Old cars should be scrapped: SIAM

Indian automobile sector is facing crippled growth and the overall car sales in India has slowed after recent rise in fuel prices and a hike in loan rates by the RBI. Seeing all these problems and rising menace of environment pollution by vehicles has triggered Society of Indian Automobile Manufacturers (Siam). SIAM has suggested government that all private cars made before 1996 should be scrapped so that the demand for new vehicles is encouraged that are more environment conscious.

SIAM has urged to the government for a regular scraping policy for private and commercial vehicles as well as two-wheelers to make sure that there is a regular churn and burn-out of old vehicles. According to SIAM’s policy the customers will also get incentives on the new cars in the form of lower excise, discount on sales tax and other direct cash benefits. The scrappage, however, is likely to be a non-starter considering that no scrappage policy is extant in India that describes how the scrap has to be disposed off and handled.

SIAM President S Sandilya said that they want the government to come out with a one time concrete policy for scrappage of old vehicles. This would not only help in generating demand for new vehicles which are efficient and safe but go a long way in controlling old and polluting vehicles and resultant emissions. For a successful implementation of such a scheme, the government of India will need to chalk out a detailed plan. However he opined that the average age of many vehicles on the road is very high and any forceful junking will surely lead to widespread dissents.

Similar scrappage schemes have been implemented in western countries like the “Cash for Clunkers” scheme. The scrappage of vehicles will help in 'greening' the country as India graduates to stricter, and more cleaner, vehicle emission norms. SIAM suggested that a cut-off point of 10-year vintage could be considered for commercial vehicles. But since, maintenance of private vehicles are likely to be better and their usage is comparatively lower, it may be appropriate to fix the cut-off point of private vehicles at 15 years or above. In order to discourage people from running old polluting vehicles, the rate of road tax and rate of premium on motor vehicle insurance could be increased progressively with the age of the vehicle

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