Vehicle Scrappage Policy: Proposed Incentives And Disincentives

As per the new vehicle scrappage policy, manufacturers can give up to 5 per cent discount for buying new vehicles. States can give up to 25 per cent rebate on road tax for personal vehicles, while up to 15 per cent rebate on road tax for commercial vehicles may be offered. Additional proposed benefits include zero new registration fee and scrap value equivalent of 4-6 per cent of ex-showroom price of new vehicles. At the same time, various disincentives for keeping old vehicles have been drafted, such as automatic deregistration of unfit vehicles, states can also levy an additional 'green tax'. The policy is expected to boost demand for new vehicles. We ask experts about the various provisions of the policy and how they take effect.