NEW DELHI: The Cabinet at its next meeting later this week is likely to take up a vehicle scrappage policy, which will make it costly to keep an old car and even costlier to keep an older commercial vehicle. There will also be tax discounts if a vehicle owner agrees to scrap his vehicle after 15 years.
Sources said the Cabinet note cleared by Road Minister Nitin Gadkari had raised the fees for keeping old cars, to encourage people to swap them for new ones.
For private four-wheeler cars, the re-registration fees may be hiked 25 times to Rs 15,000 from Rs 600. Re-registration fees for commercial four-wheelers could be raised to Rs 20,000 from the current Rs 1,000, said officials.
Similarly, medium commercial four-wheeler vehicles could see their registration renewal fee raised to Rs 40,000, from Rs 1,500 at present. Vehicle owners who agree to scrap their old vehicles would get a scrappage certificate which could be used to get tax discounts on the purchase of new vehicles and this could be made transferable.
Officials said the scrappage policy will dovetail into the stimulus package for the automobile industry and was suggested by car-makers in a bid to create demand for new vehicles, especially trucks and buses. Commercial vehicle sales plunged 38.71% in August this year.
The amendments first drafted in July this year, which initially called for compulsory scrappage, have gone through several modifications and were cleared by Gadkari a fortnight ago. Since then, they have gone through a round of pre-Cabinet vetting by Secretary-level officers at various ministries.
Old car out, new car in
The proposed scrappage policy offers hope for the distressed automobile sector as people will now be forced to change their old vehicles for new ones