Government seeks views from stakeholders on scrapping old vehicles

The Ministry of Road Transport’s initiative to scrap vehicles manufactured before March 31, 2005 would yield in close to Rs 11,500 crore of scrap steel being generated annually.

This would reduce the country’s dependence on imports and would also boost the foreign exchange reserves. Ministry sources say that the government has invited comments and views from stakeholders before going ahead with its proposed scheme to scrap old vehicles, dubbed as Voluntary Vehicle fleet Modernisation Programme (V-VMP).

The government is in the process of setting up automotive shredding plants to salvage materials from old cars.

In order to encourage the owners to give up their old vehicles to be scrapped, the government has proposed a three-pronged incentive plan – Value from the scrap, special discounts from automakers on new vehicles and partial excise duty exemption. The sum of all these three benefits is estimated to be worth 8-12% of the new vehicle’s price.

About 50% of the scrap is expected to be generated from buses and trucks. Analysis of segment and age of vehicles causing air pollution has shown that M&HCVs (Medium & Heavy Commercial Vehicles) constitute just 2.5 per cent of the total fleet but contribute to 60 per cent of pollution.

Decade-old vehicles constitute 15 per cent of the total fleet but pollute 10-12 times more than a new vehicle because of drastic change in pollution norms, the government has said.

V-VMP for buses and trucks would result in 17% reduction in CO emissions, 18% reduction in HC+NOx emissions and 24% reduction in particular matter emissions.