs ; imagine the financial burden the ‘poor’ owner would otherwise be bearing(v) no doubt the replacement of vehicles will give business to the vehicle manufacturers but that cannot be seen as growth at the cost of common man / scrapping the leftover human resource and energy still worth making safe use in left over usable ‘life’ (vi) imagine how much coal/electric energy / oil /human resource ( man hours )/ steel/ go into manufacturing a new car/ truck chassis and in case we discard a usable vehicle we shall be indirectly putting to waste millions of energy units / manhours, so in case government wants to take advantage of discarding 15yrs aged vehicles simply on age basis to indirectly more to help the automobile manufacturer , better provide export incentives to the industry for production support and also earn foreign exchange(vii) India has MVDs/ RTOs in every state, every vehicle could be subjected to engine performance test also in addition to structural inspection for phasing out the older and polluting vehicles after failing prescribed number of tests ( say maximum 3 times) (viii) every new manufactured vehicle will also need energy consumption ( oil/coal etc) and hence adding some pollution to environment. ix. engines are not used only on automobiles. A substantial number of engines is used on agricultural machines / pumps, industrial machines, power generating sets etc where too similar type checks need be exercised.
(Daya Sagar : Senior Journalist, Social Activist, Analyst J&K Affairs can be reached at [email protected])


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