NEW DELHI: Finance Minister Arun Jaitley and Transport Minister Nitin Gadkari will Wednesday discuss the policy to take off roads nearly 28 million over 11-year-old polluting vehicles.
The proposed ‘Voluntary Vehicle Fleet Modernisation Plan (V-VMP)’ provides incentives worth 8-12 percent of the cost of a new vehicle in lieu of surrendering the old ones. The policy will be applicable to the vehicles bought on or before 31 March 2005.
According to the transport ministry, the policy is good for the environment as 2.5 percent of old vehicles contribute 60 percent of the vehicular pollution.
“There were certain issues flagged by Finance ministry and the meeting will discuss all the finer aspects,” said a senior ministry official.
Under the scheme, people surrendering their old vehicles and buying new one are likely to receive incentives amounting to 8-12 percent of total cost of the new vehicle, the ministry has said.
To ensure that the resultant impact is beneficial to the environment, the replacement vehicle needs to be BS-IV compliant, which is going to be rolled out nation-wide by April 2017.
The draft policy said that it is expected to boost sales of automobile manufacturers leading to higher production capacity utilisation and the automobile manufacturers would support the government in this initiative financially by giving special discounts to customers buying vehicles under this scheme.
Subject to approval from the ministry of finance, it has been proposed that vehicles bought under this scheme may get up to 50 percent excise duty relief based on old vehicle and replacement vehicle category.
In addition, SRTU (state road transport undertaking) buses may be given complete excise exemption to ensure higher participation and modernize State’s bus fleet.