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Buy A New Car!
The government has a couple of plans to discourage the use of old cars in India. And they’re planning to use the methods they know best – tax increases and tax incentives.
To discourage older cars, the gov will require users to re-register vehicles once they are 15 years old.
And the re-registration fee will be quite hefty.
On the other end, to promote new cars which are more environment-friendly, a road tax rebate for both personal and commercial vehicles is being worked out.
The Situation
Apparently, there are 51 lakh light motor vehicles that are older than 20 years, and 34 lakh vehicles older than 15 years.
Around 17 lakh medium and heavy commercial vehicles are older than 15 years and don’t have a valid fitness certificate.
The Plan
The government plans to lead by example here.
The scrapping will be kickstarted with government vehicles first – all older than 15 years will be scrapped once the policy comes into effect on October 1st.
Also, for those who don’t want to scrap their vehicles, the re-registration fee they’ll have to pay has been hiked to 8x of what it used to be. (For personal cars it will be Rs 4,000 vs Rs 500 earlier.)
The Impact
Apart from reducing air pollution, this new policy is likely to require Rs 10,000 crores of investments and will create 35,000 jobs too.
The expected increase in the sale of new vehicles should boost gov GST collections by Rs 30-40k crores.
It sure sounds like a win-win. But we’ll have to wait and see how people react once its implemented.
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