SIAM seeks sops for scrapping old gas-guzzlers

29 Aug 2009

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Scrapping one's old, polluting car and buying a new one may soon become an affordable option, if the Society of Indian Car Manufacturers has its way. It has asked the government for a 50-per cent rebate on excise duty and sales tax on new cars purchased to replace those that are 15 years old or more, in line with similar benefits extended in Europe and the US.

''A fleet renewal programme will help in creating demand for new fuel-efficient vehicles and cut down pollution and consumption of fuel,'' the SIAM recommendation said. ''The programme should encompass all vehicles, both private and public. While a cut-off point of 10-year vintage could be considered for commercial vehicles, it may be extended to 15 years for private vehicles.''

Taking over as SIAM's new president at its annual convention in New Delhi on Friday, Pawan Goenka, who is also president of Mahindra & Mahindra's automotive sector, had said that pollution control, fuel efficiency, and road safety were among his top priorities. (See: Pollution control a priority for new SIAM chief).

Many countries like Germany, France, Spain, Italy and Austria have given incentives in the form of cash to customers of up to 5,000 euros to replace their old gas-guzzlers with smaller fuel-efficient cars, leading to a surge demand for new cars in these markets. In India, however, the trend is to keep using old vehicles as long as they are serviceable.

SIAM also said that those who still hang on to their old vehicles should be penalised. "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,'' recommendation said.

Meanwhile, SIAM has reiterated its demand for a uniform 8 per cent excise duty on all vehicles, with a provision for further "incentivisation" for small cars and multi-utility vehicles. However, the body itself clearly realises that the government is unlikely to heed this plea in the foreseeable future.

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